The Pennsylvania Housing Finance agency offers two conventional loan products that are designed specifically for HFAs (Housing Finance Agencies). These products offer a fully amortized 30 year fixed rate term. PHFA offers these programs through a network of approved participating lenders, with PHFA as the servicer. In other words, you will work with a lender up through the loan closing, but will make your monthly payments to PHFA for the life of your loan.
The HFA Preferred Risk Sharing™(No MI) loan does not require mortgage insurance, which is insurance coverage that is commonly required by lenders when the borrower has a downpayment of less than 20 percent (20 %) of the purchase price. Typically there is a premium added to your monthly mortgage payment to cover the cost of this insurance. Since this additional payment is not required with HFA Preferred Risk Sharing™(No MI), the total monthly mortgage payment is typically lower than a loan with mortgage insurance included, even though the interest rate may be slightly higher.
With the HFA Preferred™(Lo MI) loan, mortgage insurance is provided by one of several private mortgage insurance companies when the borrower puts down less than 20 percent (20 %) towards the purchase of the home. Your lender will help you determine what the premium will cost for your specific situation.
These programs also provide a refinance option for homeowners seeking to lower their current monthly mortgage payment on their primary residence. Cash back is limited to $2,000 or two percent (2 %) of the balance of the new PHFA loan, whichever is less. Borrowers may be eligible for a PHFA Keystone Advantage Assistance Loan in conjunction with a refinance, only if they still need help with their closing costs after using any available "cash back" to cover those costs.
Downpayment and closing cost assistance loans are available with both HFA programs through the Keystone Advantage Assistance Loan program. PHFA's Access Home Modification program with or without the Access Downpayment and Closing Cost Assistance program is also available with both HFA loan products in the case where a borrower or family member is living with a permanent disability. In addition to the Agency's programs, borrowers may also utilize PHFA-approved local homebuyer assistance programs.
The following eligibility requirements are shared by both the HFA Preferred Risk Sharing™(No MI) and the HFA Preferred™(Lo MI) loan programs:
The program that is best for you will depend on your specific circumstances, such as your credit history and amount of cash savings, as well as your individual preferences. A PHFA approved homebuyer education provider or participating lender can help you decide.