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.
Homebuyers eligible for the HOMEstead program may qualify for up to $10,000 in downpayment and closing cost assistance in the form of a no-interest, second mortgage loan. HOMEstead funds are forgiven at 20 percent per year over five years for all loans closed on or after January 1, 2007. The minimum loan amount is $1,000. The first mortgage is provided by PHFA at the same rate as the Keystone Home Loan program. A fee of one percent is applicable, but may be financed by the HOMEstead loan.
HOMEstead borrowers must meet the minimum downpayment requirement based on whoever is insuring or guaranteeing the loan. HOMEstead funds may provide the remainder of the downpayment and the closing costs. In certain cases, based upon family need, the funds may provide additional down money to make the property affordable to the buyer.
Buyers participating in PHFA’s Keystone Home Loan Program are eligible to apply if they meet certain program income limits and home acquisition cost limits that vary by county. Most major cities and seven counties are wholly excluded from the program because they receive their own federal allocation. Eligible areas are noted on the limits above. The home must also meet other property guidelines specified by federal rules. Federal regulations for Lead-Based Paint Hazard Reduction (24 CFR Part 35) are applicable to HOMEstead Second Mortgage Program applicants. Therefore, most homes built prior to 1978 are not eligible for HOMEstead assistance.
As in all PHFA homeownership programs, loans are made by local lending institutions, not by the Agency itself. More than 70 lenders participate statewide.
Program requirements and funding availability are determined by the US Department of Housing and Urban Development as set forth in the HOME Investment Partnership Program and the American Dream Downpayment Initiative. PHFA HOMEstead funding is therefore allocated to eligible homebuyers on a first-come, first-served basis.