Keystone Government Loan Program

The Keystone Government Loan Program (K-Gov) provides first mortgage financing on loans insured by the Federal Housing Administration (FHA) or guaranteed by Rural Development (RD) or the Department of Veterans' Affairs (VA). Loans are underwritten using the guidelines of the respective federal agency providing the insurance/guaranty. PHFA does not impose any additional guidelines except as noted below.

How does K-Gov differ from the Keystone Home Loan Program?

• Your eligibility is determined by the PHFA participating lender using the guidelines of the respective federal agency (FHA, RD, or VA).
• There are no income or purchase price limits specific to PHFA; however, the FHA and VA maximum loan limits still apply, as do the RD income limits.
• You are not required to be a first-time homebuyer.
• You will have fewer forms to sign at or before closing.

If your middle or low credit score is below 660, you will need to complete a homebuyer education class prior to closing that is provided by one of PHFA's approved counseling agencies. Your property must also meet PHFA's property guidelines.

Borrowers meeting PHFA's income and purchase price limits may choose to apply for the Keystone Home Loan or Keystone Home Loan PLUS programs.

Keystone Government Assistance Loan

All K-Gov borrowers are eligible to apply for a zero-interest second loan, based on need, to be used to cover closing costs and the minimum downpayment requirement associated with their home purchase. First-time homebuyers (defined as households where no adult occupants have had an ownership interest in their principal residence during the previous three years) are eligible to receive up to $2,000 and non first-time buyers are eligible for up to $1,000.

Households receiving closing cost and downpayment assistance may not have liquid assets greater than $5,000 after deducting the funds needed to close on the loan. This includes cash and funds in checking and savings accounts, stocks, bonds, certificates of deposit, and similar liquid accounts. Funds from retirement accounts such as 401(k)s, IRAs, and pension funds will only be considered if they can be withdrawn without a penalty due to borrower meeting age requirement and/or being retired.

How do you apply for the Keystone Government Loan Program?

Simply call a PHFA participating lender to start your mortgage application. PHFA also offers homebuyers the opportunity to receive homebuyer counseling and education through one of its approved counseling agencies. We strongly encourage you to seek the assistance of a counselor before you sign a sales agreement, especially if you are a first-time homebuyer.

Borrowers should be aware that not all participating lenders offer FHA, RD, and/or VA loans. Also, those loan types may have additional eligibility requirements regarding the buyer and/or the property.