The Pennsylvania down payment assistance programs can be very helpful to people buying a house for the first time. First time home buyers can get down payment assistance up to ten thousand dollars without having to pay interest or any fee on a monthly basis.
What’s the catch? For most of these programs there aren’t any, although you got to payback the whole amount if you are selling your house or moving out of your house within two to five years.
There are many agencies that offer down payment assistance programs that help people with a step by step process of buying a home or you can simply apply for these programs by yourself.
If Pennsylvania down payment assistance programs have a downside, it’s that they are granted on income basis. Although this varies, your income must fall within specific ranges. In other words if you’re income is above the average of the people in Pennsylvania, you may not qualify. Also, there are few more income rules which the buyer must comply in order to get these Pennsylvania down payment assistance programs.
Pennsylvania Down Payment Assistance Programs
Access Down payment and Closing Cost Assistance Program This Pennsylvania down payment program offers an interest free deferred payment second loan to people who have a permanent disability or live with a family member who has a permanent disability. To be eligible, you’ll have to be qualified for a first mortgage, meet household income limits, contribute 3 percent to 5 percent of your home’s purchase price from your own funds, and have liquid assets of no more than $5,000. The minimum loan amount is $1,000. The maximum is $15,000. This loan will become due and payable if you move out of your home or sell or transfer it to another owner.
Employer Assisted Housing (EAH) Initiative This Pennsylvania down payment program offers home buyers working for a Participating EAH Employer (there are 47) with a 30 year fixed rate loan and Pennsylvania down payment assistance. The Pennsylvania down payment assistance comes in the form of an interest free 10 year loan of up to $8,000. This Pennsylvania down payment program targets community employees, medical personnel, school employees, police and fire personnel, county workers, laborers, service industry staff, etc.
HFA Preferred (Lo MI) This Pennsylvania down payment program offers a conventional mortgage with a 30 year fixed rate term, but you will need to pay for mortgage insurance if your Pennsylvania down payment is less than 20 percent. To be eligible, Pennsylvania borrowers must meet the same requirements listed for the Preferred Risk Sharing Program.
HFA Preferred Risk Sharing (No MI) This Pennsylvania down payment program offers a conventional mortgage with a 30 year fixed rate term, structured so you won’t have to pay mortgage insurance (MI) even if your Pennsylvania down payment is less than 20 percent of your home’s purchase price. Instead, your loan might have a slightly higher interest rate. To be eligible, you must have an acceptable credit history and ability to make mortgage payments. You also must be in a low income household, based on where you live in the state and how many people live with you. You’ll have to pay an application fee and closing costs and contribute at least $1,000 of your own money toward your Pennsylvania down payment. The remaining funds can be a gift or from a Pennsylvania down payment assistance program.
HOMEstead Down payment and Closing Cost Assistance Loan Program This Pennsylvania down payment program offers an interest free second mortgage toward your Pennsylvania down payment and/or closing costs. The minimum loan amount is $1,000. The maximum is $10,000. This loan will be forgiven at a pace of 20 percent per year for five years. After that, the loan need not be repaid. A 1 percent fee that the program charges can be financed by the HOMEstead loan.
Keystone Home Loan Program This Pennsylvania down payment program is for first time home buyers, meaning you cannot have owned a home within the last three years. These requirements can be waived if you buy a home in a targeted area or you’re a discharged U.S. military veteran. Purchase price and income limits apply. You must have an acceptable credit history, ability to repay your loan and sufficient funds for an application fee, closing costs and Pennsylvania down payment based on the purchase price of your home. Whether you’ll have to pay mortgage insurance will depend on the type of loan you choose.
Regardless of which type of down payment program, you will first need a mortgage. Below are mortgages that require low or no down payments:
No Down Payment Mortgages – mortgages that require no down payment
USDA Rural Loan – the purpose of the Single Family Housing Direct Home Loan is to assist low- and very-low-income applicants obtain decent, safe and sanitary housing in eligible rural areas by providing payment assistance to increase an applicant’s repayment ability. There is no down payment. Payment assistance is a type of subsidy that reduces the mortgage payment for a short time. The amount of assistance is determined by the adjusted family income.
VA Home Loan – VA helps Service members, Veterans, and eligible surviving spouses become homeowners. As part of our mission to serve you, we provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy. There is no down payment as long as the sales price doesn’t exceed the appraised value.
Low Down Payment Mortgages – mortgages that require up to 3.5% down payment
FHA Mortgage Loan – the purpose of the FHA Home Mortgage Loan is to provide mortgage insurance for a person to purchase or refinance a principal residence. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, savings and loan association and the mortgage is insured by HUD. A down payment of just 3.5 percent is required and may consist entirely from “gift funds.” The credit score requirement is 580.
Home Possible® Advantage Mortgage – the purpose of the Home Possible® Advantage mortgage by Freddie Mac is to offer low down payments for low- to moderate-income homebuyers or buyers in high-cost or underserved communities. Down Payment can come from a variety of sources, including friends and family, employer-assistance programs and secondary financing.
The HomeReady™ Mortgage – the purpose of the HomeReady™ mortgage by Fannie Mae is to provide flexibility for applicants buy home with down payments as low as 3%, below market mortgage rates, co-borrower flexibility, additional income sources and reduced mortgage insurance costs.
More places to find assistance on down payment:
The US Department of Housing and Urban Development (HUD) offers the following programs:
The Good Neighbor Next Door Program was created by U.S. Department of Housing and Urban Development (HUD) to help law enforcement officers, pre-Kindergarten through 12th grade teachers, firefighters and emergency medical technicians buy homes. The biggest benefit of the Good Neighbor Next Door Program is the 50% discount of the home’s list price. The only catch is that the home owner must commit to live in the property for 36 months as their sole residence.
To learn more about the Good Neighbor Next Door Program, click here.
The Section 184 Indian Home Loan Guarantee Program is a mortgage for American Indian and Alaska Native families, Alaska villages, tribes, or tribally designated housing entities. In 1992 Congress created this program to help Native American Communities with homeownership.
Section 184 loans helps borrowers buy homes with a low down payment and flexible underwriting. Moreover, the loan does not need to be used only on properties on native lands. Purchase of an existing home for single-family residences. Also allowed are new construction, rehabilitation, and refinance.
To learn more about Section 184, click here.
Pennsylvania Housing Agencies
Pennsylvania housing agencies are your best resource for down payment assistance programs. Through funding from HUD, the purpose of these agencies is to ensure that affordable housing is available for everyone.
- Union County Housing Authority
- Washington County Housing Authority
- Allegheny County Housing Authority
- Bethlehem Housing Authority
- Housing Authority of Cumberland County
- Housing Authority of the City of Franklin
- Housing Authority of the County of Chester
- Housing Authority of the City of Erie
- Lackawanna County Housing Authority
- Housing Authority City of Pittsburgh
- Housing Authority of the County of Butler
- Lawrence County Housing Authority
- Lancaster City Housing Authority
- Lebanon County Housing Authority
- Mercer County Housing Authority
- Housing Authority of Northumberland County
- Pennsylvania Association of Housing and Redevelopment Agencies
- Philadelphia Housing Authority
- Pennsylvania Housing Authority
- Housing Authority of The City of Pottsville
- Pennsylvania Housing Finance Agency