HOMEstead Down Payment Assistance Program | Pennsylvania Buyer Guide One of the biggest barriers to buying your first home is coming up with enough cash for a down payment and closing costs. In Pennsylvania, the HOMEstead Down Payment Assistance Program, offered through the Pennsylvania Housing Finance Agency (PHFA), helps first-time buyers bridge that gap by providing significant upfront assistance—money that can even be forgiven over time.
If you’re searching for HOMEstead Down Payment Assistance Program , this guide explains what it is, who qualifies, and why it’s one of the most valuable options for Pennsylvania homebuyers
What Is the HOMEstead Program? What Is the HOMEstead Program? The HOMEstead Down Payment and Closing Cost Assistance Program is a forgivable second mortgage loan designed to reduce the upfront costs of homeownership.
Amount Available: Up to $10,000 in assistance Forgiveness Schedule: Loan is forgiven at 20% per year over 5 years Interest Rate: 0% (no interest charged) Use: Funds can be applied toward both down payment and closing costs Availability: Only in certain counties and municipalities in Pennsylvania This means if you stay in your home for 5 years, the assistance becomes completely free.
Who Qualifies for the HOMEstead Program? Who Qualifies for the HOMEstead Program? To qualify, buyers must meet PHFA’s general requirements:
Be a first-time homebuyer, unless buying in a targeted area Qualify for a PHFA first mortgage (Keystone Home Loan , FHA , VA , USDA , or HFA Preferred™ ) Meet income and purchase price limits, which vary by county and household size Use the home as a primary residence Complete homebuyer education, if required Buy in a participating county/municipality, since HOMEstead is not statewide Because the program is location-based, availability depends on county funding.
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Benefits of the HOMEstead Program Benefits of the HOMEstead Program Up to $10,000 in forgivable assistance—higher than most other PHFA programs Forgivable in just 5 years (shorter than the 10 years required by K-FIT) No monthly payments—loan is forgiven automatically as long as you remain in the home Reduces upfront costs, making homeownership more accessible Example: How HOMEstead Works Home Price: $180,000
Standard FHA Down Payment (3.5%): $6,300 Estimated Closing Costs: $5,000 Total Upfront Cost: $11,300 With HOMEstead:
Receive $10,000 in assistance Pay only ~$1,300 out of pocket Stay in the home 5 years → $10,000 assistance is fully forgiven That’s the difference between waiting years to save and buying your home now.
Learn more in “Best First-Time Homebuyer Programs in Pennsylvania ”
HOMEstead vs. K-FIT vs. Keystone Advantage Feature
HOMEstead Assistance
K-FIT Forgivable Loan
Keystone Advantage Loan
Max Assistance
Up to $10,000
Up to 5% of purchase price
Up to $6,000 or 4%
Interest
0%
0%
0%
Repayment
Forgiven over 5 years
Forgiven over 10 years
Repaid over 10 years
Availability
Certain counties only
Statewide
Statewide
Best For
Buyers in eligible counties who want faster forgiveness
Buyers staying long-term statewide
Buyers who need repayment flexibility
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Why Choose Loan Factory for HOMEstead? Why Choose Loan Factory for HOMEstead? At Loan Factory, we help Pennsylvania buyers unlock every available program:
One application checks eligibility across all PHFA programs Compare 240+ lenders instantly to find the lowest rate AI-powered tools simplify the process Local advisors guide you through HOMEstead’s county-specific rules Zero junk fees—only transparent, required costs “We’ve helped thousands of Pennsylvania homebuyers cut upfront costs with programs like HOMEstead, making homeownership possible years sooner.” – Thuan Nguyen, CEO
If you want to see whether your county participates in the HOMEstead Down Payment Assistance Program, Loan Factory makes it easy.
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Check your eligibility today and find out if you qualify for up to $10,000 in forgivable assistance.
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This content is for informational purposes only and not a commitment to lend. Loan terms, rates, and approval depend on credit, underwriting, and investor guidelines.
FAQs – HOMEstead Program 
