HOMEstead Down Payment Assistance Program | Pennsylvania Buyer GuideOne 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.
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.
FAQs – HOMEstead Program
