First-time buyer programs in Pennsylvania and Philadelphia

How PHFA’s programs fit together

PHFA is the state’s housing finance agency. Its help comes in two layers: a first mortgage (such as the Keystone Home Loan) and an optional second loan for the down payment and closing costs. Loans are made by participating lenders, not by PHFA directly. Terms below come from PHFA’s program pages; PHFA’s own site was reached through a web archive copy dated April to June 2026, so confirm the current terms with a PHFA lender.

Each assistance loan can only cover the minimum down payment and closing costs, and PHFA says Keystone Advantage and K-FIT cannot be combined with any other PHFA assistance program (the Access Modification loan is the exception).

The Keystone Home Loan

The Keystone Home Loan is PHFA’s main first mortgage. According to PHFA, you can qualify if:

• you and every adult who will live in the home are first-time buyers, meaning none of you has owned a principal residence in the previous three years; or you are not a first-time buyer but buy in a Targeted area, or are a discharged U.S. veteran;
• your household income and the purchase price stay under the limits PHFA publishes by county;
• you have acceptable credit and enough cash for the down payment and closing fees.

PHFA states minimum investments of 3% to 5% on conventional loans insured through the Pennsylvania Housing Insurance Fund (credit score of at least 660) and 3.5% on FHA loans. VA and RD loans require no down payment in most cases, and PHFA notes that RD loans are not available in Philadelphia County. PHFA updates its income and price limits by county; read the current table on PHFA’s Keystone Home Loan page rather than relying on any figure repeated elsewhere.

Is HOMEstead available in Philadelphia?

No. PHFA’s HOMEstead income-limit appendix lists Philadelphia as “Entire County: Ineligible,” and its page explains that most major cities are excluded because they receive their own federal allocation. Philadelphia buyers look instead to PHFA’s other assistance loans and to the city’s programs below.

Help from the City of Philadelphia

Philly First Home

The City’s page and the Philadelphia Housing Development Corporation (PHDC) describe a grant of up to $10,000 or 6% of the purchase price, whichever is less, for the down payment and closing costs. The main rules:

• You must be a first-time buyer, or not have owned a home in at least three years.
• The home must be a single-family house or a duplex in Philadelphia. Condominiums are not eligible.
• You must complete one-on-one counseling with a City-funded housing counseling agency before you sign the agreement of sale.
• Your household income must be under the limit. PHDC’s page lists gross annual limits from $85,900 (one person) to $98,200 (two people), $110,500 (three) and $122,700 (four).
• The grant must be repaid if you move or refinance before living in the home for 15 years.

The City says grants are provided “while funding is available.” Neither the City page nor the PHDC page states whether funds are available today, so call the Division of Housing and Community Development at (215) 686-9749 or a City-funded counseling agency before you plan around it.

Turn the Key

Turn the Key is a City and Land Bank program that sells newly built homes to income-qualified first-time buyers. In a May 7, 2026 announcement, the City said the Land Bank “provides up to $85,000 to buyers as a mortgage buydown and downpayment or settlement assistance.” It reported that the average Turn the Key buyer earns $45,000 a year, at 57% of area median income. The announcement does not list income limits or the application steps; they are on the program’s own web page.

A worked example

A buyer purchases a $250,000 single-family house in Philadelphia and qualifies for each program:

• Keystone Advantage Assistance: 4% is $10,000, but the cap is $6,000, so the loan is $6,000.
• K-FIT: 5% of $250,000 is $12,500, forgiven at $1,250 a year over ten years.
• Philly First Home: 6% is $15,000, but the cap is $10,000, so the grant is $10,000.

These are maximums, not promises, and the programs have separate rules about combining. Ask a participating lender which pairings apply to your loan.

Before you start

Compare programs with the actual cost of the purchase: see home prices in Pennsylvania and closing costs in Pennsylvania. Our page on buying a home in Philadelphia summarizes the local figures. For the steps of a purchase, read the steps of buying a home and our guide to FHA loans.