PHFA HOMEstead Down Payment and Closing Cost Assistance L...

PHFA HOMEstead Down Payment and Closing Cost Assistance Loan is a flagship PHFA initiative designed to

expand sustainable homeownership across Pennsylvania. The program pairs competitive first‑mortgage financing

with up to $10,000 (0% loan, forgiven 20%/yr) or related incentives. Borrowers complete HUD‑approved

counseling, gain access to free post‑purchase education, and may layer additional assistance such as Mortgage

Credit Certificates or local grants. Funds are available statewide and disbursed through a network of

PHFA‑approved lenders. Applicants benefit from predictable fixed‑rate terms, no prepayment penalties, and a

streamlined underwriting process that recognizes alternative credit histories. For homeowners undertaking

renovations, escrow accounts ensure contractors are paid as milestones are met, protecting borrowers and

improving project quality.

• U.S. citizen, permanent resident, or qualifying non‑citizen.

• Minimum 620 middle credit score (680 for conventional products).

• Household income not exceeding county‑specific PHFA limits (e.g., $124,500 in Philadelphia).

• Purchase‑price cap aligned with FHA/VA limits or $548,250, whichever is less.

• Completion of an 8‑hour HUD‑approved homebuyer workshop and PHFA one‑on‑one counseling session.

• Property must pass PHFA health & safety inspection; manufactured homes must be double‑wide or larger.

• Up to $10,000 (0% loan, forgiven 20%/yr) applied toward down payment, closing costs, or rehabilitation escrow.

• 30‑year fixed‑rate mortgage below market averages.

• No recapture tax for loans held ≥ 9 years.

• Waived mortgage insurance for HFA Preferred loans with ≥ 20 % equity.

• Access to PHFA’s foreclosure‑prevention hotline and counseling network.

1. Pre‑approval: Choose a PHFA‑approved lender; complete credit and income review.

2. Education: Finish an 8‑hour HUD class plus PHFA counseling; obtain completion certificate.

3. Loan reservation: Lender locks PHFA rate and reserves assistance funds via the PHFA portal.

4. Underwriting & appraisal: Provide bank statements, tax returns, home inspection, and appraisal.

5. Closing: Sign first‑mortgage and subordinate‑lien docs; assistance funds disbursed at settlement.

6. Post‑purchase: Occupy the home as primary residence within 60 days; maintain property insurance; return for optional budget coaching within 12 months.