PHFA Purchase Improvement Loan Program | Pennsylvania Hou...

PHFA Purchase Improvement Loan Program is a flagship PHFA initiative designed to expand sustainable

homeownership across Pennsylvania. The program pairs competitive first‑mortgage financing with up to $15,000

rehab escrow 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 $15,000 rehab escrow 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.