updated January 2024
HOMEBUYER INCENTIVES
When speaking with clients and friends, saving money for a downpayment and closing costs is the # 1 reason people are holding off on purchasing a home. Whether you are a first-time homebuyer or have previously owned a home, this can be a big hurdle. But fear not! There is a lot of help out there. You just need to know where to look and what you’re looking for. We came up with a trusty list of some of our favorite homebuyer assistance grants and loan programs. With a little help, your dream of owning a home may not be as far off as you thought!
There are a few things to keep in mind about all of the programs and grants listed below:
All of these programs must be applied to primary residence purchases only. No investment properties qualify.
While commonly thought of as first-time homebuyer programs, all of these programs only require that you currently do not own a home and haven’t owned a home in the last 3 years.
You cannot receive any cash back at settlement for any reason. Unfortunately, none of these programs or lenders will pay YOU to buy a house, but they can put a significant amount towards your purchase!
Many of these programs can be combined. We’ve had buyers qualify for First Front Door, Philly First Home, and the NOP program and bring as little as $3,500 total to buy their home.
Read the fine print. You want to look into if the grant must be re-paid in part or in full if you sell the property before a certain length of ownership. Know that if you sell before the required length of ownership that you’ll be repaying at least some of that grant money. As your Realtor, we can help you understand the terms and conditions.
Most of these programs require some type of homebuyer counseling to be completed to qualify. Sometimes the counseling for 1 program can fulfill the counseling requirement for another. These may be in-person or online sessions and are informative and painless.
Lastly, the requirements listed in this article are based on information pulled from May 2022. The financial and geographic information is subject to change based on data from the census tract and other resources. Philly Home Girls are always researching and staying updated on the current requirements, we can help you navigate the up-to-date information.
And now for the juicy details!!
BUILDING EQUITY (ELFANT WISSAHICKON REALTORS)
We are proud to offer an incentive from our brokerage. When working with an EWR agent (that’s us!), and purchasing a home under $200k, we will extend a commission rebate to you at closing as well as waive broker fees normally due from buyers. Simply put, this program (up to a $1,595 value) will reduce your closing fees and put some of the upfront costs of buying a home back in your pocket.
Program Requirements and Features
Offer extended to FHA or other low down payment buyers
Must be represented by an Elfant Wissahickon Realtor- which we are!
Purchase price must be under $200k
Buyer must occupy home. Not applicable for investors.
Buyers may receive a $500 rebate from Elfant Wissahickon Realtors at closing which can be combined with other credits, grants and gifts as approved by your lender. The settlement services fee of $495 will also be waived.
Select lenders will match the EWR $500 rebate.
Our affiliated title companies, Northwest Abstract and Class Abstract will waive notary and administrative fee which typically range from $150-$200
If you qualify, your Philly Home Girls agent will walk you through the process so you can claim your rebate.
AHP (Bank of Atlanta Federal Grant)
A forgivable grant subsidy providing a maximum of $7,500 to be used toward closing costs and down payment assistance. It can extend up to $10k for essential workers.
Program Requirements and Features:
Be a first-time homebuyer — meaning you have not owned a home within the past three years or owned a home only while married but not as a single person within the last three years. This includes a married couple if either has not owned a home in the past three years
Funds are completely forgiven over after 5 years. If the home is sold prior to five years, some of the grant subsidies may need to be repaid
Grant has no effect on 1st mortgage rate which will be based on market rates
Can be paired with an FHA or Conventional loan
Minimum Credit Score- 640
Termite Inspection required
There is no maximum DTI as long as loan is approvable through automated underwriting
You must attend an Online Homebuyer Education course
Current Program Income Limits: Single person $52,550, two people $60,500 , three people $68,500 and for four people $75,600. Note it goes off total household income even if all parties are not on the loan
To find out more and to get prequalified, contact Greg Roth at Cross Country Mortgage. You can give him a ring at (239)-565-1075. Let Greg know Philly Home Girls sent you!
PHILLY FIRST HOME
A homebuyer assistance grant, offered by the City of Philadelphia. Provides up to $10,000 (or 6% of the home’s purchase price, whichever is lower) to assist first-time homebuyers reduce the principal, cover down payment and loan closing costs. Because this is a grant, once all the money has been utilized the program closes and you need to wait until the next year when it is re-financed.
Program Requirements and Features:
Complete a free city-funded homeownership counseling program before you sign an agreement of sale
Property must be a single-family home or duplex located in Philadelphia (no condos)
You must be a first-time homebuyer, or not have owned your own home in the past three years
You must also meet certain income requirements. View the current income guidelines.
To apply for Philly First Home, contact a city-funded housing counseling agency. Your lender can help point you in the right direction as well.
First Front Door
Funding opens annually- once it’s gone it’s gone. 2024 funding opens April 16th.
A grant subsidy providing a maximum of $15,000 (new for 2024! It used to be $5k). The grant is to be used toward closing costs and down payment assistance. The buyers contribution must be $1,500 to secure $15,000 in assistance.
Program Requirements and Features:
Be a first-time homebuyer — meaning you have not owned a home within the past three years or owned a home only while married but not as a single person within the last three years. This includes a married couple if either has not owned a home in the past three years.
Secure a first mortgage through a participating lender. PHG recommended lender below!
Once approved, buyer has 6 months to purchase and close on a home
The income of the household must be at or below 80 percent of the area median income at the time of FFD program enrollment. To check income limits for all states (use low-income limit) click here.
Not be a student working less than 30 hours per week
Complete at least four hours of homeownership counseling prior to purchasing the home
Not receive cash back at settlement for any reason. Ensure that your lender provides no more than $250 cash back at loan closing.
Agree to maintain the home for five years in order to retain the full amount of the grant. If the home is sold prior to five years, some of the grant subsidies may need to be repaid
Learn more about First Front Door. PHG recommended lenders that offer First Front Door: Michael Dectis from Meridian Bank (484) 767-7040. Let him know we sent you!
TD BANK’s Right Step PRogram
No need to be a first-time homebuyer to utilize the features of this loan. No monthly PMI and as little as 3% down make your monthly mortgage payments as efficient as possible. Depending on your income you can either look in all Philly neighborhoods or low to moderate zones like East Kensington and many parts of South Philly.
Program Requirements and Features:
3% down no PMI
No Private Mortgage Insurance required
Can be combined with approved grants
Sellers assist up to 9% depending on the loan-to-value. At maximum lending, it can only be 3%
Competitive mortgage rates
Can be used for a multi-unit property. Requires 10% down on 2-4 unit that is owner-occupied
Can not own additional property
If the property is in the low to moderate-income census tract, there are no income restrictions for the borrower. Areas of Point Breeze, Kensington, Port Richmond, Brewerytown are included! We’re here to help you identify where these are
If the property is outside the low to moderate-income census tract, income restrictions of $53,990/yr household income for 1-4 person households
A minimum credit score of 620
Borrower needs to contribute $500 of their own funds
Must be your primary home but do not have to be a first-time homebuyer
To find out more and to get prequalified, contact Andy Krider at TD Bank. You can give him a ring at (484)-888-0446. PHG has been working with Andy for years, be sure to say hi for us!
Meridian Bank Loan Program
Provides 100% financing with no PMI. The best news is that it can also be combined with other grants, gifts and community second mortgages such as First Front Door, Philly First Home, and County Grants!
Program Requirements and Features:
Minimum borrower contribution of $1000 Minimum
680 or above credit score
Must meet income limits of 80% median income
Can be combined with other approved grants and gifts
Maximum 4% sellers assist
Property must be located in a low to moderate-income tract
You must be a first-time homebuyer, or not have owned your own home in the past three years
Online homeowners education is required
Offered by Meridian Bank. Contact Michael Dectis from Meridian Bank (484) 767-7040. He’s already helped a number of PHG clients secure this program!
Neighborhood Opportunity Program
Designed to assist individuals and families with limited income, or who are purchasing in low- and moderate-income areas, to realize their dreams of homeownership. Put as little as 3% down with no private monthly mortgage insurance!
Program Features
Low down payment options – up to 97% financing
No Private Mortgage Insurance required
Discount on closing costs - reduced fees
Minimal reserves – flexible guidelines
Seller’s assist up to 6% depending on the loan-to-value
Competitive mortgage rates
Program Requirements
If the property is in the low to moderate-income census tract, there are no income restrictions for the borrower.
If the property is outside the low to moderate-income census tract, income restrictions of $75,600/yr household income for 1-4 person households
A minimum credit score of 620. Between 620 and 680 the borrower must put down 5%. Above 680 credit score borrowers can put down 3%
To find out more and to get prequalified, contact Andrew Nemroff at WSFS Bank. You can give him a ring at 484-804-7007. This is one of the most popular programs for our clients!
HomeReady
HomeReady® mortgage, is a premier affordable lending product designed for creditworthy low-income borrowers. This loan allows for as little as 3% down with no geographic limits and a lower interest rate.
Program Requirements
Home Ready income limits are 80% of the area median income. In Much of Philly, that number is $91,520. The income limit is based on the borrower's income, not household income. NOP (mentioned above) uses household income to qualify whereas HomeReady uses the borrower’s income. This means a couple that makes 120K won’t qualify together, but if they want to borrow just based on one income, they can with HomeReady
Home Ready allows for a non-occupant co-borrower. So parents could help the borrower qualify
Borrower is not required to be a first-time buyer
Gifts, grants, and cash-on-hand permitted as a source of funds for down payment and closing costs
When all occupying borrowers on a HomeReady purchase transaction are first-time homebuyers, at least one borrower must complete the Framework online education course, regardless of LTV
Borrowers can qualify with credit scores as low as 620, but the lender relies on Fannie Mae's Desktop Underwriter to approve the loan based on all the risk factors
Contact our preferred lenders about the HomeReady Mortgage Andrew Krider from TD bank (484) 888-0446 or Michael Dectis from Meridian Bank (484) 767-7040. Michael Dectis also offers HomePossible (see directly below)
HOMEPOSSIBLE
HomePossible is very similar to the HomeReady Program guidelines
Student loan calculations are different for HomePossible. Qualified lenders will use .05% of the balance vs. 1% used in HomeReady if student loan is showing $0 payment and not on an income-based repayment plan
Accepts HomeView counseling which is free (vs Framework for HomeReady qualification which costs $75)
K-Fit LOAN Paired with PHFA LOAN
The “P” in a PHFA loan stands for Pennsylvania Housing Financing Agency. A PHFA loan is a government loan, that allows you to put as little as 3%-3.5% down depending on your credit score. It has many additional benefits and requirements that warrant a discussion with a loan officer. It is a fantastic loan to pair with the K-FIT loan. Below we have highlighted the K-FIT Loan which is an additional loan to help with closing costs.
A K-FIT loan provides 5% of the lesser of the purchase price or appraised value with no maximum dollar amount. For instance, if the price of a home is $215,000, the buyer may receive $10,750 in K-FIT loan assistance to be used toward the transaction.
Program Requirements:
K-FIT is a forgivable second loan, with 10% forgiven each year over 10 years. As a result, no monthly payment is required
The K-FIT purchase assistance loan may only be paired with PHFA’s Keystone Home Loan (KHL) program. Conventional, Federal Housing Administration (FHA), Rural Development (RD) and Veterans Affairs (VA) financing options are available. (For RD and VA financing, K-FIT may only be used to cover closing costs.) Complete housing counseling at a DHCD funded housing counseling agency
Household income can not exceed $137,200 for 1-2 persons or $160,100 for 3 or more member household
Maximum purchase price can be up to $659,000
All borrowers requesting K-FIT funds must have a minimum FICO score of 660
Borrowers obtaining K-FIT funds must complete homebuyer education counseling regardless of their credit score
A borrower applying for a K-FIT loan may not have liquid assets greater than $50,000 after deducting the funds to close on the loan
You must not have owned a home in the past 3 years
May be a slower closing process due to the popularity of the loan
Contact one of our preferred lenders about the K-FIT loan: Greg Roth from Cross Country Mortgage | (215) 264-7443 or Michael Dectis from Meridian Bank (484) 767-7040 or (239) 565-1075 or Lam Tran Guaranteed Rate.
We’re here to help
We are really lucky to live in a city that provides so many home-owning programs. Using opportunities like these can help you get those keys to your very own place. If you are ready to get started, Philly Home Girls is happy to help. Fill out the form below and we’ll be in touch!
If you are currently working with a realtor outside the Philly Home Girls team, you’re welcome to forward our blog and ask them more about the details.