Buying your first home in Pennsylvania is more approachable with the right support. From low-down-payment loans to PHFA-backed assistance, here’s what you need to know.
At Foyer, we simplify the path to homeownership for first-time buyers. With personalized guidance and a roadmap tailored to your financial goals, you're never alone in this journey.
Pennsylvania offers a strong mix of federal mortgage options, statewide housing agency programs, and down payment assistance. Together, these benefits help reduce upfront costs and make qualifying for a mortgage easier.
Most new buyers in Pennsylvania start with one of four main mortgage types. These loans are designed to help first-time buyers enter the market with lower down payments and flexible credit requirements.
The Pennsylvania Housing Finance Agency (PHFA) is the state’s central resource for first-time homebuyers. PHFA works through approved lenders to provide affordable mortgage products and financial support.
Saving for upfront costs is often the biggest barrier for first-time buyers in Pennsylvania. PHFA provides multiple programs to help bridge the gap.
While Pennsylvania doesn’t offer a state-level FHSA, buyers can combine PHFA programs with federal tax advantages like Mortgage Credit Certificates (MCCs). The result is a layered approach that reduces both upfront and long-term costs.
Pennsylvania does not currently offer a state-level First-Time Homebuyer Savings Account (FHSA). That means there’s no special Pennsylvania tax deduction or credit for setting up a designated savings account.
But buyers aren’t without options. You can still open a dedicated savings account to keep your down payment funds separate, set clear goals, and automate contributions. With Foyer, you also get tools to stay on track — and the ability to explore match opportunities and partner programs that stack with PHFA assistance.
While there’s no Pennsylvania FHSA, buyers can benefit from:
The Pennsylvania Housing Finance Agency (PHFA) offers a range of affordable mortgage products and assistance options. These programs are delivered through PHFA-approved lenders and are designed to reduce upfront costs and support sustainable homeownership.
PHFA works with lenders across the state to provide fixed-rate mortgage products that can be paired with down payment assistance. Options include:
Saving enough upfront is often the biggest challenge for Pennsylvania buyers. PHFA provides structured assistance programs to help bridge the gap.
PHFA allows exceptions for veterans and buyers in targeted areas, waiving the first-time buyer requirement. Some local overlays also provide extra support for educators, healthcare workers, or public service employees.
PHFA administers a Mortgage Credit Certificate (MCC) Program that provides a federal tax credit of up to $2,000 per year on mortgage interest. This can be layered with PHFA loans and down payment assistance for additional long-term savings.
Most PHFA programs require completion of a homebuyer education course. These classes cover budgeting, loan terms, and ownership responsibilities, and they are typically available online or through approved local providers. A completion certificate is required before closing.
Understanding Pennsylvania’s taxes and fees is key to budgeting for your first home. While the state does charge a realty transfer tax, some programs and exemptions can reduce your overall costs.
Pennsylvania charges a 1% state realty transfer tax on property sales. This cost is typically split between the buyer and seller, though it can be negotiated in the purchase contract.
In addition to the statewide tax, many counties and municipalities levy their own local realty transfer tax, often around 1%. For example:
Pennsylvania homeowners may qualify for property tax relief through:
Closing costs in Pennsylvania typically range from 2% to 6% of the purchase price, depending on location. On a $250,000 home, that means between $5,000 and $15,000 in total costs. The realty transfer tax is often the largest line item after your down payment.
Some Pennsylvania employers — particularly universities, healthcare systems, and municipal governments — offer Employer-Assisted Housing (EAH) programs. These may include down payment assistance, forgivable loans, or matched savings to encourage employees to buy near their workplace.
Local grants and employer benefits can often be stacked with PHFA loans and the Keystone Advantage Assistance Loan. For example, a buyer in Philadelphia might use PHFA’s Keystone Home Loan with $6,000 in statewide assistance, plus Philadelphia’s $10,000 grant — reducing upfront costs significantly.
Every buyer’s journey looks different. Some need more time to save, while others are nearly ready to make an offer. Here’s a plan for both paths.
Even though Pennsylvania doesn’t have an FHSA, setting up a dedicated savings account for your down payment and closing costs keeps your money organized and builds momentum.
PHFA requires a homebuyer education course. Taking it early helps you understand budgeting, mortgage options, and ownership responsibilities well before you’re under contract.
Review PHFA programs, plus local support like Philadelphia’s $10,000 grant or Pittsburgh’s $5,000 assistance. Check with your employer to see if they offer matched savings or forgivable housing benefits.
Work with a lender who participates in PHFA programs. They’ll confirm what you qualify for and show you how assistance can lower your upfront costs.
Apply early for the Keystone Advantage Assistance Loan or PHFA’s MCC program, as some assistance has limited funding.
When you make an offer, ensure your contract reflects any assistance or credits you plan to use. Confirm closing costs with your lender and title company so there are no surprises at settlement.
A first-time buyer in Pennsylvania is usually defined as someone who hasn’t owned a home in the past three years. To qualify for PHFA programs, you’ll also need to meet income and purchase price limits, complete homebuyer education, and plan to live in the home as your primary residence. Veterans and buyers in targeted areas may qualify even if they’ve owned a home more recently.
You may not qualify if you’ve owned a home in the last three years (unless you qualify for an exception), if your income or purchase price is above PHFA’s limits, or if you’re buying a home you don’t plan to live in full time. Investment and vacation properties don’t qualify.
The down payment depends on your loan type. FHA loans require as little as 3.5% down, conventional loans may allow just 3% for first-time buyers, and VA or USDA loans may allow 0% down if you’re eligible. PHFA’s Keystone Advantage Assistance Loan can also cover up to $6,000 of your down payment, reducing your upfront costs.
Yes. PHFA offers assistance loans that act like deferred grants, and many local cities add their own support. Philadelphia’s program provides up to $10,000, Pittsburgh offers up to $5,000, and Allentown provides up to $5,000 for qualified buyers.
Income and purchase price limits vary by county and household size. Limits in Philadelphia or Allegheny counties are higher than in rural areas. PHFA updates these charts annually, and approved lenders can confirm whether you qualify.
While there isn’t a first-time buyer–specific tax break, homeowners can apply for the Homestead and Farmstead Exclusion, which reduces the taxable value of a primary residence. Seniors and disabled veterans may qualify for additional exemptions in some counties.
Goal-based saving and planning tools
Foyer gives you a dedicated place to save for your first home in Pennsylvania. You can set milestones, automate contributions, and track your progress so you always know where you stand with your down payment and closing costs.
Education, transparency, and local partner support
We explain PHFA programs and local grants in plain language so you understand your options without jargon. When you’re ready, we connect you with trusted Pennsylvania lenders and agents who know how to layer state, local, and federal assistance.
Banking and tax disclaimers
Foyer provides education and savings tools, but we’re not a tax, legal, or lending advisor. Banking services are offered through our FDIC-insured partner. For questions about PHFA programs, MCCs, or exemptions, always consult your lender or tax professional.
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Foyer is a fintech company, not an FDIC-insured bank. Banking services provided by Pacific West Bank, Member FDIC. Deposit insurance covers the failure of an insured bank.
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