Pennsylvania HOMEstead Program Guide

Guide to the Pennsylvania HOMEstead Program

The Pennsylvania HOMEstead Program is designed to assist eligible homebuyers by providing financial assistance for down payments and closing costs. With affordable financing options and support for upfront expenses, this program makes homeownership more accessible to first-time buyers and others in Pennsylvania. Below is a detailed guide to the program’s features, eligibility requirements, and application process for 2025.

1. Program Overview:

• Purpose: The HOMEstead Program helps reduce the financial barriers to homeownership by offering deferred loans for down payment and closing cost assistance.
• Loan Terms: The program provides a 30-year fixed-rate mortgage with predictable monthly payments to support long-term affordability.
• Assistance Amount: Eligible buyers may receive up to $10,000 in down payment and closing cost assistance. This assistance is provided as a deferred second mortgage with no monthly payments.

2. Eligibility Requirements for 2025:

To qualify for the Pennsylvania HOMEstead Program, applicants must meet the following criteria:

• First-Time Homebuyer: The program is primarily intended for first-time buyers, defined as individuals who have not owned a home in the past three years. Exceptions may apply, such as for buyers in targeted areas.
• Income Limits: Household income must fall within program limits, which are based on area median income (AMI) and adjusted for household size and location.
• Credit Score: A minimum credit score of 620 is typically required. Additional requirements may apply depending on the lender.
• Property Requirements: The property must be located in Pennsylvania, used as the buyer’s primary residence, and meet program price limits and eligibility guidelines.
• Homebuyer Education: Completion of a homebuyer education course is mandatory to ensure applicants are prepared for the responsibilities of homeownership.

3. How to Apply:

Follow these steps to apply for the Pennsylvania HOMEstead Program:

• Contact a Participating Lender: Begin by reaching out to an approved lender who can guide you through the program requirements and assist with the application process.
• Prepare Documentation: Gather the necessary documents, including proof of income, tax returns, credit reports, and a certificate of completion for the homebuyer education course.
• Submit Your Application: Work with your lender to complete and submit the application. The lender will process your information and inform you of your eligibility and loan approval status.

4. Homebuyer Education Course:

• Mandatory Requirement: All applicants must complete a homebuyer education course. This course covers essential topics such as budgeting, mortgage terms, and homeownership responsibilities.
• Course Options: The course can be completed online or in person. Upon completion, participants will receive a certificate to include with their loan application.

5. Down Payment and Closing Cost Assistance:

• Assistance Amount: The program provides up to $10,000 for down payment and closing costs. This assistance is structured as a second mortgage with deferred payments.
• Repayment Terms: The deferred second mortgage is forgiven at a rate of 20% per year over five years. If the buyer remains in the home for five years, the entire loan is forgiven.

6. Finalizing the Loan:

• Loan Approval: After your application is approved, your lender will guide you through the final steps, including reviewing loan terms, signing documents, and preparing for the closing process.
• Closing Costs: While the program provides assistance for upfront costs, buyers may still be responsible for some closing expenses. Your lender will provide a clear explanation of these costs and payment expectations.

The Pennsylvania HOMEstead Program is a valuable resource for homebuyers, offering financial support and guidance to make homeownership achievable and sustainable. With deferred assistance and affordable loan options, this program helps reduce the financial challenges of purchasing a home. Begin your homeownership journey today with the Pennsylvania HOMEstead Program.