PHFA - Keystone Home Loan

The Pennsylvania Housing Finance Agency (PHFA) offers mortgage loans with low interest rates & closing costs through two programs: Keystone Home Loan and

Benefits of a PHFA home loan

• Low interest rates - your choice between a zero point or a one point option (the discount point reduces the interest rate).
• Fewer fees. PHFA limits certain fees (closing costs)
• Down payment and closing cost assistance is available for eligible borrowers.
• 30-year, fixed rate terms.
• Conventional (i.e. Fannie Mae, Freddie Mac), FHA, VA, or RHS mortgages
• Discount on title insurance policy for most loans.
• PHFA offers a longer in rate lock for no extra fee.

1. You and all other adults who intend to live in the home within 12 months from closing are first-time homebuyers. This is defined as someone who has not owned (had Title to) their principal residence during the previous three years. Or, you are not a first-time homebuyer, but you plan to buy a home in a Targeted county or area or you are a discharged veteran of the United States Armed Forces. Target counties are indicated by a "T" in the listing of Purchase Price and Income Limits. Please note that some Non-Target counties have targeted neighborhoods within them.

2. The gross annual household income for all adults that intend to occupy the home within one year from loan closing does not exceed the Keystone Home Loan Income Limits. All sources of income must be included, except for income received by persons under age 18 and income received by dependants enrolled in a full-time undergraduate program.

3. The purchase price of your prospective home does not exceed the Keystone Home Loan Purchase Limits. This includes all costs for a complete home. It is also known as the total acquisition cost. The appraised value of land owned outright for more than two years does not need to be included.

4. You have an acceptable credit history and the ability to make monthly payments on the home you expect to buy. Generally, you should plan to use no more than 30 percent of your income for your monthly mortgage payment. A participating lender or PHFA network counseling agency can help you determine how much of a home you can afford, as well as any credit issues you may need to work on.

5. You have sufficient funds to pay standard mortgage application and closing fees. Check with a PHFA participating lender to determine the specific costs. These would commonly include such things as credit reports, appraisals, title fees, etc. Buyers who qualify for a PHFA home loan may be able to receive a 25 percent discount on their title insurance, upon request. This could be a savings of hundreds of dollars, depending on your loan amount. So, be sure to ask the lender to request the discount, if applicable. The discount does not apply to loan amounts greater than $200,000 or to the Approved Attorney Procedure.

6. You have sufficient funds for a down payment on your prospective home. Borrowers who have a down payment of less than 20 percent of the home’s purchase price or appraised value are required to obtain mortgage insurance to protect the lender and PHFA in the event that the mortgage becomes delinquent (you fall behind on your payments). The amount of the down payment differs according to the loan type as listed below. - per PHFA