If you’re in the market to buy, you don’t want to miss these down payment resources in PA. In the great state of Pennsylvania, there are actually quite a few programs that can help you get into your first home. These include closing cost assistance programs and government grants, along with proposed tax credits that can help you save big on your purchase.
In this post, we’ll talk about one of the biggest benefits buyers can take advantage of — down payment assistance.
Why opt for down payment resources in PA?
Buying a house is a big deal (no pun intended). Many buyers don’t have the means to pay for a home outright, which means they need to take out a mortgage to fund their purchase. Most mortgage lenders typically require some form of down payment. A down payment not only shows the lender that the buyer is willing to commit but also reduces the risk involved in lending money to the buyer.
Unfortunately, coming up with the cash can be difficult. That’s because many lenders require anywhere from 5% to 20% of the loan amount as a down payment. Some quick math will show you that this can easily equate to tens of thousands of dollars. But if you’ve got your sights set on purchasing a home, you don’t have to worry. We’ve put together this list of down payment resources in PA that can help you become a home owner, even if you don’t have a big bag of money lying around.
Federal down payment resources in PA
Before we jump into programs that focus specifically on down payment assistance, let’s look at some federal loan types that can significantly reduce your required down payment amount. These loans include FHA (Federal Housing Administration), VA (Veterans Affairs), and USDA (US Department of Agriculture) loans.
- FHA loans: These loans have been helping home buyers since 1934, and they’re a popular option among buyers who haven’t been able to save for a home purchase. FHA loans can bring your down payment requirement down to as low as 3.5%, so long as you meet some basic eligibility requirements.
- VA loans: If you or your spouse served in the military, this type of loan may be for you. Some benefits include lower closing costs, no need for PMI (Private Mortgage Insurance), and no required down payment.
- USDA loans: Don’t be fooled by the name. Though you might think that a loan from the US Department of Agriculture is only available if you’re considering life on the farm, a lot of buyers like you are eligible for these loans. And one of the biggest benefits is you can get 100% financing, meaning you don’t need any down payment.
- CONVENTIONAL loans: Many people think that they need to put 20% down to purchase a home using a conventional loan for financing their new home—NOT TRUE! Many buyers can qualify with as little as 3% down so don’t rule out a conventional loan if you’re short on funds.
Local down payment resources in PA
Every state typically offers at least a few programs to help home buyers, and Pennsylvania is no exception. Here’s a list of down payment resources available throughout the state, along with one that’s exclusive to Cumberland County buyers.
- Keystone Advantage Assistance Loan: This loan can provide up to $6,000 to help cover costs associated with buying a home, including the down payment. If you take advantage of this, the loan will be amortized over a ten year period, but the good news is it comes with a 0% interest rate. Click the link to see if you meet the eligibility requirements, or get in touch with us for more help.
- K-FIT Loan: The Keystone Forgivable in Ten Years Loan Program (K-FIT) is designed to cover down payment and/or closing costs. With this loan, you can receive 5% of the home’s purchase price or appraised value (whichever is less), and there’s no maximum dollar amount you can receive. The best part is this loan is forgiven at a rate of 10% per year, meaning it’s totally forgiven after ten years. So if you receive $10,000 in assistance, $1,000 is forgiven every year, and you owe nothing after ten years. See if you meet the eligibility requirements, and ask us any questions you might have.
- CUMBERLAND COUNTY Down Payment and Closing Cost Assistance Program: This program is exclusive to Cumberland County. If you’re a first-time home buyer who wants to buy in Cumberland County, and have lived or worked in the county for at least six months, you can be eligible for up to $5,000 in assistance. The amount comes in the form of an interest-free loan that is forgiven on a monthly basis, and after five years the loan is completely forgiven. If you’re looking to buy in Cumberland County, set up quick chat with Team Hadley and we’ll show you if you qualify.
- DAUPHIN COUNTY FIRST TIME BUYER PROGRAM: This program provides a a second lien or subordinate loan of up to $3000 to help you if you are a first time buyer and are purchasing a home in Dauphin County. This money comes in the form as an interest free loan that will be required to be paid back when the home is sold or refinanced. If you’re looking to buy in Dauphin County, set up quick chat with Team Hadley and we’ll show you if you qualify.
Get the best down payment for your needs
No matter what step you’re taking in the home buying journey, you don’t want to miss these down payment resources. But first, you need to pre-qualify. Get in touch with Team Hadley to see how much you can afford, and discover which down payment resources will give you the most bang for your buck.
Learn all about the buying process
If you’re ready to learn all about the home buying process, download our Path to Homeownership guide. You can see what goes into a mortgage payment, how to be mindful of your credit score, and what steps you’ll take during the financing process.
