What PHFA does, and what a lender does with it
The Pennsylvania Housing Finance Agency doesn’t sit across a desk from you. It sets the loan products and the assistance seconds, and participating lenders originate them. You apply to the lender, the lender reserves the funds with PHFA, and the assistance shows up at closing as a second lien. Every limit below took effect for reservations on or after July 1, 2026, so anything you read with older numbers is out of date.
Keystone Home Loan: the first mortgage
Keystone Home Loan is the base product. It can be a conventional loan insured through PHFA’s own fund with 3% to 5% down, an FHA loan at 3.5% down, or a VA or USDA loan at 0% down. You need to be a first-time buyer, meaning no ownership of a principal residence in the past three years, unless you’re buying in a targeted area or you’re a discharged veteran. The conventional version needs a 660 score.
The income and purchase price limits are set by county, and Philadelphia gets its own higher tier because the whole county is targeted.
| County | Max purchase price | Income, 1–2 people | Income, 3+ people |
|---|---|---|---|
| Philadelphia | $730,600 | $147,200 | $171,700 |
| Bucks | $588,800 | $122,700 | $141,100 |
| Montgomery | $588,800 | $122,700 | $141,100 |
| Delaware | $588,800 | $122,700 | $141,100 |
| Chester | $588,800 | $122,700 | $141,100 |
A duplex can go up to 10% above the single-unit price cap. Some census tracts inside the suburban counties are also targeted, which waives the first-time buyer rule there; the lender can look up a specific address.
The assistance seconds
This is the part people call about. PHFA offers three second mortgages for down payment and closing costs in 2026, and you pick one.
| Program | Amount | Interest | Repayment |
|---|---|---|---|
| Keystone Advantage | Lesser of 4% of price or $6,000 | 0% | Monthly payments over 10 years |
| K-FIT | 5% of the lesser of price or appraised value, no dollar cap | 0%, no payments | Forgiven 10% per year over 10 years |
| K-DATE, new in 2026 | 8% for loans of $150,000 or less, 5% above that | 0%, no payments | Due on sale, refinance, or payoff, deferred up to 30 years |
All three need a 660 credit score and a $500 minimum. Keystone Advantage and K-FIT cap your liquid assets at $50,000 after closing. K-DATE requires homebuyer counseling. Employees of companies in PHFA’s Employer Assisted Housing program can get Keystone Advantage up to $8,000.
K-FIT pairs with Keystone Home Loan or Keystone Flex. Keystone Advantage pairs with Keystone Home, Keystone Government, or HFA Preferred. Which second fits depends on the first mortgage. The full list is on PHFA’s assistance page.
Keystone Flex and Keystone Government
Owned a house before? Keystone Flex has no first-time requirement. Effective July 1, 2026 its qualifying income limit is $212,000 and the price limit is $730,600 in every county, and it pairs with K-FIT or K-DATE. Lender blogs still showing $196,200 and $659,000 are quoting last year.
Keystone Government wraps an FHA, VA, or USDA first mortgage with no PHFA income or price limits at all, though the federal loan limits and USDA income rules still apply. Borrowers under a 680 score complete a homebuyer course. It pairs with Keystone Advantage.
A worked example
You buy a $300,000 twin in Upper Darby with a Keystone Home Loan on FHA terms. The down payment at 3.5% is $10,500. K-FIT provides 5%, which is $15,000, so the down payment is covered and $4,500 goes toward closing costs. Your half of the transfer tax in Upper Darby is $3,750, since that township charges 2.5%. Nothing on the K-FIT second is due monthly, and $1,500 of it is forgiven each year.
Pick Keystone Advantage instead and the second is $6,000, since 4% of $300,000 is $12,000 and the cap is $6,000. That’s $50 a month for ten years. Pick K-DATE and the second is 5% of $300,000, or $15,000, with nothing due until you sell, refinance, or pay off the first mortgage.
Every PHFA second is a lien on the house. Selling or refinancing before K-FIT is fully forgiven, or at any point with K-DATE, means settling the balance at that closing. Ask the lender to walk you through what year five looks like before you choose.
HOMEstead and the MCC
You’ll see HOMEstead described online as up to $10,000 at 0% deferred. As of August 2026 it isn’t listed on PHFA’s assistance pages and its program page is gone, so we treat it as not currently offered. Same with the Mortgage Credit Certificate: the program pages are down and we couldn’t confirm PHFA is issuing them. If either comes back, the lender will know first.
Two smaller items are live. A $500 PHFA Grant comes with the HFA Preferred loan, and the Access programs offer up to $15,000 in down payment help and $1,000 to $10,000 in modification funds for households with a disabled member.
Where PHFA fits in the metro
In the city, PHFA’s $730,600 price cap covers nearly everything short of a Society Hill townhouse, and the $147,200 income limit for a couple is generous by any local standard. It stacks with Philly First Home when the lender allows it. In the suburbs the $588,800 cap does most of the work in Delco and Lower Bucks and starts to pinch on the Main Line. The county pages for Bucks and for Montgomery, Delaware, and Chester show how the county programs layer on top.
Start with one call
Tell us where you’re looking, the price range, and your score. We’ll connect you with a PHFA-approved lender, and which combination of first and second fits your county gets answered in one call. Call us.