Do these in the right order
The city’s grant, the state’s second mortgage, and the lender’s low-down-payment loan can all sit on one purchase. Each has a rule about timing, and the one that bites most people belongs to the city. Philly First Home requires one-on-one counseling at a City-funded agency before you sign the Agreement of Sale. Sign first and the $10,000 is gone.
So: call, get pre-approved, book the counseling, then start looking seriously. The session is also where somebody finally explains the transfer tax, the biggest line on a city closing statement after the down payment.
What a $300,000 rowhome costs a first-time buyer
Here’s the cash side of a $300,000 house in the city with an FHA loan at 3.5% down and the buyer paying the customary half of the 4.578% transfer tax. Lender fees, prepaids, and insurance come on top; the lender estimates those for the exact address.
| Line | Amount | Notes |
|---|---|---|
| Down payment, FHA at 3.5% | $10,500 | $9,000 on a conventional loan at 3% |
| Buyer’s half of transfer tax, 2.289% | $6,867 | $3,000 in Bucks, Montco, Delco, or Chester |
| Owner’s title policy | $2,165 | Statewide filed rate, same at any title agent |
| Philly First Home grant | up to $10,000 | Lesser of $10,000 or 6% of price |
| PHFA K-FIT second mortgage | $15,000 | 5% of price, 0%, forgiven 10% a year |
Between them, the grant and the state second can cover the down payment and the transfer tax on this house, which is why city first-time buyers often close with far less cash than the sticker suggests. Seller assist is normal here too. One caution: whether the city grant and a PHFA second can share a file depends on the lender and the programs’ current rules, so ask before you count on both.
The loan underneath
The assistance attaches to a first mortgage, and for most first-time buyers that’s one of two. FHA takes a 580 score at 3.5% down, with a 2026 limit of $630,200 in all five counties. Conventional wants a 620 score and allows 3% down if your income is at or under 80% of the area median for the address. Read FHA loans and conventional loans for the rest.
The city’s money: Philly First Home
The grant is up to $10,000 or 6% of the purchase price, whichever is less, for down payment or closing costs. It’s for buyers who haven’t owned a home in the past three years. The house has to be a single-family home or duplex in Philadelphia; condos are out. Grants run while funding lasts; as of August 2026 the city hasn’t posted a closing date.
Gross household income has to sit under these limits:
| Household size | Income limit |
|---|---|
| 1 | $85,900 |
| 2 | $98,200 |
| 3 | $110,500 |
| 4 | $122,700 |
Move out or refinance before you’ve lived there 15 years and the grant has to be repaid. The Philly First Home guide covers how to apply and what kills eligibility.
The state’s money: PHFA
PHFA’s Keystone Home Loan is a first mortgage, conventional, FHA, VA, or USDA, with assistance attached. For reservations from July 1, 2026 the price cap is $730,600 in Philadelphia and $588,800 in the suburban counties. Income caps for a one- or two-person household are $147,200 in the city and $122,700 in the suburbs, higher for three or more.
- K-FIT. 5% of the price or appraised value, whichever is less, as a second mortgage at 0% with no payments, forgiven 10% a year over ten years. No dollar cap.
- Keystone Advantage. Up to 4% of the price or $6,000, whichever is less, at 0%, repaid over ten years.
- K-DATE. New in 2026. 5% of the price (8% on loans of $150,000 or less) at 0%, no monthly payment, due when you sell, refinance, or pay off the first mortgage.
- Keystone Flex. For repeat buyers or incomes over the Keystone Home Loan cap. Income limit $212,000, price cap $730,600, pairs with K-FIT or K-DATE.
Every PHFA option wants a 660 credit score and no more than $50,000 in liquid assets after closing. The PHFA guide has the rest.
If you work at Penn, Drexel, or Temple
The universities pay their people to live near campus. Penn and its health system offer a $7,500 forgivable loan inside a West Philadelphia boundary, Drexel offers $15,000 between 31st and 48th Streets from Girard to Chestnut, and Temple offers $5,000 in five North Philadelphia ZIP codes and $4,000 in three more. The city’s Home Buy Now program matches an employer benefit up to $4,000 under 115% of area median income.
The suburbs have their own version
Every collar county runs its own program. Bucks: up to $10,000 as a 0% deferred loan through Bucks County Housing Group. Montgomery: 10% of the price up to $10,000, forgiven if you stay 15 years. Delaware County: Homeownership First, up to $10,000, forgiven after five years in a revitalization area. Chester County: up to $40,000 for buyers under 80% of area median income. Each requires counseling before you sign a contract. Details in the Montco, Delco, and Chester assistance guide and the Bucks County first-time buyer guide.
Philly First Home counseling must be finished before you sign the Agreement of Sale. There’s no fixing it afterward, and listing agents in Fishtown and Passyunk want a signed agreement the same evening. Book it the week you get pre-approved.
Start with one call
Tell us your income, your household size, and the neighborhood. We’ll connect you with a lender who does Philly First Home and PHFA files and knows which pieces stack, in the right order. Call us.