A Comprehensive Breakdown of Philadelphia's Home Buyer Programs

If you're ready to buy your first home in Philadelphia, you might be surprised to find that you’ll have access to grants and interest-free loans that can be used to pay for purchases!

If you qualify for grant programs through the Philadelphia Housing Authority (PHA), you can use vouchers to pay your mortgage, and grants to pay for renovations, down-payments, and more! It is easier than ever to buy a home, and there several first-time buyers programs are available to offer their support — Keep reading to find out more!

Programs

We covered The Philly First Home Program in a recent article, and this program provides up to $10,000 to first-time home buyers, with a cap of $1,500 for the first year and $2,300 for each additional year. A

Another Program similar to the Philly First grant, the First Front Door (FFD). The FFD is a program from the Philadelphia Federal Credit Union, which provides a first-time home grant to help with down payments and closing costs, and will match the homebuyer’s contribution towards down payments and closing costs in a 3:1 ratio (up to $5,000). The program is available annually on a first-come, first-serve basis — Currently the FFD is closed for 2020, but will reopen for 2021.

First time home buyers who with lower incomes may be eligible for the PHA Housing Choice Ownership program, which provides first time home buyers with House Choice Vouchers. These can be used to pay monthly mortgage payments for a maximum of 15 years in a 20 year mortgage.

Philadelphia Housing Financing Agency (PHFA) First Time Homebuyer Program will allow the

PHFA to take over (buy) your loan at settlement and manage your repayment process. When your loan is managed by the PHFA, you may benefit from a lower interest rate, fewer fees, simpler rate terms, down payment and closing cost assistance.

Potential Downsides

First time home buyer programs tend to have retention requirements which prevent sale of the property, or a refinancing of the mortgage, before a specific date (if you want to avoid repayment). For example, The Philly First Home grant requires that the owner of the home purchased through the program remains the owner for fifteen years — if the owner refinances their mortgage or sells before that fifteen year mark, they will likely have to pay back the grant. Another potential downside to home buyer programs is the private mortgage insurance (PMI). If you purchase a home for less than 20% down, you may be required to pay for PMI, and premiums range from 0.55% to 2.25% of the original loan.