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How does PHFA work? 

HFA PreferredTM (Lo MI)

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Keystone Flex with K-FIT

PHFA Assistance Programs

First Front Door

Keystone Advantage Assistance Loan Program

Keystone Forgivable in Ten Years Loan Program (K-FIT)

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PHFA: How Does It Work?

Two story all brick house with concrete drivewayIf you're seeking assistance in obtaining affordable and safe housing in Pennsylvania, the Pennsylvania Housing Finance Agency (PHFA) can help. Established in 1972, PHFA provides financing for single-family homes, rental units, and local housing initiatives that benefit individuals with special housing needs or those with modest means, including senior citizens.

The agency operates through the sale of securities and program participant fees and is overseen by a board of 14 individuals. PHFA provides counseling and resources to help homeowners avoid foreclosure and offers a range of financing options for those seeking to purchase their first home or refinance an existing mortgage.

Trust PHFA to provide the financing and support you need to make homeownership in Pennsylvania a reality.

Here's How PHFA Works

Think of PHFA (Pennsylvania Housing Finance Agency) as a bank. And like all banks, they lend money to their customers. PHFA's customers are the banks and mortgage brokers, who, in turn, use funding from PHFA to provide mortgage financing to their customers.

The banks and mortgage companies handle the paperwork on behalf of PHFA. After the loan closes, the banks and mortgage companies pass the paperwork to PHFA. PHFA pays the banks and mortgage companies a commission for their efforts.

PHFA establishes loan programs and guidelines. Here is a list of the popular PHFA mortgage and assistance programs:

HFA Preferred (Lo MI)

The Pennsylvania Housing Finance Agency (PHFA) offers the HFA Preferred (Lo MI) conventional mortgage program to assist borrowers with low to moderate incomes in acquiring a house. With the program, qualified buyers may put down as little as 3% of the purchase price and pay a lower mortgage insurance fee.

This makes it an affordable choice for borrowers who lack the resources for a typical down payment. The program also provides reasonable interest rates and liberal credit standards, making it easier for customers to qualify for a loan.

For individuals wishing to become homeowners in Pennsylvania while keeping their expenses down, PHFA: HFA Preferred (Lo MI) is a great choice.

Keystone Home Loan

A PHFA Keystone Home Loan mortgage program is available in Pennsylvania to help first-time homeowners. The program offers qualified borrowers a low-interest loan that may be utilized to pay for up to 97% of the cost of a property.

Borrowers' ability to budget for the up-front expenditures of purchasing a property is made simpler by the loan's ability to pay closing charges and associated costs.

Moreover, the Keystone Home Loan has lenient credit standards that enable applicants with less-than-perfect credit to get approved for a loan. Overall, for first-time homebuyers who want help financing their dream house, the PHFA Keystone Home Loan is a great choice.

Keystone Government Loan

It's important to remember that the down payment specifications may change based on the kind of loan, even though the PHFA Keystone Government Loan program is accessible to consumers seeking FHA, VA, and USDA financing.

For instance, USDA financing provides a zero-down payment option, whereas FHA financing needs a minimum down payment of 3.5% of the purchase price.

For qualified applicants, VA financing also provides a zero-down payment alternative. The Keystone Government Loan program is a valuable alternative for people seeking government-backed financing in Pennsylvania.

Despite the various down payment requirements, it may still provide qualifying borrowers with a low-interest loan and aid with closing fees and associated expenditures. There are no first-time home buyer requirements with this program.

Keystone Flex with K-FIT

The PHFA Keystone Flex with K-FIT program includes FHA, USDA, conventional, and VA financing, all with different down payment requirements.

Although USDA financing provides a zero-down payment alternative, FHA lending needs a minimum down payment of 3.5%. VA financing provides a zero-down payment alternative for qualified buyers, whereas conventional financing calls for a minimum down payment of 3%.

About the Keystone Home Loan, the K-FIT feature enables qualified borrowers to fund home renovations and repairs as a second no-interest loan inside their mortgage. The debt is forgiven over ten years at 10% each year.

All loan types covered by the program may use this feature, making it a practical choice for borrowers looking for a flexible and cheap mortgage in Pennsylvania.

Keystone Flex-Purchase & Improvement with K-FIT

A PHFA Keystone Flex-Purchase & Improvement with K-FIT mortgage program is available to qualified Pennsylvania borrowers who wish to buy a house that needs repairs or improvements.

This program adheres to the HomeStyle Renovation standards and calls for a 3% minimum down payment, making it an accessible choice for borrowers who do not have the money for a higher down payment.

The Keystone Home Loan K-FIT is a unique feature of the Keystone Flex-Purchase & Improvement with K-FIT program. It enables qualified borrowers to finance home repairs and upgrades into their mortgage as a second no-interest loan.

This loan is an excellent choice for borrowers who want help paying for essential repairs or improvements to their new property since it is completely forgiven after ten years.

Overall, the PHFA Keystone Flex-Purchase & Improvement with K-FIT program is an excellent option for borrowers who want to buy a house that requires repairs or upgrades but need help paying for those changes.

Keystone Advantage Assistance Loan Program

The Keystone Advantage Program provides a zero-interest 2nd loan to eligible borrowers for the down payment and or closing costs. The maximum grant is $6,000, which is repaid over ten years.

Keystone Forgivable in Ten Years Loan Program (K-FIT)

This is the program everyone talks about. Eligible borrowers can receive up to $10,000 for the down payment and closing costs.

The following chart needs to be updated, but it will give you a visualization of how PHFA works.:

PHFA flow chart


In conclusion, the PHFA Loan is a great way to finance your home, and it has many benefits that make it an attractive option for homeowners. The qualifications are straightforward, and the application process is simple.

With the help of a PHFA loan officer, you can be on your way to owning your own home in no time. Homeownership is integral to building a stable financial future, and the PHFA Loan makes that dream possible for many individuals and families.

PHFA Sellers Guide

Recommended Reading
PHFA: Keystone Forgivable in Ten Years Loan Program (K-fit)
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Use the Extra Payment Calculator for a Mortgage to Save Money
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