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PHFA: Keystone Advantage Assistance Loan Program

Unlocking Homeownership: Keystone Advantage Assistance Loan Program

Happy home buyers standing next to a for sale sign with a sold stickerAre you a prospective homebuyer in Pennsylvania searching for financial support on your journey to owning a home? The Keystone Advantage Assistance Loan Program is your gateway to realizing the dream of homeownership, offering robust assistance to first-time homebuyers for down payments and closing costs.

This program goes beyond traditional home loan support, allowing Pennsylvania residents to explore tailored homeownership assistance programs. Whether delving into the Keystone home loan program, investigating PA housing grants, or navigating Pennsylvania housing programs, Keystone Advantage Assistance stands ready with various grants and aid.

From down payment assistance to covering closing costs and adhering to eligibility guidelines, this program empowers residents to turn their homeownership dreams into reality through accessible and personalized financial support.

Keystone Advantage Assistance Loan Program Unveiled

Designed to aid first-time homebuyers in Pennsylvania, the PHFA assistance program introduces various options, including the Keystone Advantage Assistance program. Tailored for qualified homebuyers with a middle FICO score of at least 660, it offers an interest-free loan covering a portion of the down payment requirement (excluding the minimum contribution) and closing fees.

This ten-year amortized loan can be combined with a PHFA mortgage through the Keystone Home Loan, Keystone Government Loan programs, or the HFA Preferred Mortgage Program.

Loan Terms and the Homeownership First Program

The Homeownership First program, a cornerstone of Pennsylvania's first-time homebuyer initiatives, extends financial assistance to low—and moderate-income individuals. This aid may include a mortgage credit certificate, which can potentially reduce the homeowner's mortgage interest.

Qualified homebuyers under this program can receive up to 4% or $6,000 (whichever is less) in financial aid towards down payments and closing fees. An additional $6,000 in grants may be available for those purchasing new, never-inhabited homes.

The program also serves as an educational tool, enlightening first-time homebuyers on home lending products and financial aid programs crucial for turning homeownership dreams into reality. While no prepayment penalty applies to the Advantage loan, it's vital to note the ten-year amortization period.

It's important to highlight that the Advantage program cannot be combined with any other initiative, and funds received must be wholly utilized for down payment and closing fees as outlined by program guidelines. For those seeking financial assistance purchasing a home, the Homeownership First program emerges as a valuable resource.

Illustrating Advantage Assistance

Consider the following example based on the sales price of the home:

Sales Price $50,000 $100,000 $150,000
Assistance 4% X 4% X 4% X 4%
Assistance Loan $2,000 $4,000 $6,000
Monthly Payment $16.67 $33.33 $50.00

Eligibility and Liquid Asset Limitation

To qualify for PHFA's payment assistance programs, homebuyers must meet the criteria of the specific first mortgage program. While being a first-time homebuyer is required for specific first mortgage programs, those exploring PHFA home buying opportunities can inquire about FHA loans and the possibility of a second mortgage loan.

The liquid asset limit is a crucial factor. After accounting for the funds needed to repay the loan, the borrower's liquid assets cannot exceed $50,000. This includes cash, savings, checking accounts, equities, bonds, certificates of deposit, and other liquid assets. Retirement assets from 401(k)s, IRAs, and pension plans may be considered for individuals meeting age requirements, retired, and able to withdraw funds without penalties.

Homebuyer Education Requirements

Before closing, applicants with middle credit scores under 680 must complete a live homebuyer education course or counseling session. Online courses are not permitted for specific debtors. A homebuyer education course or counseling session is mandatory for loans to close, even with midrange credit scores of 680 or above. It is necessary to have just one borrower, and a reputable counseling provider must lead the instruction or counseling session.

Borrowers with a FICO score of 680 or above may also take telephone and online courses. Online courses provided by HomeView® or PHFA are suitable. The buying package must include a copy of the counseling certificate(s).

Quick Recap

  • All borrowers need a middle credit score of 680 or higher.
  • Only the minimum required down payment and closing expenses qualify for homebuyer assistance.
  • No debt reduction or house upgrades are covered.
  • The minimum loan amount is $500.
  • Liquid assets cannot exceed $50,000 after deducting the necessary funds to complete the loan.

Cash, money in checking and savings accounts, stocks, bonds, certificates of deposit, and other liquid accounts fall under this category. Retirement assets, such as 401(k)s, IRAs, and pension funds, will only be considered if they can be withdrawn without penalties based on the borrower's age and retirement status.

Crucially, the Keystone Advantage Assistance Loan Program doesn't restrict eligibility to first-time homebuyers.

In Conclusion

For first-time homebuyers in Pennsylvania, the PHFA mortgage loan program is a beacon of support for home purchases. With its second mortgage offering, the Keystone Advantage Assistance Loan Program provides crucial coverage for payments and closing costs. With the prospect of loan repayment support and a second mortgage, the dream of owning a home in Pennsylvania becomes a tangible reality for many first-time homebuyers.

PHFA Sellers Guide (page 59)

Recommended Reading
PHFA: Keystone Government Loan Program
PHFA: Keystone Home Loan Program
PHFA: Keystone Forgivable in Ten Years Loan Program (K-fit)
PHFA: Keystone Flex Loan Program