The Keystone Advantage Assistance Loan Program

2-story house with a sold signDo you need help with closing costs when purchasing a home?

If so, the Keystone Advantage Assistance Loan Program offered by the state of Pennsylvania may assist you in purchasing a house.

The program offers a second mortgage loan to assist with a property purchase's down payment and/or closing expenses.

Eligible homebuyers may receive up to 4% of the purchase price (or market value), or $6,000, whichever is greater (whichever is less). The assistance loan is repaid in equal monthly installments over a ten-year period at 0% interest.

Here's an example:

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

Keystone Advantage eligibility requirements

  • Applicants must be approved for one of the PHFA's first mortgage programs and satisfy the following criteria:
  • All borrowers must have a middle credit score of 660 or greater.
  • Only the minimum required down payment and/or closing expenses are eligible for home buyer assistance. There will be no debt reduction or house upgrades.
  • The minimum loan amount is $500.

After subtracting the money required to complete the loan, the borrower's liquid assets cannot exceed $50,000.
Cash and 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Retirement assets, such as 401(k)s, IRAs, and pension funds, will only be considered if they may be withdrawn without penalty owing to the borrower's age and/or retirement status.

FHA, VA, or USDA must be the underlying mortgage.
The Keystone Advantage Assistance Loan Program does not need you to be a first-time home buyer.

The Keystone Advantage Assistance may be used with the following PHFA home purchase financing programs:

HFA Preferred™(no mortgage insurance)

The borrower does not to be a first-time home buyer, and at the time of loan closing, the borrower may hold an interest in another residential property.
The requirements for this program are the same as for a traditional home loan.
Only 3% of the purchase price is required as a deposit.
Although the HFA Preferred program does not need mortgage insurance, it does have a slightly higher interest rate than the HFA Preferred Risk SharingTM program.  Read more

HFA Preferred Risk Sharing™(with mortgage insurance)

The HFA Preferred Risk SharingTM program is similar to the HFA PreferredTM program, except it requires mortgage insurance.  Read more

Keystone Government Loan Program

FHA, VA, or USDA must be the underlying mortgage. This program does not need you to be a first-time home buyer.

Because the down payment is just 3.5 percent and the property seller is permitted to pay a portion of the closing expenses, the FHA loan program is extremely popular. An qualified donor or contributors may "gift" the down payment, closing fees, tax, and insurance.  Read more about the FHA loan

The USDA loan program is available in many areas of Pennsylvania.
There are income and geographic restrictions, but if you satisfy the requirements, the USDA loan does not need a down payment. Although there is a monthly mortgage insurance premium (MIP), but it is lower than the FHA program. 
Read more about the USDA loan

The Keystone Advantage Assistance Loan Program is also compatible with the VA loan program. A down payment is not required for a veteran's home loan, and the Veteran's Administration regulates the fees that may be charged to vets. 
Read more about the VA home-loan

Keystone Home-Loan

Conventional, FHA, VA, and USDA mortgages are all eligible for this program.
Unless the property is in a "designated region," home buyers who participate in this program must be first-time purchasers (and residents of the home).
First-time home buyers are not required to purchase homes in designated regions.
This program is designed for home buyers who have a large down payment.
Read more