Pennsylvania Home Buyer

HFA Preferred Risk Sharing™ & HFA Preferred™ Loans

The HFA Preferred Risk Sharing™ and HFA Preferred™ loan programs were created by the Federal National Mortgage Association (Fannie Mae) for the housing finance agencies (hence, "HFA"). The HFA mortgages are underwritten to conventional underwriting guidelines, specifically, the My Community Mortgage.

The HFA Preferred Risk Sharing™ and HFA Preferred™ loans only require a minimum three percent down payment. (For example: Sales price $100,000 X 3% = $3,000).

The only difference between the two loans is that the HFA Preferred™ requires mortgage insurance if the home buyer’s down payment is less than 20%.

Monthly mortgage insurance is not required with the HFA Preferred Risk Sharing™ program, however, the interest rate is slightly higher in exchange for no mortgage insurance.

These loans compete with the FHA home loan. The FHA home loan requires a 3.5% down payment; and unlike the FHA loan, there is no up front mortgage insurance premium (aka funding fee).

No first-time homebuyer requirement, however, the borrower may not have an ownership interest in any other residential dwelling at the time of loan closing and must meet HFA income limits.pdf

Prospective home buyers are required to invest a minimum of $1,000 of their own funds. The balance of the down payment and closing costs may come from an approved Community Second, a gift, grant or unsecured loan from a relative, domestic partner, fiancé/fiancée, or from a church, a public agency, a municipality or a nonprofit other than a credit union.

Eligible Properties

  • One unit properties only (i.e. single family home)
  • No duplexes
  • PUDs (Planned urban developments) are acceptable, provided the subject development meets Fannie Mae guidelines
  • No manufactured housing (i.e. mobile homes)
  • No condos

Property must be the primary residence

Non-occupying borrowers are not permitted (aka co-signers)

PHFA Program ComparisonFHAHFA Preferred™Conventional 95%HFA Preferred Risk Sharing™
Purchase Price $120,000 $120,000 $120,000 $120,000
Down payment Requirement $4,200 (-3.5%)$3,600 (-3%)$6,000 (-5%)$3,600 (-3%)
Loan Amount $117,827 (($115,800 base) )$116,400 $114,000 $116,400
Upfront MIP Payment at Closing $2,027 $0 $0 $0
Interest Rate 3.38%3.75%3.63%4.25%
Monthly Mortgage $521 $539 $520 $573
Payment (Principal and Interest)    
Monthly MIP Payment $121 $75 $70 $0
Monthly Mortgage Payment (Principal and Interest and Mortgage insurance) $642 $614 $590 $573
Difference based on FHA, per month (+/-) $0 (-$28)(-$52)(-$69)

Keystone Advantage Assistance Program can be used in conjunction with the HFA Preferred Risk Sharing™ and HFA Preferred™ loans. Eligible home buyers can receive as much as two percent (2 %) of the purchase price or market value, up to a maximum of $4,000 for the down payment and/or closing costs. Read more

How much does it cost to buy a house in Pennsylvania?

Use the PA mortgage calculator to estimate the down payment, closing costs and monthly payment for FHA, VA, USDA & conventional loans.Closing cost calculator

First time home buyer classes listed by county

Learn about Pennsylvania's home buying programs. Read more

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