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Keystone Advantage Assistance Loan Program

Nice Pennsylvania houseDo you need closing cost assistance to purchase a home? If so, the State of Pennsylvania can help you buy a home with the Keystone Advantage Assistance Loan Program.

The assistance program provides a second mortgage loan to help with the down payment and/or closing costs associated with the purchase of a home.

Eligible home buyers can receive up to four percent (4%) of the purchase price (or market value) or $6,000 (whichever is less). The assistance loan is repaid monthly over a ten year term at zero percent (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 first mortgage programs below, and meet the following requirements:
  • All borrowers must have a middle credit score of 660 or greater.
  • The home buyer assistance can only be used for the minimum required down payment and/or closing costs. No home improvements or debt reduction.
  • The minimum loan amount is $500.

The borrower(s) liquid assets may not be greater than $50,000 after deducting the funds needed to close on the loan. This includes cash and funds in checking and savings accounts, stocks, bonds, certificates of deposit and similar liquid accounts. Funds from retirement accounts such as 401(k)s, IRAs and pension funds will only be considered if they can be withdrawn without a penalty due to borrower meeting age requirement and/or being retired.

The underlying mortgage must be either FHA, VA, or USDA. There is no first time home buyer requirement with the Keystone Advantage Assistance Loan Program.

The Keystone Advantage Assistance can be used along with the following PHFA first mortgage home purchase loan programs:

HFA Preferred™(no mortgage insurance)

There is no first time homebuyer requirement and the borrower may have an ownership interest in another residential dwelling at the time of loan closing. This program follows the conventional home loan requirements. The down payment is only 3%! The HFA Preferred™ does not require mortgage insurance, however, the interest rate is a little higher than the HFA Preferred Risk Sharing™ program. Read more

HFA Preferred Risk Sharing™(with mortgage insurance)

HFA Preferred Risk Sharing™ program is identical to the HFA Preferred™ program, but mortgage insurance is required with this program. Read more

Keystone Government Loan Program

The underlying mortgage must be either FHA, VA, or USDA. There is no first time home buyer requirement with this program.

The FHA loan program is very popular because the down payment is only 3.5% and the home seller is allowed to pay a percentage of the home buyer's closing costs. The down payment, closing costs and tax and insurance can be "gifted" by an eligible donor or donors. Read more about the FHA loan

Many areas of Pennsylvania qualify for the USDA loan program. There are area and income limits, however, if you meet the guidelines, the USDA loan does not require a down payment. There is a monthly mortgage insurance cost (MIP), however, it's less than the FHA program. Read more about the USDA loan

The VA loan program is also eligible for the Keystone Advantage Assistance Loan Program. The Veteran's home loan does not require a down payment and the Veteran's Administration reign in fees that can be charged to vets. Read more about the VA home loan

Keystone Home loan

This program is based on either conventional, FHA, VA or USDA mortgages. Home buyers who participate in this program must be first time home buyers (and occupants of the home) unless the home is located in a "targeted area". Homes that are located in targeted areas do not require first time home buyers. This program is ideal for the home buyer who has a significant down payment. Read more