Montgomery County First Time Home Buyer

House with a sold signEligible participants may get closing-cost assistance of up to 8% of the sales price, and if your income is less than 80% of the median income (See income limit table), Montgomery County may contribute an extra 2% toward the down payment, for a total assistance of 10% of the sales price.

The mortgage obligation is reimbursed if the home is sold or transferred within the first eight years. You can refinance your original loan without having to return the loan for closing fees. The size of the loan is decided by the applicant's financial needs.

The best thing is that there is no interest to pay!
The loan is valid for an eight-year term. .

Participants are required to complete a counseling package and meet with a Counselor one-on-one to address budgeting, credit, mortgage financing, and other responsibilities associated with home ownership before being accepted.
The counseling session is expected to last a few hours. Homebuyers who are employed full-time in Montgomery County at the time of application and closing are also eligible for this program.

Program Eligibility

The household must meet certain requirements in order to be eligible for a loan.  . . .
  • At the time of Program application and settlement, you must live and/or work full-time in Montgomery County.
  • You must have good credit and be able to qualify for a mortgage at or below the current market rate.
  • You intend to live in the house as your main home.
  • Have a household income that is less than the Montgomery County median income.
  • You must be a first-time home buyer or have not owned a house in the past three years.

Complete the required counseling program prior to signing any contract of sale for the purchase of a house. You must have a minimum of $3,000.00 in liquid assets at the time of application (must be of your own funds).

Home-Buyer Cash Contribution

A three percent down payment is the bare minimum for a prospective house purchase (3 percent ).

In addition to the 3% down payment, two months' mortgage payments in the bank are required.

Prior to obtaining home-buyer financing, applicants must utilize their own liquid assets, and they may be eligible for a matching gift of up to 3 percent of their total assets.

If the applicant has 10% or more of the purchase price to contribute towards the purchase, assistance is not provided.

The following investments are exempt from the 10% limit:

Roth IRAs, 401Ks, and Iras

The amount of help is determined by the selling price, liquid assets, closing costs, mortgage amount, and other fees paid during the property acquisition.

Maximum Sales Price - The applicant's income, monthly debt, and other factors influence the maximum sales price.

No Seller Assist! - Realtors® and mortgage companies, take note. This program does not allow for seller assistance (paying closing expenses on behalf of the seller).  Learn more about seller assistance.

Home Warranty & Home Inspection - The Department of Housing and Community Development requires a house inspection and a home warranty.
Home inspectors must complete the dwelling quality standards form. This form will be provided to the applicant during the counseling session.

Property Types
Property purchased under the program must:

  • Be acceptable to the property's main lender and insurance.
  • Comply with housing quality requirements, municipal ordinances, and lead-based paint regulations.
  • Have a sales price that does not exceed the program's affordability threshold.
  • Be a single-family home in Montgomery County, either existing or freshly built.

Eligible Mortgage Programs

Conventional loan, FHA loans, USDA loans

This closing-cost assistance program may be utilized in conjunction with a first mortgage from the Pennsylvania Housing Finance Agency.  (PHFA)

Grant Terms

The amount of the grant is decided by the applicant's household's financial need, household assets, and the property's selling price. Participants are eligible for assistance up to a maximum of 10% of the anticipated acceptable sales price.

The interest rate is zero percent (0 percent ).
Repayment only if:

  • Used as a source of income or as an investment.
  • The debt is forgiven after 8 years.
  • Vacated or abandoned as a main home within 8 years of the property's acquisition date.
  • The ownership of a home is transmitted, sold, awarded, or otherwise transferred.

Income Limits:

See income limits chart. Based on the number of people in the home.

Credit counseling & First Time Home Buyer Classes in Montgomery County PA