Everything you need to make homeownership more affordable.
Buying a home is about much more than the interest rate. Explore the programs, financing options, and strategies that can help make homeownership fit your budget.
Section 1 · Down Payment Assistance
You may need less to get in the door than you think.
Down payment assistance (DPA) is money that helps cover the down payment and, in some cases, closing costs on a home. It's offered through state agencies, counties, cities, and nonprofits — and it exists specifically to help everyday buyers become homeowners.
Type
Grants
Money that never has to be repaid. Rare, competitive, and often first-come, first-served.
Type
Forgivable Loans
A second lien that is forgiven over time — often after 5 or 10 years of living in the home.
Type
Repayable Assistance
A small second mortgage with its own payment, typically at a low fixed rate over a long term.
Who may qualify
Most Pennsylvania DPA programs are designed for first-time buyers, but the definition of "first-time" is generous — usually anyone who hasn't owned a home in the last three years. Some programs are open to repeat buyers in targeted areas.
Eligibility depends on a lot more than credit score. Income limits, the property's location, the loan program you're using, your debt-to-income ratio, funding availability, and underwriting requirements all matter.
Common myths: DPA is not "free money with strings attached forever," it doesn't automatically raise your rate, and it isn't only for people with very low income.
Section 2 · Low Down Payment Loans
A side-by-side look at your main options.
These are the three loan programs most Pennsylvania buyers actually use. Each one has a place — the right choice depends on your credit, savings, and long-term plans.
Conventional
5%
Conventional Loan
min. down payment
- Best for
- Buyers with steady income and reasonable credit
- Typical credit profile
- Typically 620+ (best pricing at 720+)
- Advantages
- Flexible property types — primary, second home, or investment
- PMI can be removed once you reach 20% equity
- Wide range of fixed and adjustable terms
- Things to consider
- PMI required with less than 20% down
- Stricter debt-to-income guidelines than FHA
While some Conventional programs offer 3% down, those are designed for a small group of borrowers who meet specific income and eligibility requirements. Because relatively few buyers qualify for those niche programs, we focus on the standard 5% down Conventional loan — the one most homebuyers actually use.
Read: Conventional Loan explainedFHA
3.5%
FHA Loan
min. down payment
- Best for
- First-time and repeat buyers with flexible credit needs
- Typical credit profile
- 580+ for 3.5% down (500–579 requires 10% down)
- Advantages
- Flexible credit and DTI guidelines
- Gift funds allowed for the full down payment
- Available to first-time and repeat buyers alike
- Things to consider
- Mortgage insurance is required — upfront and monthly
- Property must meet FHA condition standards
VA
0%
VA Loan
min. down payment
- Best for
- Eligible Veterans, active-duty military, and qualifying surviving spouses
- Typical credit profile
- Flexible — most lenders start around 580–620
- Advantages
- No monthly mortgage insurance
- One of the strongest loan programs available
- Reusable benefit across a lifetime
- Things to consider
- VA funding fee applies (can be financed; some Veterans are exempt)
- Property must meet VA condition requirements
Section 3 · Monthly Payment Calculator
See the whole picture, not just principal and interest.
Adjust the fields to model a real scenario. This is a good starting point — a real Loan Estimate will follow after we talk.
Estimated Monthly Payment
$2,469
Payment breakdown
- Principal & Interest$2,003
- Property Taxes (est.)$350
- Homeowners Insurance (est.)$117
- HOA Dues$0
Estimated cash to close
$26,000
Down payment + closing costs − seller assist. Actual figures depend on program, rate, taxes, and prepaids.
Section 4 · Seller Assist
A powerful tool for keeping cash in your pocket.
A seller assist (also called seller concessions) is when the seller agrees to pay a portion of your closing costs. It doesn't come out of your pocket — it comes out of the seller's proceeds — and it can dramatically reduce the cash you need at the table.
A real-world example
You're buying a home for $325,000 and your closing costs and prepaids total about $9,750. Instead of writing a check for that amount, you offer $330,000 with a $5,000 seller assist. The seller nets roughly the same, and your cash to close drops by $5,000.
Seller assist is commonly negotiated on homes that have sat on the market a little longer, on new construction as part of a builder incentive, and in any market where sellers are motivated to close.
Maximum seller concessions
| Loan type | Max concession |
|---|---|
| Conventional (owner-occupied, <10% down) | 3% |
| Conventional (owner-occupied, 10–24.99% down) | 6% |
| Conventional (owner-occupied, 25%+ down) | 9% |
| Conventional (investment property) | 2% |
| FHA | 6% |
| VA | 4% (concessions) + reasonable closing costs |
Section 5 · Rate Buydowns
Lower payments today, without waiting for the market.
A rate buydown uses upfront money — from you, the seller, or the builder — to reduce your interest rate. Some buydowns are temporary (they wear off after a few years) and some are permanent. Both can make a home more affordable in the right situation.
| Type | How it works | Duration |
|---|---|---|
| 2-1 Buydown | Rate reduced 2% year 1, 1% year 2, note rate year 3+ | Temporary |
| 3-2-1 Buydown | Rate reduced 3/2/1% for the first three years | Temporary |
| 1-0 Buydown | Rate reduced 1% year 1, note rate year 2+ | Temporary |
| Permanent Buydown (points) | Pay discount points to permanently lower the rate | Permanent |
| Builder-Paid Buydown | Builder funds a temporary buydown as an incentive | Temporary |
| Seller-Paid Buydown | Seller funds a buydown via concessions | Temporary or permanent |
When temporary buydowns make sense
You expect income to rise, you're planning to refinance if rates drop, or a seller/builder is offering to fund the buydown at no cost to you.
When permanent buydowns make sense
You plan to stay in the home long enough to recoup the upfront cost, and you'd rather lower your rate for the life of the loan than reduce it for only a few years.
Section 6 · Closing Costs
Where your money actually goes at the table.
Closing costs are the fees and prepaids required to fund your loan and transfer the property. On a typical Pennsylvania purchase, they run 2–4% of the sale price — and every line item shows up on your Closing Disclosure three days before you sign.
Lender Fees
Origination, underwriting, and processing costs charged by the lender.
Title Fees
Title search, title insurance, and settlement/closing services.
Recording Fees
Charged by the county to record the deed and mortgage.
Appraisal
An independent appraisal to confirm the home's value (typically $550–$750).
Home Inspection
Optional but strongly recommended — paid directly to the inspector.
Escrows
Reserves set aside so your lender can pay future tax and insurance bills.
Prepaid Taxes
Property taxes prepaid at closing based on your closing date.
Prepaid Insurance
First year of homeowners insurance, paid up front.
Example Closing Disclosure — $325,000 purchase, 5% down
- Origination & Underwriting$1,795
- Appraisal$650
- Credit Report$85
- Title Insurance & Settlement$2,850
- Recording Fees$225
- Prepaid Homeowners Insurance$1,400
- Prepaid Interest$425
- Tax & Insurance Escrow$2,320
Illustrative only. Actual figures depend on program, county, taxes, and closing date.
Section 7 · Rent vs. Buy
The math over seven years usually surprises people.
Renting is flexibility. Buying is building equity — every month, part of your payment goes toward what you own, not what you owe. Here's a quick way to see the difference in your own numbers.
Assumes 3.5% annual appreciation, 7-year horizon. Simplified — excludes maintenance, tax benefits, and investment of the down payment.
Monthly Rent
$1,850
Monthly Mortgage (PITI est.)
$2,469
Total Rent Paid (7 yrs)
$155,400
Est. Home Equity (7 yrs)
$133,184
Building Equity
Every mortgage payment includes principal — money you get back.
Appreciation
Historically, Pennsylvania real estate has grown in value over time.
Tax Benefits
Mortgage interest and property taxes may be deductible.
Long-Term Wealth
For most Americans, home equity is their largest asset at retirement.
Section 8 · Mortgage Insurance & Funding Fees
What it is, what it costs, and when it goes away.
Conventional (PMI)
Private Mortgage Insurance
Generally required when you put less than 20% down on a conventional loan. PMI may typically be removed once you've built enough equity in the home — either through payments or appreciation.
FHA
FHA Mortgage Insurance
- Upfront (UFMIP): 1.75% of the base loan amount.
- Annual: 0.55% for most 30-year FHA loans with less than 5% down — paid monthly as part of your mortgage payment.
FHA mortgage insurance is what allows FHA to accept lower down payments and more flexible credit than conventional financing.
VA
VA Funding Fee
- First-time VA use: 2.15% with no down payment.
- Subsequent VA use: 3.30% with no down payment.
The funding fee helps keep VA lending available for future Veterans. Many Veterans are exempt due to service-connected disabilities or other qualifying reasons. The fee can usually be financed into the loan.
Section 9 · Credit Score Guide
Your score is a lever, not a verdict.
Credit affects the rate you're offered, the mortgage insurance you pay, and the programs available to you. The good news: it's the most fixable part of your file.
Credit ranges
- 760+Excellent — access to the best pricing and terms
- 720–759Very good — competitive rates on nearly every program
- 680–719Good — well within range for most loan programs
- 640–679Fair — qualifies for FHA, VA, and most DPA programs
- 580–639Building — FHA still possible with 3.5% down at 580+
Simple ways to improve
- Pay every bill on time — payment history is 35% of your score
- Keep credit card balances below 30% of the limit (below 10% is even better)
- Don't close old accounts — length of history matters
- Space out new credit applications while you're preparing to buy
- Pull your own reports at annualcreditreport.com and dispute errors early
Timeline: small improvements often show up in 30–60 days. Bigger repair work is realistic in 3–6 months with a plan.
Section 10 · How Much Home Can I Afford?
The number the calculator gives you is only the ceiling.
Underwriting decides what you can qualify for. Your budget decides what you should. Both matter — and we'll help you find the number that fits your life.
Debt-to-Income Ratio (DTI)
Your total monthly debts as a percentage of pre-tax income. Most programs target 43–50%.
Income
Base pay, overtime, bonus, self-employment, retirement, and other stable sources.
Assets
What you have for the down payment, closing costs, and reserves after closing.
Credit History
Beyond the score — patterns, recent activity, and how debt is managed.
Employment
Stability and continuity in your line of work, not just at one employer.
Comfort Level
The most important one. The right monthly payment leaves room to live your life.
Interactive affordability calculator coming soon — in the meantime, the payment calculator above lets you back into a target price from a comfortable payment.
Section 11 · First-Time Homebuyer Guide
The whole process, from first call to keys in hand.
- I
Conversation
A short call to understand goals, timeline, and the payment that actually fits your life.
- II
Pre-Approval
Documents in, credit reviewed, file underwritten before you write an offer.
- III
Realtor
We introduce you to trusted agents in your area — or work happily with the one you already have.
- IV
Offer
Structure the offer, seller assist, contingencies, and closing date to protect you.
- V
Inspection
You hire the inspector. We help you interpret the report and negotiate if needed.
- VI
Appraisal
Ordered by the lender to confirm value. We manage the timeline so nothing slips.
- VII
Closing
Sign, fund, and get the keys — typically 21–30 days from a complete application.
- VIII
Moving Day
You unpack. We stay in touch for anything that comes up long after closing.
Section 12 · New Construction Savings
Building or buying new? The savings are often bigger than the sticker.
Builder communities and custom construction each have their own affordability levers. Understanding them before you sign is where the real money is made.
Builder Incentives
Design credits, appliance packages, and closing cost help — often meaningful money.
Preferred Lender Incentives
Builders frequently add extra concessions when you use one of their preferred lenders.
Interest Rate Locks
Extended locks (90–180+ days) protect you while the home is being built.
Forward Commitments
Builder-purchased below-market rate pools you may be able to tap into.
Closing Cost Assistance
Builder-paid closing costs, often tied to the preferred lender program.
One-Time Close Construction
One loan that covers construction and rolls into a permanent mortgage.
Construction-to-Permanent
Interest-only during the build, one closing, one set of costs.
Section 13 · Pennsylvania Homebuyer Programs
The state's best-kept secrets — clearly explained.
Pennsylvania has some of the most generous first-time and moderate-income buyer programs in the country. Here are the ones we work with most often.
Program
PHFA
The Pennsylvania Housing Finance Agency is the state's mortgage agency. It funds first-mortgage programs, down payment assistance, and homebuyer education — all designed for Pennsylvania residents.
Program
Keystone Home Loan Program
A first-mortgage program for eligible first-time buyers (or buyers in targeted areas) with income and purchase price limits by county. Available as conventional, FHA, VA, or RD financing through PHFA.
Program
Keystone Government Loan Program
PHFA's FHA and VA first-mortgage option — open to first-time and repeat buyers, with fewer restrictions than Keystone Home Loan.
Program
Keystone Forgivable in Ten Years (K-FIT)
A second-lien down payment and closing cost assistance program that is forgiven at 10% per year over ten years. Pair with a PHFA first mortgage.
Program
HFA Preferred™
A conventional loan with reduced mortgage insurance for eligible PHFA borrowers — often more affordable monthly than standard conventional or FHA.
Program
Local & County Programs
Many Pennsylvania counties and municipalities offer their own DPA or closing cost programs. We keep an eye on what's actually funded and available.
Section 14 · Frequently Asked Questions
Real answers to the questions we hear every week.
Pull up a chair
Let's build a home financing plan that fits your budget.
Every homebuyer's situation is unique. Whether you're purchasing your first home, moving into your next home, building a custom home, or investing in real estate, we'll help you explore financing options that fit your goals — not pressure you into a loan that doesn't.
Educational disclaimer. This page is intended for educational purposes only. Loan eligibility, rates, terms, and program availability vary based on each borrower's individual financial situation and current lending guidelines. For personalized guidance, please contact the Corie Adams Lending Team at Network Funding.