Renovation loans already keep the down payment low: 3.5% on an FHA 203k, as little as 3% on HomeStyle, and 0% on a VA renovation loan. For some Philadelphia buyers, down payment assistance can close the rest of the gap.
The Pennsylvania options
PHFA (Pennsylvania Housing Finance Agency) runs the statewide programs. Its Keystone Advantage Assistance Loan provides up to 4% of the purchase price or market value, or $6,000, whichever is less, as a 0% second mortgage repaid over 10 years. It pairs with PHFA's first mortgage programs, and PHFA sets credit, income, and purchase-price limits.
City and nonprofit programs. Philadelphia has offered its own homebuyer assistance over the years, and some programs are funded in rounds. Availability changes, so check current status before you plan around one.
Employer and grant programs. Some employers, universities, and nonprofits offer homebuyer assistance to staff or residents of specific neighborhoods.
Questions to ask before combining assistance with a renovation loan
- Does the assistance program allow renovation financing on the first mortgage? Some assistance programs pair only with specific first-mortgage products.
- Is the lender a participating lender? Assistance programs require an approved lender.
- Do the purchase-price or acquisition-cost limits include the renovation? Some programs count the total acquisition cost, which can include rehab.
- What does the timeline look like? Some programs require education courses or approvals that add time. Start early.
- What happens if you sell or refinance? Assistance loans may need to be repaid.
Our take
Don't let assistance drive your house choice. Figure out the right house and the right renovation program first, then see what assistance fits. We'll check your eligibility during your free consultation.
Frequently asked questions
How much is PHFA's Keystone Advantage assistance?
PHFA describes Keystone Advantage as up to 4% of the purchase price or market value, or $6,000, whichever is less, as a 0% second mortgage repaid over 10 years. It pairs with PHFA first mortgages. Check PHFA's site for current terms.
Does every lender offer PHFA programs?
No. The lender must be a PHFA participating lender, and the program has its own credit, income, and property rules. Ask us whether your scenario fits before you shop.