Buying your first house is a big step and a big investment. Unlike second or third time buyers, who can usually leverage equity from a previous property purchase into a new home, first time buyers are starting from scratch! You need to come up with a down payment, closing costs, moving costs, and often new furniture and décor to fill out that space – all while paying rent on your current home.
Because of this financial squeeze, there are incentives devised by the government – both the federal government and the city of Philadelphia government – to help first time buyers purchase some property. The government also has a reason, here – they are hoping buyers will be long term residents of Philadelphia and invest in the property and their community, making the city a better place to live!
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The City of Philadelphia’s Office of Housing and Community Development offers a Settlement Assistance Grant, which can be used toward closing costs. This grant offers up to $500, but it is based on income. Individuals may earn up to $45,000 per year to qualify for the grant, while a family of four would qualify with less than $64,250 of income. In order to qualify, you also need to go through homeownership counseling, which is a great way to become educated about the home buying process and what is required of you. You’ll learn how to purchase a home within your means and with the right mortgage, the application and purchase process, money management, and home maintenance, among other things. You will need to contact a Housing Counseling Agency to get started.
The Pennsylvania Housing Finance Agency is a state of Pennsylvania department that offers many programs which can help with you down payment, closing costs or mortgage qualifications if you are a first time home buyer. One such program is the Keystone Home Loan Program. To be eligible, most people need to be first time home buyers. You will need to meet income limits, as well as limits on the amount of your mortgage. A certain credit threshold, funds to pay the mortgage application and closing costs, and a down payment are also required. You may be eligible for down payment assistance through another one of their programs: the Keystone Advantage Assistance Loan. With this program you can qualify for 4% of the purchase price of your home, or between $500 and $6,000, whichever is less. This is a loan program, so it will have to be repaid over a 10 year period, but it is an interest-free loan, making it a better deal than rolling that money into a mortgage, on which you need to pay interest. Qualifications for this program include a minimum credit score and a limit on the amount of liquid assets you have ($50,000). One nice advantage of this program is that it can be used towards any type of mortgage.
Do you have experience taking advantage of any of these financial incentives? Have you found other first time home buyer incentives not mentioned here? Let us know in the comments!
If you are interested in finding out what incentives you may qualify for when you become a first time homebuyer and are taking that step toward finding the perfect home for you, please contact me. Because friends don’t let friends buy a home without Agent Lady!
About Agent Lady: Cherise Wynne is a leading real estate agent in Philadelphia, helping home buyers and sellers navigate the City of Brotherly Love, with a special focus on first time home buyers. To chat about getting started with your first time home buying experience, click here.
