Pennsylvania Homebuyer Grant & Assistance Programs | Lancaster, PA 2025
Buying a Home in Lancaster PA Just Got More Affordable
If you're dreaming of owning a home in Lancaster but worried about the down payment, you're not alone. Fortunately, there are powerful homebuyer assistance programs that can help you get into a home faster—with less money out of pocket.
Whether you're a first-time homebuyer, veteran, or relocating to Lancaster County, this guide breaks down local, state, and federal programs that could save you thousands.
What Are Homebuyer Assistance Programs?
These programs offer grants, forgivable loans, or down payment assistance to help buyers afford the upfront costs of buying a home. Many are designed specifically for first-time buyers, low-to-moderate income families, or veterans.
PHFA Programs (Statewide for Pennsylvania)
The Pennsylvania Housing Finance Agency (PHFA) offers several excellent statewide programs, including:
Keystone Forgivable in Ten Years Loan (K-FIT)
Up to 5% of the home’s price toward down payment and/or closing costs
Forgiven after 10 years (10% per year)
Must be paired with a PHFA mortgage
PHFA Advantage Grant
$10,000 grant for income-qualified buyers
No repayment required
Must meet more restrictive income limits (80% of Area Median Income)
Homebuyer Education Required
Most PHFA programs require completion of a homebuyer education course from an approved provider.
Explore PHFA Program Options »
PHFA Income & Purchase Price Limits for Lancaster County (2025)
Program Max Income (1–2 people) Max Income (3+ people) Max Purchase Price PHFA (Standard) $108,000 $126,000 $481,176 PHFA (Targeted Area) $129,600 $151,200 $588,104 PHFA Advantage ~$55,000–$78,900 (based on HH size) Varies ~$481,176
PHFA Advantage is capped at 80% of Area Median Income (AMI). For example:
1-person household: $55,250
2-person household: $63,150
3-person household: $71,050
4-person household: $78,900
Use PHFA’s Target Area List to check ZIP codes eligible for higher limits.
VA Home Loan Benefits for Lancaster Veterans
If you're a veteran or active-duty military member, VA loans offer unmatched benefits:
0% down payment
No private mortgage insurance
Competitive interest rates
Funding fee waived for veterans with a service-connected disability (10% or more)
Example: On a $325,000 home, a VA loan could save you over $20,000 in upfront costs compared to a conventional loan.
Lancaster County Local Assistance Programs
Lancaster Housing Opportunity Partnership (LHOP)
Up to $7,000 in down payment or closing cost assistance
Must complete homebuyer education
Income and location restrictions apply
How Seller Assistance Can Reduce Cash to Close
Even with grants, you may still need to cover closing costs. One common strategy is asking the seller to cover part of them—this is known as a seller assist or seller concession.
Seller Assist Limits by Loan Type:
FHA: Up to 6%
VA: Up to 4% plus reasonable closing costs
Conventional: 3–9% depending on your down payment
Important: Asking for seller assist can make your offer less competitive, especially in a multiple-offer situation. Work with your agent to determine if this strategy fits the market conditions and your goals.
How to Qualify
General requirements for most assistance programs:
Use a PHFA-approved mortgage lender
Credit score of 620 or higher (may vary by lender)
Income within the limits outlined above
Must complete a homebuyer education course
Home must be your primary residence
Step-by-Step: How to Apply
Get pre-approved with a PHFA- or VA-approved lender
Complete a required homebuyer education course
Gather key documents (tax returns, W-2s, ID, pay stubs)
Apply for available state or local assistance programs
Work with a knowledgeable local real estate agent to structure your offer
Final Thoughts: Get the Help You Deserve
With the right guidance, you could receive between $5,000 and $20,000+ in homebuyer assistance. Grants and forgivable loans are available right now—but some programs run out of funding mid-year, so timing matters.
Get a Personalized Homebuyer Plan
Want to learn more about the buying process and programs in Lancaster schedule your home buyer appointment today! Let’s walk through your goals, finances, and the best grant options for buying in Lancaster PA.
