# PHFA Loans in the Lehigh Valley: What to Know By brandon matyas (@brandonmatyas) · Published 2026-10-15 Canonical: https://voce.com/@brandonmatyas/phfa-loans-lehigh-valley-know-7k63xs --- If the down payment has been the one thing standing between you and a home in the Lehigh Valley, the Pennsylvania Housing Finance Agency, or PHFA, may have a program built for you. I'm Brandon Matyas, an assistant branch manager and loan officer (NMLS #350671) with CrossCountry Mortgage in Bethlehem, and I talk with local buyers every week who didn't realize state help was on the table. PHFA pairs an affordable first mortgage with down payment and closing cost assistance — some of it forgivable — so qualified buyers can get into a home without draining their savings. These programs are powerful, but they're not one-size-fits-all. Eligibility depends on income, purchase price, credit and where you're buying, and every program has its own rules. Let's walk through the main ones and how they fit buyers in the Lehigh Valley. #### Key Takeaways - PHFA pairs a first mortgage with down payment and closing cost assistance through approved lenders like CrossCountry Mortgage. - K-FIT offers up to 5% of the purchase price as a forgivable second mortgage, forgiven 10% each year over 10 years. - Some assistance, like the PHFA Grant, never has to be repaid; other programs are deferred or forgiven over time. - You apply through a participating lender, not PHFA directly, and most programs require a homebuyer education course. ## What is the Pennsylvania Housing Finance Agency? The Pennsylvania Housing Finance Agency is a state agency created to expand access to affordable homeownership for Pennsylvania residents. Since 1972 it has helped more than 150,000 families purchase homes by providing mortgage financing, down payment assistance and homebuyer education resources, according to [First Heritage Mortgage](https://fhmtg.com/blog/how-to-buy-a-home-in-pennsylvania-with-a-phfa-loan). It's not a lender you apply to directly. You work through an approved participating lender, like us at CrossCountry Mortgage, who underwrites the loan and layers the assistance in. PHFA's core job is pairing a first mortgage with down payment and closing cost support. It offers a family of programs you can combine, including the Keystone Home Loan, the HFA Preferred conventional loan and a set of assistance options. Most first-time buyers use one of the first mortgages with an assistance program stacked on top. One thing worth knowing: PHFA limits target first-time homebuyers and low- to moderate-income households, but eligibility stretches further than many people assume. Some programs don't require first-time status at all, and income and purchase price caps vary by county — with the Lehigh Valley sitting on the higher end of the scale than more rural parts of Pennsylvania. ## Popular down payment assistance options in Bethlehem Down payment assistance, or DPA, is financial support that bridges the gap between what you've saved and what you need to buy, often arriving as a grant, a forgivable loan or a deferred loan you repay when you sell or refinance, as [CrossCountry Mortgage](https://crosscountrymortgage.com/mortgage/resources/dpa-programs-what-they-are-and-how-they-can-help-you) explains. Here are the assistance programs PHFA buyers in the Lehigh Valley most often use. ![A welcoming suburban home with a clean driveway](https://images.unsplash.com/photo-1787094473734-4ecf0bbb62dd?crop=entropy&cs=tinysrgb&fit=crop&fm=jpg&ixid=M3w5Mzk0NDN8MHwxfHNlYXJjaHwzfHx3ZWxjb21pbmclMjBzdWJ1cmJhbiUyMGhvbWUlMjBleHRlcmlvcnxlbnwwfDB8fHwxNzkxODQxMTI5fDA&ixlib=rb-4.1.0&q=80&w=1200&h=630) ### K-FIT (Keystone Forgivable in Ten Years) K-FIT is the assistance program buyers ask about most. It provides up to 5% of the lesser of the purchase price or appraised value as a forgivable second mortgage, according to PHFA's [program overview](https://www.phfa.org/forms/overviews/first_mortgage_programs_overview.pdf). The loan is forgiven at a rate of 10% each year over ten years, so if you stay in the home for the full forgiveness period, you owe nothing on it. On a starter home in the Lehigh Valley, that 5% often works out to meaningful help with the down payment and closing costs. K-FIT pairs with PHFA's Keystone Home Loan or K-Flex programs, and it generally requires a minimum credit score and a completed homebuyer education course. You can use the assistance toward the down payment, closing costs or both. ### Keystone Advantage Assistance Keystone Advantage is another PHFA second mortgage that helps cover down payment and closing costs, offered alongside PHFA's first mortgage programs. For buyers who prefer to preserve their savings for reserves instead of paying cash upfront, it's still a useful tool. ### The PHFA Grant and K-DATE The PHFA Grant offers a flat amount toward down payment and closing costs for buyers using the HFA Preferred loan, and it never has to be repaid. Newer on the scene is K-DATE, a deferred assistance loan with 0% interest and no monthly payment that stays deferred up to 30 years until you sell, refinance or pay off the first mortgage, as PHFA outlines in its [home purchase loan programs](https://www.phfa.org/programs/homepurchase.aspx). ### Access programs PHFA also runs Access programs for buyers with a disability or a household member with a disability. These can combine a no-interest loan for down payment and closing costs with financing for accessibility modifications like ramps or grab bars, so a home works for the whole family. ## How do I know if I qualify? Qualification comes down to four main pieces: your first-time buyer status, your income, the purchase price and homebuyer education. PHFA uses the federal definition of a first-time buyer, which means you haven't owned a principal residence in the past three years. Veterans are exempt from that rule, and so are buyers purchasing in designated target areas, which cover parts of Allentown and other Pennsylvania communities. Income and purchase price limits vary by county and household size, and they run higher in the Lehigh Valley than in rural parts of the state. Some programs, like Keystone Flex, use income limits that differ from the flagship Keystone Home Loan, so eligibility for one program doesn't guarantee eligibility for another. Almost every assistance program requires homebuyer education. PHFA offers an online course alongside a network of approved in-person counselors across the state, and the class is a required step before closing for buyers using K-FIT or Keystone Advantage. PHFA also maintains credit score minimums that vary by loan type, so it's worth checking your specific situation before you start. Because you apply through a participating lender rather than PHFA directly, the smart first move is a pre-qualification conversation. At CrossCountry Mortgage, we can review your income, household size, credit and target county against the current PHFA tables, then tell you which program is the best fit before you ever make an offer on a home. ## What should I know before applying? Timing and preparation make the difference with PHFA. Because you need a participating lender, a completed homebuyer education course and current income and credit review, it's best to start before you're ready to make an offer. Getting pre-qualified early means your offer looks clean to sellers and your closing isn't delayed by last-minute paperwork. Keep in mind that PHFA assistance isn't free money for everyone. Some programs, like K-FIT, forgive the loan over time, but you generally must stay in the home for the full forgiveness period to have the balance wiped out. If you sell or refinance early, a portion of the assistance may come due. That's not a reason to avoid the programs — it's a reason to understand the terms before you sign. Funds can also be limited and available on a first-come, first-served basis, so working with a lender who knows the programs matters. A good loan officer will walk you through which program fits your goals, your timeline and your budget — not push the one that's easiest for them to close. ## The bottom line PHFA down payment assistance is one of the strongest tools available to home buyers in the Lehigh Valley. Whether you're a first-time buyer stretching toward your first home, a Veteran returning to homeownership or someone earning more than you think qualifies, there's a good chance a program fits your situation. The key is to talk to a local lender who knows PHFA inside and out and can show you what's actually possible for you. If you're buying in the Lehigh Valley and want to know whether PHFA makes sense for you, I'm happy to help you sort through your options. Ready to see what's possible? Reach out and we'll check your eligibility for PHFA programs together. #### Ready to see what's possible? Reach out and we'll review your income, credit and target county against the current PHFA tables together. [Check your eligibility](https://crosscountrymortgage.com/bethlehem-pa-3145/brandon-matyas/?utm_source=voce.com&utm_medium=referral&utm_campaign=voce_lo_pilot_2026) _All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. CrossCountry Mortgage, LLC (“CrossCountry”) does not guarantee the quality, accuracy, completeness, or timeliness of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by CrossCountry. CrossCountry its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort, or other tortious action._ _Equal Housing Opportunity. All loans subject to underwriting approval. Certain restrictions apply. Call for details. All borrowers must meet minimum credit score, loan-to-value, debt-to-income, and other requirements to qualify for any mortgage program. CrossCountry Mortgage, LLC NMLS3029 (www.nmlsconsumeraccess.org)._