The county’s own $40,000
The Housing Partnership of Chester County runs the county’s first-time homebuyer program with the Chester County Department of Community Development, using HUD money. It lends up to $40,000 toward the purchase at 0% interest, secured as a second lien behind your mortgage (housingpartnershipcc.com, read August 2026).
Nothing is due monthly and there is no term. The whole amount comes back when the house is sold, when title transfers, or when you refinance. The property has to be in Chester County and has to be your primary residence, and it can be detached, semi-detached, attached or a condominium, existing or newly built. It has to meet HUD housing quality and lead-paint standards and be insurable, which is the same standard the FHA appraiser applies to an older borough house.
Two things the program does not publish: a purchase-price figure, which follows HUD’s HOME program limits and is confirmed at application, and a 2026 funding status. Call 610-518-1522 and ask about both before either one goes into your budget.
The rules that catch people late
Four tests do most of the disqualifying, and none of them is obvious from the outside.
- Down payment capped at 20% of the price, meaning the first mortgage has to be at least 80% of value. A generous gift can push you out of the program.
- At least $1,000 of your own money into the purchase.
- Two months of reserves in hand at settlement.
- No more than $15,000 in liquid assets left after closing.
Income has to sit at or under 80% of the area median, by household size:
| Household | Income limit |
|---|---|
| 1 | $66,850 |
| 2 | $76,400 |
| 3 | $85,950 |
| 4 | $95,500 |
| 5 | $103,150 |
| 6 | $110,800 |
| 7 | $118,450 |
| 8 | $126,100 |
Homebuying seminars are required and run monthly. Applications go by mail or into the lock boxes at the Downingtown office; the office itself works by appointment.
PHFA’s Keystone limits, effective July 1, 2026
The Pennsylvania Housing Finance Agency sets its own ceilings county by county. For reservations on or after July 1, 2026, Chester County’s Keystone Home Loan limits are a purchase price of $588,800 and household income of $122,700 for one or two people, $141,100 for three or more (phfa.org, Appendix A, July 2026).
Hold that price cap against July 2026 sold medians and you can see where it bites. The Coatesville area at $369,450 and the Oxford area at $539,000 sit comfortably under it. Downingtown’s $589,500 sits $700 over, which is the kind of margin that turns on one appraisal. Exton’s $749,995 is well past it, and there the answer is usually Keystone Flex, which carries no first-time buyer rule and runs to a $730,600 price and $212,000 of income statewide.
Keystone Home Loan needs a 660 score for PHFA-insured loans and asks that you have not held title to a principal residence in the past three years. That last rule is waived for a discharged veteran and inside targeted areas; Chester County has one designated targeted census tract, and an address search settles whether a house is in it.
K-FIT, Keystone Advantage and K-DATE
The assistance sits on top of a PHFA first mortgage, and there are three shapes of it (phfa.org, read August 2026).
K-FIT lends 5% of the purchase price or appraised value with no maximum dollar amount, at 0%, forgiven 10% a year over ten years. Minimum score 660. On a $500,000 house that is $25,000, and after ten years in the house none of it comes back.
Keystone Advantage lends the lesser of 4% or $6,000, at 0% over a ten-year term, with liquid assets after closing capped at $50,000. Employees of a participating employer can go to $8,000.
K-DATE lends 8% of price or value on loans of $150,000 or less and 5% above that, at 0% with no monthly payments, due when you sell, refinance or pay off.
Education is required for at least one borrower before closing. Under a 680 score it has to be face to face at a PHFA-approved agency; at 680 and up, an approved agency or PHFA’s online course both work. Finish in-person pre-purchase counseling before you sign the agreement of sale and PHFA credits $300 toward closing costs, which is the rare case where doing the homework early pays a stated amount.
The order the pieces go in
The stack that works most often here is a PHFA first mortgage, K-FIT or Advantage behind it, and the county’s $40,000 behind that. Which of those combinations a given lender actually closes is the lender’s answer to give, and the time to ask for it is before an offer goes in.
Three collisions to watch. The county’s 20% down payment ceiling can conflict with a large gift. Its $15,000 liquid-assets test after closing is tighter than PHFA’s $50,000, so the county rule is the one that governs. And the two counseling requirements are not the same requirement, so confirm that the course you book satisfies both. All of it is subject to lender approval and to program funds being open at the time.