The Keystone Government Loan Program (also called K-Gov) is based on FHA, VA (Veteran) or USDA financing; and unlike the Keystone Home Loan program, there are:
- No sales price limitations
- No income limitations
- No first-time home buyer requirements
Eligible home buyers can use the Keystone Advantage Assistance Loan Program with the Keystone Government Loan Program. The assistance program is a 2nd mortgage up to $6,000 for down payment or closing cost assistance.
The PHFA Keystone Government Loan Program is different from the Keystone Home Loan Program because this program is not limited to Pennsylvania first-time home buyers.
Non-occupying co-borrowers (i.e. co-signers) are permitted with the Keystone Government Loan (FHA) provided the co-borrower and applicant meet the PHFA underwriting guidelines (rules).
| LOAN PROGRAM | The good news | The bad news |
|---|---|---|
| FHA Home Loan (Federal Housing Administration) |
The FHA loan is a government backed home loan program that offers a low down payment of 3.5%, no first-time home buyer requirement, and the seller is permitted (not required) to pay up to 6% of the sales price toward closing, escrow and prepaid costs. | There are maximum mortgage amounts with a FHA mortgage.
There is monthly mortgage insurance (MIP), even if you make a down payment of 20%. FHA funding fee. |
| Veteran Loan (VA) | VA home loans do not require a down payment requirement - "0".
The seller is permitted (not required) to pay all closing costs. No monthly mortgage insurance premium (MIP/PMI) |
All vets must pay a funding fee (except disabled vets). Read more |
| USDA Loan (United States Department of Agriculture) |
The USDA home loan is another government backed home loan program. The USDA mortgage is a zero down mortgage. Monthly mortgage insurance premium (PMI) is required.
The seller is permitted (not required) to pay up to 6% (and possibly more) of the sales price toward the buyer's closing costs. |
The home must be located in a USDA defined "rural" area. Read more |