Northampton County's First Time Home Buyer Loan

Written by Bill MacDonaldSeptember 14th, 20222 minute read

Northampton County offers home-buying assistance to eligible first-time buyers. The loan program provides closing cost assistance up to a maximum of $5,000 to qualified first-time home buyers. The assistance grant is structured as a subordinated mortgage (2nd-mortgage lien).

The amount of closing assistance is based on the borrower's cash assets and the total cash requirement at settlement. The Mortgage, Promissory Note, and Loan Disclosure Statement documents will be recorded on behalf of the County of Northampton in the amount awarded after closing. The closing cost loan does not require a monthly payment and no interest is charged on the mortgage. For each year you stay in your home, 20% of the loan is forgiven. The loan is completely forgiven if the home buyer stays in the house for at least 5 years.


The house to be purchased can be one to four (4) units and you must occupy the property as your personal residence.

Home buyer loan qualifications

You need to be creditworthy and qualified for a first mortgage at or below the current rate;

First-Time Home Buyer Education

Applicants are required to complete a home-buyer counseling program prior to signing a sales contract. Participants are required to speak to a Counselor for a private counseling session to go over their credit responsibilities, budget, mortgage financing, and home ownership obligations. The counseling program will likely last a few hours.

Borrower's Contribution

The applicant must provide no less than 1.5% of the sales price. The down payment must come from the applicant’s checking, savings, or investment account(s) and must be verified by the mortgage lender.


The buyer’s liquid assets may not exceed the total of 3% purchase price at settlement. Any amount above the 3% must be applied to the purchase of the home. For example, an individual can have 4.5% of the sale price in ready cash, use 1.5% as a down payment, and keep the remaining 3%.

Eligible Mortgage Programs

Conventional, VA, FHA, USDA

Income Limits

The annual household income cannot exceed 80% of the median income for the Lehigh Valley, as determined annually by HUD

Pennsylvania Housing Finance Agency (PHFA)

The Pennsylvania Housing Finance agency provides financing for first and non-first-time home buyers. The interest rate on the 1st mortgages are usually below the market interest rate, and PHFA also provides a down payment/closing cost assistance loan for eligible home buyers.
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