Buying your first home in Lancaster County can feel out of reach when down payment and closing costs stack up. You are not alone. Many buyers here use a mix of trusted programs to reduce upfront cash, ease credit requirements, and open more options. This guide breaks down what is available, how the programs work, and the steps to tap into them with confidence. Let’s dive in.
First-time buyer basics
Most programs consider you a first-time buyer if you have not owned and lived in a home in the last three years. Some programs open eligibility to certain groups or specific neighborhoods. Always confirm the definition for the exact program you plan to use.
Expect income and purchase price limits on many assistance options. Limits change often and adjust for your household size. Before you set your budget, verify current figures with state and local program administrators so you shop with realistic numbers.
Many programs require that the home will be your primary residence. Condos and townhomes can be eligible if they meet the mortgage program’s approval standards. If you are eyeing a fixer, renovation-friendly loan options may apply.
Program options in Lancaster County
PHFA mortgages and assistance
The Pennsylvania Housing Finance Agency (PHFA) offers mortgage products that are popular with Lancaster County buyers and often pairs them with down payment and closing cost assistance. PHFA programs may include education requirements and program-specific credit standards. Start by reviewing the options on the PHFA website and by speaking with a lender who regularly originates PHFA loans.
Local city and county help
The City of Lancaster and the Lancaster County housing or redevelopment authorities may administer down payment or closing cost assistance funded by federal programs like HOME or CDBG. These funds are limited, can open and close throughout the year, and often require early reservation. Contact the City’s Office of Housing and Community Development and the county housing authority to confirm availability, eligibility, and timelines before you write an offer.
Federal loan programs
- FHA-insured loans can reduce down payment and provide flexible underwriting. Learn more about program basics through HUD.
- VA-guaranteed loans help eligible veterans and service members with low or no down payment options. Explore benefits at the VA.
- USDA Rural Development offers 100 percent financing for eligible buyers in qualifying rural areas. Some parts of Lancaster County meet these geographic rules. Check program details with USDA Rural Development.
Conventional low-down-payment options
Buyers with moderate incomes may benefit from conventional products designed for first-time buyers. Look into Fannie Mae HomeReady and Freddie Mac Home Possible. These programs can allow low down payments and may work with certain types of subordinate assistance.
Renovation and specialized programs
If the home needs updates or repairs, renovation loans like FHA 203(k) or Fannie Mae HomeStyle can bundle improvement costs into the mortgage. Some buyers can also access employer-assisted housing or niche programs for specific occupations. Ask your lender which options fit your situation and whether they can be combined with a PHFA mortgage or local assistance.
How the programs work
Income and price caps
Most assistance is tied to Area Median Income and includes purchase price caps. Limits vary by program and change regularly. Before you lock in a search price, review current caps with PHFA and any local program administrator.
Credit, underwriting, and lenders
Minimum credit scores and underwriting rules differ by mortgage type. FHA is often more flexible, while conventional products may expect stronger credit. PHFA programs can have their own standards. Not all lenders participate in every program, so you should interview lenders about their experience with PHFA, FHA, VA, USDA, and local assistance.
Counseling and education
Many down payment assistance programs require you to complete homebuyer education with a HUD-approved agency. This helps you understand budgeting, mortgage terms, and long-term costs. You can find approved providers through HUD.
Property eligibility and layering help
Programs must be compatible with your property type and with each other. For example, FHA has specific rules for down payment assistance, and conventional loans have guidelines for subordinate liens. Condos need to meet approval standards. Your lender will confirm which combinations are allowed.
Step-by-step: how to apply
- Get organized
- Gather pay stubs, W-2s, bank statements, and ID. Check your credit and fix small issues early.
- Talk to lenders and get preapproved
- Choose lenders experienced with PHFA and first-time buyer products. Ask which down payment assistance programs they work with.
- Identify assistance you can use
- Explore PHFA options, contact city and county housing offices about any active local grants or second mortgages, and confirm income and price limits.
- Complete required education
- If your program requires it, register for a HUD-approved counseling course before you go under contract.
- Shop with timelines in mind
- Some assistance requires a funding reservation or extra documentation. Make sure your offer timeline fits the program’s process.
- Apply for the mortgage and assistance
- Your lender coordinates the mortgage, and you complete any separate applications for down payment help.
- Underwriting and closing
- Assistance may appear as a forgivable grant or a deferred second mortgage in your closing package. Review any repayment or resale restrictions.
- Stay in compliance after closing
- If the assistance is forgivable based on how long you live in the home, keep records and follow occupancy rules.
Tips and pitfalls to avoid
- Plan for funding windows
- Local grants can run out or pause. Start early and reserve funds when possible.
- Understand strings attached
- Some assistance is forgivable over time while other aid is due when you sell or refinance. Know the terms.
- Choose the right lender
- Pick a lender that actively works with PHFA and your target assistance. Experience matters for smooth timing.
- Match the property to the program
- Property condition, condo approval, and appraisal issues can affect eligibility. Consider renovation loans for homes that need work.
- Keep expectations flexible
- Income limits, purchase price caps, and program names can change. Verify before you rely on any number.
- Avoid predatory offers
- Be wary of anyone charging upfront fees for “guaranteed” grants. Use HUD counselors and official agencies.
Where to verify details
- Statewide mortgage and assistance
- Review current products, income limits, and participating lenders at the PHFA website.
- Homebuyer education and FHA basics
- Find HUD-approved counseling agencies and program guidance at HUD.
- Rural eligibility and 100 percent financing
- Check program information at USDA Rural Development.
- Veterans and service members
- Learn about VA loan benefits at the VA.
- Conventional first-time buyer products
- Explore Fannie Mae HomeReady and Freddie Mac Home Possible.
- Local offices
- Contact the City of Lancaster Office of Housing and Community Development and the Lancaster County housing or redevelopment authority for current local assistance offerings and deadlines.
How a local agent helps
A strong local agent coordinates your financing plan with your property goals. In Lancaster County, that also means understanding which townships or boroughs may fit USDA rules, which condos are more likely to meet approval standards, and how to structure offers so assistance timelines do not derail closing. When a home needs repairs, construction-savvy guidance helps you weigh renovation loans versus asking for repairs or credits.
An agent who works often with PHFA-participating lenders and HUD-approved counselors can help you line up the right team, flag potential issues early, and keep your purchase on track. If you are relocating, your agent can coordinate virtual tours, local inspections, and closing steps while you complete counseling and paperwork remotely.
Ready to map out your path to homeownership in Lancaster County? Connect with Rachel Stoltzfus for a practical plan that fits your budget, your timeline, and the programs you qualify for.
FAQs
What first-time buyer programs exist in Lancaster County?
- You can combine PHFA mortgages with down payment assistance, plus FHA, VA, USDA, and conventional low-down-payment options depending on eligibility.
How do I check USDA eligibility in Lancaster County?
- Review program information and rural area guidelines with USDA Rural Development or contact their local office.
Can I combine PHFA with FHA or conventional loans?
- Often yes, but compatibility depends on each program’s rules and your lender’s guidelines for subordinate assistance.
Do I need homebuyer counseling to use assistance?
- Many assistance programs require HUD-approved education; confirm requirements and find providers through HUD.
Are condos and townhomes eligible for assistance?
- They can be if they meet the mortgage program’s condo approval standards and the assistance program allows those property types.
How long does it take to secure down payment assistance?
- Timelines vary by program and funding availability; some require reservations before closing, so start early with your lender and local housing office.
