Lehigh County First-Time Homebuyer Assistance: Programs and Eligibility

Overview

Lehigh County, PA does not run a single countywide grant like some neighboring counties, but first-time buyers have strong options: statewide Pennsylvania Housing Finance Agency (PHFA) programs, city-level assistance in Bethlehem and Allentown, and federal loan programs with low down payments.

PHFA statewide programs

PHFA works through approved lenders and offers several assistance products that Lehigh County buyers can use:

• Keystone Forgivable in Ten Years (K-FIT): up to 5% of the purchase price for down payment and closing costs, forgiven at 10% per year over 10 years — no monthly payments on the second mortgage.
• Keystone Advantage Assistance Loan: up to 4% of the purchase price or $6,000 (whichever is less), repaid over 10 years at 0% interest. Requires a minimum 660 credit score.
• PHFA Grant: $500 toward down payment and closing costs with the HFA Preferred (Lo MI) loan — no repayment required.

Bethlehem Homebuyer Assistance Program (BHAP)

Buyers purchasing in the City of Bethlehem (which spans Lehigh and Northampton Counties) may qualify for BHAP, run with Community Action Lehigh Valley:

• Finances up to 10% of the purchase price plus closing costs as a deferred-payment loan with no monthly payment, forgiven over 10 years
• First-time buyer = no home ownership in the past 3 years
• Household income at or below 80% of median income
• Buyer contributes $1,000 plus a $275 counseling fee with a HUD-certified counselor
• Property value cannot exceed 95% of the HUD median sale price for the county

Federal loan options

FHA (3.5% down), VA (0% down for eligible veterans), and USDA (0% down in eligible rural areas) loans can all be combined with assistance programs, subject to lender and program rules.

How to start

1. Talk to a PHFA-approved homebuyer counselor — required for some programs and genuinely helpful for planning.
2. Get pre-approved with a lender experienced in PHFA and local assistance layering.
3. If buying in Bethlehem, contact Bethlehem RDA at 610-865-7055 about BHAP.

Program terms change and funding can be limited. Verify current details with PHFA and the City of Bethlehem. This article is for general information and is not a commitment to lend.