Think you need 20 percent down to buy in Abington or around Montgomery County? You don’t. For many buyers, the hardest part is pulling together the upfront cash. The good news is that real, well-structured down payment assistance can lower what you need to bring to closing without putting your purchase at risk.
In this guide, you’ll learn the main types of assistance, how programs in Montgomery, Bucks, and Chester counties typically work, who qualifies, and the exact steps to take next in ZIP 19001 and nearby communities. You’ll also find trusted local resources to help you move forward with confidence. Let’s dive in.
What down payment help looks like
Down payment assistance, or DPA, comes in a few common forms. Each one has different rules for repayment and how it pairs with your mortgage.
- Deferred second mortgage: A zero or low interest loan that sits behind your first mortgage. You usually repay it when you sell, refinance, or pay off the home.
- Forgivable loan or grant: Assistance that is forgiven after you live in the home for a set period, often 3 to 10 years. If you move out or sell early, you may owe a portion back.
- Lump-sum grant: True grants are rare and usually small or targeted. No repayment if you meet the program rules.
- Amortizing second mortgage: A repayable second loan with a monthly payment in addition to your main mortgage.
- Gift funds: Money from family or approved nonprofits. Not a formal program, but often used to help with the down payment.
- Seller concessions and lender credits: These reduce your cash due at closing but usually apply to closing costs, not the down payment. Limits and rules vary by loan type and program, so confirm with your lender.
Most programs require homebuyer education, set income and price limits, and restrict the home to your primary residence. Always check program rules and confirm compatibility with your lender.
Programs in Montgomery, Bucks, and Chester
PHFA statewide options
The Pennsylvania Housing Finance Agency is the main state resource for affordable mortgages and assistance. PHFA bundles mortgages with assistance products that can cover down payment and closing costs, and it works through a network of approved lenders and housing counselors. You can review current offerings and find lenders and counselors on PHFA’s homeownership programs.
County and municipal programs
Montgomery County’s Office of Housing & Community Development manages federal HOME and CDBG funds that can support homeownership assistance in some cases. Municipal programs come and go based on funding and local priorities, and availability can be limited. Start by checking the Montgomery County Office of Housing & Community Development for current county offerings, then review your township or borough site for any local initiatives.
Federal and veteran loan pairings
- FHA: Low down payment loans that often pair well with state or local DPA when program rules allow.
- VA: Many qualified veterans can buy with no down payment. Some assistance may still help with closing costs.
- USDA: Offers zero down in eligible rural areas. Many Abington addresses in 19001 are not USDA eligible, so check the official maps if you are considering areas farther from the urban core.
Lender, employer, and nonprofit options
Some local lenders and credit unions offer their own assistance or employer-assisted housing benefits. Nonprofits, NeighborWorks organizations, and HUD-approved counselors sometimes provide small grants or matching funds and will guide you through the education requirements.
Who qualifies and typical rules
Eligibility varies by program, but most buyers can expect a few common requirements:
- Income limits based on area median income and household size.
- Purchase price caps that align with program goals.
- First-time buyer rules in many programs, often defined as no ownership in the last three years. Some accept repeat buyers within income limits.
- Credit score minimums that vary by lender and loan type.
- Homebuyer education through an approved provider before you close.
- Owner-occupancy and minimum property condition standards.
- Residency or employment preferences for certain local programs.
- Resale restrictions or recapture if assistance is forgivable and you sell before the forgiveness period ends.
Using DPA with your loan
Compatibility matters. A DPA that works with a PHFA mortgage may not be allowed with a different lender product. Your lender must confirm that your assistance source is acceptable for your specific loan and mortgage insurer.
- Conventional loans like Fannie Mae HomeReady or Freddie Mac Home Possible usually allow approved DPA and gift funds, with limits on seller concessions.
- FHA loans are commonly paired with state or local DPA, subject to program and lender approval.
- VA and USDA loans can allow some assistance, but usage is different because of their low or zero down features.
Seller concessions, lender credits, and gifts
It helps to understand how each source affects your cash to close:
- Seller concessions: The seller pays some of your allowable closing costs. These do not count toward your down payment, and limits vary by loan.
- Lender credits: The lender covers part of your closing costs in exchange for a slightly higher interest rate. They typically cannot be used for the down payment itself.
- Gift funds: Family or approved nonprofits can gift funds. You will need a gift letter and proper documentation.
The right mix can lower your total cash need while keeping your financing within program rules.
Step-by-step for Abington buyers
Follow this simple path to put assistance to work for you.
- Complete homebuyer education. Many programs require it. Use HUD’s housing counseling resources or PHFA’s counseling lists to enroll early.
- Identify programs that fit. Review PHFA’s offerings, check county options through the Montgomery County Office of Housing & Community Development, and look at municipal pages where you plan to buy.
- Choose a lender early. Work with a lender experienced with PHFA and local assistance. Ask them to confirm which DPA sources they allow with your loan type.
- Get preapproved. Your preapproval sets your price range and shows how much assistance you may need.
- Apply for DPA with your mortgage. Timing matters. Some programs reserve funds during loan processing, so do both at once.
- Finish counseling and paperwork. Keep your documentation organized and submit everything your counselor and lender request.
- Confirm all funds in writing. Make sure seller concessions, lender credits, gifts, and DPA are all approved and documented before you go under contract.
- Know post-closing rules. If your assistance is forgivable, understand how long you must live in the home to avoid paying money back.
Starter document checklist
- Government-issued photo ID
- Social Security numbers for all borrowers
- Recent pay stubs and W-2s or tax returns
- Bank statements for the past 2 to 3 months
- Gift letters if receiving gift funds
- Employer contact information
- Proof of homebuyer education completion
Timing tips that save deals
- Start education and DPA applications early. Some local funds are first come, first served and can run out.
- Ask your lender how assistance will affect your loan-to-value, mortgage insurance, and underwriting.
- Get a written list of allowable funds and maximum seller concessions for your loan type before you make an offer.
For sellers in today’s market
If you are selling in Montgomery, Bucks, or Chester County, understanding DPA helps you evaluate offers. Buyers using assistance can be well qualified, and programs often require education and counseling. Work with your agent and buyer’s lender to confirm timelines and documentation. You can also plan seller concessions within loan limits to help a strong offer close smoothly.
Local resources and next steps
- Explore affordable mortgages and assistance on PHFA’s homeownership programs.
- Check county-administered options on the Montgomery County Office of Housing & Community Development site and your township or borough pages.
- Find counselors and education through HUD’s housing counseling resources.
- Learn how to compare loan offers and understand closing costs with the CFPB’s guides to mortgages and closing costs.
Ready to explore your options?
Whether you are buying your first home in Abington 19001 or moving within Montgomery, Bucks, or Chester County, the right plan can lower your upfront costs and keep your offer competitive. If you want help mapping your loan options, connecting with PHFA-approved lenders, and coordinating next steps from offer to closing, reach out to the Art Herling Team In Blue Bell. We are ready to guide you through a smooth, confident purchase.
FAQs
How does down payment assistance work in Montgomery County?
- DPA typically comes as a forgivable loan, deferred second mortgage, or small grant that reduces your upfront cash, with rules on income, price limits, education, and owner-occupancy.
Can I use assistance with FHA or conventional loans?
- Often yes, but it depends on the program and your lender’s underwriting; confirm compatibility before making an offer.
Does Abington 19001 qualify for USDA zero-down loans?
- Many suburban Abington addresses are not USDA-eligible; check the official property eligibility maps if you are considering more rural areas nearby.
Will assistance cover my entire down payment?
- Sometimes, but many programs offer a set dollar amount or percentage that may not equal the full required down payment; your lender will size the gap during preapproval.
What happens if I sell before my assistance is forgiven?
- Forgivable assistance often includes a recapture clause, which can require you to repay a prorated amount if you sell or move out before the forgiveness period ends.
How do seller concessions and lender credits differ from DPA?
- Seller concessions and lender credits usually apply to closing costs, not your down payment, and both are limited by loan rules; DPA is designed to help with down payment and closing costs depending on the program.
Where can I find approved homebuyer education?
- Use HUD’s housing counseling resources or check PHFA’s homeownership programs for approved counseling providers that serve Montgomery County.
