The Quick Answer (BLUF): At the $320,000 South Philadelphia median, PHFA's K-FIT loan puts the most money on the table — 5% of the price with no dollar cap, about $16,000, forgiven at 10% a year until it disappears. The City's Philly First Home grant is capped at $10,000 and Keystone Advantage at $6,000, so the percentage is not what decides this; the cap is.
The key data at a glance
Program | What you get at $320,000 | Do you pay it back? | The catch |
|---|---|---|---|
K-FIT (PHFA) | $16,000 — 5%, no dollar cap | Forgiven 10% a year over 10 years | Requires a PHFA first mortgage and a 660 credit score |
Philly First Home (City) | $10,000 — 6%, capped | No | No condominiums; counseling required before the Agreement of Sale |
Keystone Advantage (PHFA) | $6,000 — 4%, capped | Yes, monthly over 10 years at 0% interest | Smallest of the three at this price |
Homestead Exemption (City) | Not down payment — up to $1,399 a year | No | Apply by 1 December for the following year's bill |
Sources: PHFA K-FIT, PHFA Keystone Advantage, Philly First Home, Philadelphia Homestead Exemption. Purchase price used is the median South Philadelphia single-family sale recorded with the City over the last twelve months.
Deeper dive: 3 things you must know
1. The cap decides this, not the percentage
Philly First Home advertises 6% and K-FIT advertises 5%, so the City program looks more generous. It is not, above a certain price.
Philly First Home pays 6% or $10,000, whichever is lower. Six percent of $166,667 is exactly $10,000 — so at any purchase price above roughly $167,000, the percentage stops mattering and you get the flat cap. Every South Philadelphia neighborhood median clears that line comfortably.
K-FIT has no maximum dollar limit. Its 5% keeps scaling with the price.
- Data point: At $320,000 that is $16,000 from K-FIT against $10,000 from Philly First Home — a $6,000 swing in the state program's favor.
- The action: Do the arithmetic at your price before you assume the bigger percentage wins. Below about $167,000 the City grant leads; above it, K-FIT does.
2. Forgivable, repayable, and free are three different things
These programs are described in the same breath and behave nothing alike.
- Step one: Philly First Home is a grant. You do not repay it.
- Step two: K-FIT is a forgivable loan. It is forgiven at 10% a year over ten years, so it only fully disappears if you stay. Sell in year four and roughly 60% is still owed.
- Step three: Keystone Advantage is a real second mortgage. It is repaid monthly, amortized over ten years at 0% interest — cheap money, but money that shows up in your debt-to-income ratio when you qualify.
- Step four: Ask your lender to show all three as a monthly payment and as a payoff figure at year five. The ranking changes depending on how long you plan to stay.
3. The disqualifiers are procedural, and they are unforgiving
Almost nobody loses this money on income. They lose it on sequence and property type.
Philly First Home requires one-on-one counseling with a City-funded housing counseling agency before you sign the Agreement of Sale. Not before closing — before you sign. There is no retroactive fix, and it is the single most common way buyers forfeit $10,000 they were otherwise entitled to.
The program also covers a single-family home or a duplex only, and excludes condominiums. In neighborhoods where new construction is frequently delivered as condo units, two nearly identical homes on the same block can differ by $10,000 in eligibility purely on how the deed is written.
K-FIT's constraints are different in kind: a 660 minimum credit score, and it must be paired with a PHFA first mortgage such as the Keystone Home Loan. If you have already locked a conventional loan elsewhere, K-FIT is not available to you.
Income and purchase-price limits also apply and vary by county — Philadelphia's are published in PHFA's Appendix A. Philly First Home's own limits run from $85,900 for a one-person household to $122,700 for four.
Getting the sequence right
The money is real and it is sitting there. What costs people is order of operations — signing an Agreement of Sale before counseling, or locking a first mortgage that rules out the largest assistance loan available to them.
If you are within a few months of buying, talk to me before you sign anything. Getting the sequence right is free; getting it wrong is $10,000.
Local FAQ
Which down payment program gives me the most money in Philadelphia?
Can I use Philly First Home and a PHFA program together?
Do any of these work on a condo?
What if I already own a home?
Drafted with AI assistance; every statistic is human-verified against primary sources before publishing.
About Martin Rodriguez
South Philadelphia REALTOR® with KW Empower — Grays Ferry, Point Breeze & Newbold specialist. Real answers, verified numbers, no pressure.