What down payment assistance programs are available to homebuyers in Lancaster, PA?
Lancaster homebuyers can access multiple stackable programs that together can cover $20,000 or more in down payment and closing costs. Pennsylvania’s PHFA K-FIT loan provides 5% of the purchase price with no dollar cap, forgiven over 10 years at 10% per year. Tenfold’s local Lancaster program adds a zero-interest deferred loan of $7,000 — or up to $10,000 in Southwest Lancaster. Many qualified buyers can layer both programs, plus a third option through NeighborWorks, through a single PHFA-approved lender at settlement.
Most first-time buyers in Lancaster come in with the same assumption: down payment assistance programs are either nearly impossible to qualify for, or the amounts are too small to move the needle.
Neither is true.
There’s real money available right now — and if you know how to layer the programs that exist in Lancaster County, you can walk into settlement with $20,000 or more already applied toward your down payment and closing costs. Money that’s either forgiven gradually while you own the home, or carries no monthly payment and no interest until you sell.
Here’s exactly what’s available, how the programs work together, and what you need to do first.
The Two Programs Lancaster Buyers Use Most
Pennsylvania’s primary assistance program for homebuyers is K-FIT — short for Keystone Forgivable in Ten Years. It runs through the Pennsylvania Housing Finance Agency (PHFA) and delivers a second mortgage for 5% of your purchase price with no dollar cap. Every year you stay in the home, 10% of the original balance is forgiven. After 10 years, nothing is owed. No balloon payment. No refinancing required to clear it.
On a $380,000 home — close to Lancaster County’s current median — that’s $19,000 in assistance. On a $450,000 home, it’s $22,500. The math scales with your purchase price, which matters in a market where prices have been climbing steadily.
Alongside K-FIT, PHFA also offers HOMEstead, which provides up to $10,000 in down payment and closing cost help at 0% interest, also forgiven after 10 years of ownership. Your PHFA-approved lender can review which second mortgage option works better for your specific loan — they run through the same application process.
The second major program is local: Tenfold (formerly known as LHOP — the Lancaster Housing Opportunity Partnership). Tenfold is a Lancaster-based organization that provides a zero-interest deferred loan of $7,000 for eligible buyers, rising to $10,000 for homes in the Southwest Lancaster area. The key difference from K-FIT: Tenfold’s loan isn’t forgiven on a schedule. It’s repaid when you eventually sell or refinance. But it carries no monthly payment and no interest while you’re in the home — for most buyers, that means it effectively costs nothing for the entire time they own the property.
A third option worth knowing about is the Lancaster County First Time Homebuyer Loan through NeighborWorks, which can add up to $5,000 more for qualified buyers. Not everyone will stack all three, but for buyers who meet the eligibility requirements, the combination can be substantial.
How Stacking the Programs Works
Here’s what most buyers in Lancaster don’t realize: you can often use K-FIT and Tenfold in the same transaction.
When they’re combined, the math changes meaningfully. On a $375,000 home:
- K-FIT (5% of purchase price): $18,750 toward down payment and closing costs
- Tenfold: $7,000 in zero-interest deferred assistance
- Combined total: $25,750 applied at settlement
For a buyer using a conventional loan with 5% down, that down payment is largely handled by K-FIT alone. Tenfold then reduces the out-of-pocket closing costs — which in Lancaster County typically run $8,000–$12,000 on a purchase in the $350,000–$400,000 range.
If NeighborWorks assistance is layered on top, you’re approaching $30,000 in combined help on a single Lancaster transaction. That’s the math that turns a “we can’t quite afford it yet” situation into a real path to homeownership.
One critical point: you must use a PHFA-approved lender to access K-FIT. Not every mortgage company participates. When you contact a lender for pre-approval, ask directly: “Are you PHFA-approved, and do you offer K-FIT?” If they don’t know what K-FIT is, find a different lender. This is non-negotiable for accessing the state program — and it’s a detail that buyers miss constantly.
This is exactly the kind of thing I walk buyers through before we ever start touring homes. Knowing your full buying power — including assistance — changes which homes are realistic targets and how you structure your offer.
What You Need to Qualify
The qualifying requirements are more accessible than most buyers expect.
For PHFA K-FIT:
- Minimum 660 credit score
- Household income at or under $92,000 for one-to-two person households, or $107,300 for households of three or more in Lancaster County
- Liquid assets after closing must be under $50,000 (this program is designed for buyers who genuinely need the bridge — not buyers with large reserves who simply prefer assistance)
- Must use a PHFA-participating lender
- Available to first-time buyers and repeat buyers who haven’t owned a home in the past three years
For Tenfold:
- Completion of Tenfold’s required Home Buyer Course (must be scheduled in advance — you can reach them at 717-397-5182)
- Income limits apply and are reviewed individually — Tenfold walks you through eligibility when you contact them
- For purchases within Lancaster County
The income limits are higher than most buyers expect. A household earning $95,000 can still qualify for K-FIT in Lancaster County — that captures a significant portion of buyers active in the current market, including many who’ve been sitting on the sidelines thinking they don’t qualify for anything.
The restriction that trips up more buyers than the income limits: the $50,000 liquid asset cap. If you have more than $50,000 in accessible savings and investments after accounting for your closing costs and down payment, you won’t qualify. The program targets buyers who need the assistance to make the purchase work.
If you’re close to the edge on any of these requirements, it’s worth sitting down with a PHFA-approved lender before ruling yourself out. There’s more flexibility in the program structure than the summary numbers suggest.
The Steps That Actually Move This Forward
Getting down payment assistance isn’t complicated — but the order matters. Waiting until you’re under contract to research programs means you’ll either miss Tenfold’s course requirement or scramble to find a participating lender while contract deadlines are running.
Here’s the sequence that works:
1. Call Tenfold first. Their number is 717-397-5182. Register for the Home Buyer Course — it’s mandatory for their DPA and isn’t waivable. Scheduling it early means it won’t become a bottleneck when you’re under the agreement of sale and things are moving fast.
2. Find a PHFA-participating lender and ask specifically about K-FIT. When you contact a lender, ask: “Do you offer PHFA K-FIT, and can I layer it with Tenfold?” Some loan officers will bring it up proactively. Others won’t. Ask directly regardless.
3. Review your full settlement costs before you start shopping. Your lender’s Loan Estimate will break down every line item. Go through it before you start touring homes — not after you’re under contract. Down payment assistance covers significant costs, but understanding what’s left ensures there are no surprises at the settlement table.
If you’re still working through whether to buy now or keep renting, our 2026 rent vs. buy breakdown for Lancaster County covers the full financial comparison. And for a current read on where prices and competition stand, the March 2026 Lancaster County market update has the latest inventory and days-on-market data.
Lancaster remains competitive. Homes are selling at or above list price, and move-in-ready properties in the $350,000–$500,000 range move quickly. Knowing your full buying power — including assistance — means you can make a confident, complete offer when the right home comes up, rather than hesitating while someone else buys it.
Frequently Asked Questions
Can I use PHFA K-FIT if I’m not a first-time homebuyer in Pennsylvania?
Yes. PHFA K-FIT is available to both first-time buyers and repeat buyers who haven’t owned a home in the past three years. If you owned a home more than three years ago and are now buying again in Lancaster County, you can still qualify as long as you meet the income, credit score, and liquid asset requirements.
Does using down payment assistance affect my interest rate?
PHFA loans may carry a slightly different rate compared to some conventional products, since the primary mortgage and the K-FIT second mortgage are packaged together through the same lender. For most buyers, the value of the forgiven assistance outweighs any rate difference over the life of the loan. Compare total cost over your expected time in the home, not just the headline rate.
What happens to my K-FIT loan if I sell my home before 10 years?
If you sell before the full forgiveness period, you repay the remaining unforgiven balance from your sale proceeds at settlement. Since 10% is forgiven each year, the amount you owe decreases every year you stay. Sell after year 5 and you’d repay 50% of the original balance — not the full amount. The payoff comes out of your sale proceeds, not out of pocket at closing.
What are the income limits for PHFA K-FIT in Lancaster County?
The limit is $92,000 for households of one or two people, and $107,300 for households of three or more in Lancaster County. These apply to the total gross income of all borrowers on the loan. They’re higher than most buyers realize — a meaningful share of Lancaster County buyers fall within them.
Can I use down payment assistance to buy a new construction home in Lancaster County?
PHFA K-FIT can be used with new construction homes as long as the property meets PHFA eligibility requirements and you use a PHFA-approved lender. Tenfold’s program may also apply depending on the home’s location. Your PHFA-approved lender can confirm which programs are available for the specific property you’re considering.
Down payment assistance programs in Lancaster County have real money attached — but most buyers either don’t know they exist or don’t realize they can be combined. If you’re trying to figure out whether you qualify, which PHFA-approved lenders are active in Lancaster right now, or how your full buying picture looks before you start shopping, that’s exactly the kind of conversation I have with buyers before we ever look at a house.
Reach out anytime to talk through your situation.
About Craig Hartranft
Craig Hartranft is a top-ranked Lancaster County REALTOR® and Founder of The Craig Hartranft Team, Berkshire Hathaway’s #1 real estate team in Lancaster County, with 460 homes sold and $195M+ in sales in 2025, plus over 1,400 five-star reviews across Google and Zillow.