Philly’s First-Time Homeowner Grant Program Returning in May
After an almost two-year break, Philadelphia plans to reintroduce its first-time homebuyer grant program, Philly First Home, next month. This program provides grants of up to $10,000.00 (or 6% of the home’s purchase price, whichever is lower) to assist first-time homebuyers to reduce the principal, cover down payment and loan closing costs. The Philly First Home program will be revived this year with $14.5 million from the city’s Neighborhood Preservation Initiative. The program is expected to help 1,600 buyers in its first year back, according to David Thomas, CEO of the Philadelphia Housing Development Corporation, which manages Philly First Home. These funds are expected to help about 7,000 home buyers over the next few years.
“We are proud to relaunch the hugely successful Philly First Home program, one more tool in the city’s toolbox to help make homeownership a reality for our residents,” said Mayor Jim Kenney in a statement. “As Philadelphia continues to recover from the COVID-19 pandemic and its economic impact, I look forward to seeing this vital program reopen and help even more Philadelphians own their own homes.”
Buyers must not have bought a property in the previous three years, acquire a single-family home or duplex in Philadelphia, and have household earnings below the local median. The program’s financial support will acquire a subordinated lien on the property to the primary mortgage. The lien will become due and payable during the first 15 years of ownership upon the sale or lease of the home, or the refinancing of the first mortgage to take cash out of the property. The lien will be totally forgiven after the 15-year period of ownership is completed.
“The most affordable home is the one you own,” said Councilmember Cherelle Parker. “The Philly First Home program gives people the tools they need to start building generational wealth that they can pass on to their families and own their slice of the American dream.”
The Philly First Home program started in June 2019 and closed in September 2020 after all funds were spent. Since then, homebuyers have received more than $24 million. It was an expansion of the city’s previous down payment assistance programs, which offered between $500 and $1,500 to help new homebuyers achieve their goals.
“Homeownership is often the most significant investment an individual or family will ever make, and we need to make sure everyone has equal access to the long-term financial stability homeownership can provide,” Council President Darrell L. Clarke (5th District) said. “Unfortunately, rising costs and a refusal to raise the minimum wage in Harrisburg are forcing more residents to become renters and inhibiting their ability to save and plan for the future. Philadelphia can and must continue to step up and do all we can to expand economic and housing opportunities to all people.”