Philly First Home Grant and Cash to Close in Philadelphia
Philly First Home Grant and Cash to Close in Philadelphia
How Much Money Do You Really Need to Buy a House in 2026?
If you are a first time home buyer in Philadelphia, you have probably asked yourself some version of this question:
How much money do I really need to buy a house?
Not just the down payment. The real number.
The money you need in the bank to go from, “I want to buy,” to, “I have keys in my hand.”
That number is called cash to close, and in Philadelphia, it can catch first time buyers off guard, especially because closing costs here tend to be higher than most people expect.
The good news is, Philadelphia also has a program that can help.
It is called Philly First Home, and it may be one of the best tools first time home buyers have heading into 2026.
In this guide, I will break down what the Philly First Home Grant is, how it works, what cash to close really means, and how buyers can plan for it without feeling overwhelmed.
What Is the Philly First Home Grant?
The Philly First Home program is designed to help first time homebuyers in Philadelphia with down payment and closing cost assistance.
It is intended for buyers who meet income limits and purchase price limits, and who plan to live in the home as their primary residence.
In simple terms, it can help reduce the amount of money you need out of pocket to buy your first home.
Most buyers do not struggle because they cannot afford a monthly payment.
They struggle because they do not have enough cash saved to cover the upfront costs of buying.
That is exactly what this program is meant to help with.
To learn more about the Philly First Home program directly from the City of Philadelphia, you can review the official program details here:
https://phdcphila.org/residents-and-landlords/homebuyers/philly-first-home/
How Much Is the Philly First Home Grant?
The Philly First Home program can provide assistance of:
Up to $10,000, or 6 percent of the purchase price, whichever is less.
This can be a major help for first time buyers who feel like they are doing everything right, but still cannot get ahead because of the upfront cost.
What Can Philly First Home Money Be Used For?
In many cases, assistance programs like this can be used toward:
Down payment
Closing costs
Cash needed to close at settlement
This is important because closing costs in Philadelphia can be a big number.
Sometimes buyers hear the word “grant” and assume it is a small credit.
In reality, when used correctly, this type of program can reduce the money you need to bring to the closing table.
What Does Cash to Close Actually Mean?
Cash to close is the total amount of money you need to bring to settlement to buy the home.
It includes more than just the down payment.
Most first time buyers focus on the down payment first, then they see the loan estimate and wonder where the rest of the costs came from.
Cash to close typically includes:
1. Down Payment
Depending on your loan program, this can be much less than twenty percent.
2. Closing Costs
These are the costs to finalize the mortgage and transfer ownership.
3. Prepaid Items
This may include homeowners insurance, property taxes, and mortgage interest collected at closing, depending on the timing of your closing.
4. Any Adjustments
Depending on the deal, there may be credits or adjustments between the buyer and seller.
The key point is simple:
Cash to close is the real number you should plan for.
Frequently Asked Questions About Philly First Home and Cash to Close
How much is the Philly First Home Grant?
Philly First Home can provide assistance up to $10,000, or 6 percent of the purchase price, whichever is less, for qualified first time home buyers.
Can Philly First Home be used for closing costs?
In many cases, assistance may be applied toward upfront costs like down payment and closing costs, depending on eligibility and program requirements.
How much are closing costs in Philadelphia?
Closing costs in Philadelphia often range from 4.5 percent to 6 percent of the purchase price, largely due to transfer taxes and settlement fees.
What is cash to close?
Cash to close is the total amount of money needed at settlement, including down payment, closing costs, and prepaid items like homeowners insurance and property taxes.
Do I need 20 percent down to buy a home in Philadelphia?
Many first time buyers qualify with significantly less than twenty percent down depending on loan type, credit, income, and other qualifying factors.
Is Philly First Home only for certain neighborhoods?
Philly First Home is generally tied to eligibility rules like income limits, purchase price limits, and owner occupancy requirements. The home must typically be located within Philadelphia.
What is the best first step if I want to use Philly First Home?
The best first step is to speak with a mortgage professional early so you can confirm eligibility, estimate cash to close, and build a plan before you start shopping seriously.
How Much Are Closing Costs in Philadelphia?
This is one of the biggest surprises Philadelphia buyers run into.
In Philadelphia, a realistic planning range for closing costs is:
4.5 percent to 6 percent of the purchase price.
This higher range can be due to:
Transfer tax
Title insurance
Recording fees
Lender fees
Escrows and prepaids
This is why Philadelphia first time buyers need more than an online estimate. You need real numbers based on how deals close here.
Philadelphia Cash to Close Examples (Realistic Estimates)
These examples are simplified estimates to help you visualize what cash to close can look like. Actual numbers vary based on the property, loan program, taxes, and timing.
Example 1: $250,000 Purchase Price
Estimated closing costs at 4.5 percent to 6 percent:
$11,250 to $15,000
Down payment depends on the loan program. Many first time buyers may qualify for lower down payment options.
With Philly First Home assistance, the upfront cash needed may be reduced.
Example 2: $350,000 Purchase Price
Estimated closing costs at 4.5 percent to 6 percent:
$15,750 to $21,000
This is where many buyers start to feel the difference between, “I can afford the payment,” and, “I have enough saved.”
Philly First Home can help close that gap for buyers who qualify.
Example 3: $450,000 Purchase Price
Estimated closing costs at 4.5 percent to 6 percent:
$20,250 to $27,000
At this price point, having a plan matters more than ever. This can include assistance, seller concessions, and choosing the right loan structure.
What If I Do Not Have Enough Saved Yet?
If you do not have enough saved right now, you are not failing.
You are just early.
Many first time buyers are closer than they think, they just need clarity.
Sometimes the solution is not waiting years.
Sometimes it is understanding the real numbers, building a short timeline, and using the tools available.
That is where proper guidance can change everything.
How To Reduce Your Cash to Close in Philadelphia
There are several ways buyers may be able to reduce out of pocket cash, depending on the market and loan program.
Here are the most common strategies:
1. Philly First Home Assistance
This can reduce upfront cash for buyers who qualify.
2. Seller Concessions
In some transactions, sellers may agree to contribute toward the buyer’s closing costs.
3. Choosing the Right Loan Program
Different loan programs have different down payment requirements and mortgage insurance structures.
4. Planning the Timing of Your Purchase
The time of year, current competition, and neighborhood trends can all influence negotiations and seller flexibility.
The best plan combines these options in a way that fits your situation, not someone else’s.
What Most First Time Buyers Get Wrong About Grants
A lot of people think down payment assistance is rare, complicated, or only for buyers with perfect finances.
In reality, many buyers who qualify are normal working families who simply need help bridging the upfront costs.
The key is understanding eligibility, how the program works, and what steps should be completed early in the process.
Why Working With a Local Mortgage Expert Matters in Philadelphia
Philadelphia is a unique market, and mortgage strategy matters here.
Online calculators cannot tell you:
How Philly closing costs really work
Which programs match your income and purchase price
What sellers are doing in your target neighborhood
What cash to close will look like with real numbers
At CM Mortgage Services Inc, we help first time buyers build a plan that is realistic and personal.
J.R. Conway works with Philadelphia area first time home buyers every day, and the goal is simple:
Make the process clear
Help you avoid surprises
Get you confident before you ever make an offer
Buying your first home should feel exciting, not stressful.
Final Thoughts: The Best Time To Plan Is Before You Fall in Love With a House
Most problems happen when buyers find the perfect home first and ask financing questions second.
The smartest way to buy confidently in 2026 is to start with a plan:
Know your numbers
Know your cash to close
Understand your options
Use programs that may help
Work with someone who can guide you through the process
If you are thinking about buying your first home in Philadelphia, this is a great time to start building that roadmap.
If you are early in the process and want a simple overview of homebuying basics, HUD also provides a helpful guide here:
https://www.hud.gov/topics/buying_a_home
