More families are turning to a Penn Hills program that offers up to $14,500 toward a down payment and closing costs on homes in the municipality.

Penn Hills, in collaboration with social services provider ACTION-Housing, Allegheny County Economic Development and consultant Urban Design Ventures, launched the program in 2017 to avert losing more than $250,000 in expiring federal funds.

That year, only three families took part in the Penn Hills Homebuyer Assistance Program, according to Chris Blackwell, the municipality’s planning director.

“And then it kept going up,” Blackwell said.

According to Blackwell, more than 70 families have benefited from the program, buying homes with a combined value of $8.9 million. Beneficiaries receive zero-interest loans up to $14,500, forgiven after five years, provided they comply with program requirements.

The loans are made with an annual allocation from the U.S. Department of Housing and Urban Development through its HOME Investment Partnerships Program. The Allegheny County HOME Consortium receives the money before dividing it up between the county, Penn Hills and McKeesport.

Penn Hills anticipates $130,495 in HOME funds this year, the same as last year. The municipality also received a $168,439 boost in 2019 from another community that didn’t spend its funding in time.

Blackwell said the homebuyer assistance program “makes the money go further” than if the municipality opted to build an affordable home every year or two.

“There’s tons of people with great jobs, they make good money, but they don’t have the savings to put 20% down on a house,” Blackwell said. “They just don’t have the capital.”

Administering the program is a team effort.

Penn Hills promotes the program and ensures that properties are in compliance with building codes. ACTION-Housing and the county split the work of processing applications and assisting banks with underwriting, but the county gets the final say on approvals.

Most families who complete the application are approved for funding, according to Dan Sullivan, housing stabilization program manager for ACTION-Housing.

But not just anyone, or any home, is eligible.

Applicants must make less than 80% of the area median income, undergo homeowner counseling from a HUD-approved agency and obtain preapproval from a set list of mortgage lenders.

They also are on the hook for at least $500 or 3% of a down payment and closing expenses, whichever is lesser.

For a home to qualify, it has to be in Penn Hills, up to code and occupied by the homebuyer as a primary residence, among other stipulations. The final sale price cannot exceed $214,000, per HUD rules. Penn Hills homes are selling for a median price of $160,000, according to online real estate broker Redfin.

“Because of the affordability of Penn Hills houses, it’s perfect for this program,” Blackwell said.

Blackwell and Sullivan mentioned that Allegheny County officials have expressed interest in expanding the program. County spokesperson Abigail Gardner declined to comment on the matter.

A variety of programs exist at the state, county and local levels to help families buy and keep their homes.

Passed by state lawmakers in 2022, the Whole Home Repairs program funds up to $50,000 in major home repairs, such as roof and foundation restoration, for low-income households. Gov. Josh Shapiro’s proposed 2024-25 budget includes $50 million to continue this program.

Pittsburgh runs its own program to assist low-income families with the upfront costs of homeownership, but it’s limited to first-time homeowners, unlike the one in Penn Hills.

That’s a crucial difference, Sullivan said, as homeownership experience doesn’t always equal financial literacy.

“The knowledge gap isn’t always solved by closing on a mortgage,” Sullivan said. “We’re dealing with a population that, in many cases, they’re the first people in their family to ever buy a home.”

He noted that once a family does purchase a home with the proper research, it’s an effective way to build generational wealth.

“These individuals who are applying and successfully getting into the program will have an actual asset,” Sullivan said. “For every individual who’s bought a home, they now have an ability to have some wealth that they didn’t before.”