An official City of Philadelphia flyer also confirms the 3% down payment and says the city has earmarked $25 million for low-interest mortgage loans without private mortgage insurance (PMI), an added monthly expense typically paid by conventional borrowers who put down less than 20%.
The planned mortgage would serve first-time homebuyers earning as much as 120% of the area’s median income, with a launch targeted for later this year. The city has yet to finalize the program’s guidelines and application process, according to its official website.
As The Philadelphia Inquirer reported, One Philly Mortgage is part of Mayor Cherelle Parker’s H.O.M.E. initiative, which seeks to build or preserve 30,000 homes during her first term.
However, the H.O.M.E. initiative has been slow to spend its allocated funding. As of Sept. 30, the city had spent just $38 million of its $278 million first-phase budget. Only four of the 29 approved programs had recorded spending, all of them existing initiatives.
Angela Brooks, the city’s chief housing and urban development officer, told the Inquirer that spending is expected to accelerate through the rest of the fiscal year, explaining that housing funding is tied to project milestones rather than fixed dates.
How much could homebuyers save without PMI?
For first-time buyers, saving enough for a 20% down payment to avoid PMI can be difficult, especially with home prices still elevated.
According to data from the St. Louis Federal Reserve, the median sales price of a newly constructed home in the U.S. is around $393,000, down sharply from its 2022 peak but well above pre-pandemic levels.
Existing homes are even more expensive, with the median sales price reaching $417,500 in September, up 1.3% from a year earlier, according to National Association of Realtors data. In the Philadelphia metro area, the median listing price is about $375,000.
PMI costs vary widely. Fannie Mae estimates premiums typically range from 0.2% to 2% of the loan amount annually, depending on the borrower’s credit score, down payment, mortgage type and other factors. Freddie Mac puts the cost at $30 to $70 per month for every $100,000 borrowed. On a $350,000 mortgage, that works out to $105 to $245 per month, or $1,260 to $2,940 a year.
