2019 First-Time Home Buyer Programs in New York
Many people aspire to own a home at some point in their lives, but in competitive, high-cost markets like New York, buying your first home can seem out of reach. Fortunately, both the state and federal governments offer first-time home buyer programs that can help.
Are you a first-time home buyer in New York? This guide will explain your options.
In this guide:
- New YorkFirst-time Home Buyer Programs
- Down Payment Assistance in New York
- Other Optional Add-on Programs
- Federal First-time Home Buyer Programs
New York first-time home buyer programs
The State of New York Mortgage Agency (SONYMA) aims to make homeownership more accessible to residents across the state. The organization offers several programs designed to lower the costs of home buying, particularly for first-time buyers.
Each program offers:
- 30-year fixed-rate mortgage loans
- Down payments as low as 3%
- Loans for one- to four-unit properties, co-ops, and condos
- Extended rate locks
- A minimum cash contribution of just 1%
Eligibility:
- You must contribute at least 1% of the purchase price (3% for co-ops).
- You need to fall under the income and purchase price limits for the county you’re buying in.
- You must have at least a two-year history of consistent income and enough money in the bank to cover your down payment and closing costs.
- You must be purchasing the property to be your primary residence.
Other things to keep in mind:
- If your down payment is less than 20%, private mortgage insurance (PMI) is required.
- The number of mortgages available is limited. They are granted on a first-come, first-served basis.
- SONYMA mortgages cannot be used to refinance an existing loan.
- If you’re purchasing a multi-unit property, all units must be located in a single building.
- Military veterans do not need to be first-time home buyers to apply, as long as they are purchasing in an eligible target area.
Here are the programs SONYMA offers:
Achieving the Dream
The Achieving the Dream loan program offers the lowest interest rates of all SONYMA mortgage offerings. It requires a down payment as low as 3% and allows you to lock in a rate for up to 240 days.
Benefits
- Low, fixed interest rates
- Minimum 3% down payment requirement
- Can be combined with other SONYMA programs
- Offers extended interest rate locks
Additional eligibility requirements
- You must be a first-time home buyer
- You must complete a home buyer education course
- You must be purchasing the property to be your primary residence
Low Interest Rate
Despite its name, this SONYMA loan program has slightly higher rates than the Achieving the Dream loan, though they’re still low compared to other mortgage options. The program can also be combined with other SONYMA assistance offerings.
Benefits
- Low interest rates
- Minimal down payment required
- Can be combined with other SONYMA programs
- Offers extended interest rate locks of 120 to 240 days
Additional eligibility requirements
- You must be a first-time home buyer
- You must complete a home buyer education course
Conventional Plus
SONYMA’s Conventional Plus program offers low-interest mortgages for either purchasing a new home or refinancing an existing mortgage in New York state. It’s available to both repeat and first-time home buyers.
Benefits
- Down payments as low as 3%
- No minimum personal contribution if you’re buying a one-unit property (100% can come from gift funds)
- Can be used to refinance an existing loan
- Available to previous homeowners
Additional eligibility requirements
- You must have a minimum credit score of 620 for one-unit properties and 680 for two- to four-unit properties
- Down payments of at least 5% are required on two- to four-unit property purchases
- You must fall under the income limits for your county
FHA Plus Program
The SONYMA FHA Plus Program combines the low-cost benefits of a Federal Housing Administration-insured mortgage with down payment assistance. It’s available to first-time and repeat buyers.
Benefits
- Down payments as low as 3.5%
- Can be used to refinance an existing loan
- Available to first-time and repeat home buyers
- Can be combined with any of SONYMA’s additional assistance offerings
Additional eligibility requirements
- You must contribute at least 1% from your own funds.
- Other parties can contribute a maximum of 6% of the sale price.
- You must have a minimum credit score of 620.
- You cannot own any other properties.
- You must pay for private mortgage insurance.
Down payment assistance in New York
SONYMA also offers down payment assistance loans, which can reduce your initial costs of buying a home. These loans carry no interest rate and can be combined with the agency’s mortgage loan options. You can borrow a minimum of $1,000.
>> Read more: Mortgage Calculator: Estimate Your Monthly Payments
Benefits
- No monthly payments are required.
- You can get a 0% interest rate.
- Debt is forgiven after 10 years of residing in the home.
- Assistance goes up to 3% of the purchase price (with a cap of $15,000).
- Funds can be used to cover your mortgage insurance premium.
Things to keep in mind
- These programs can only be used in conjunction with SONYMA mortgages.
- Your down payment assistance funding cannot exceed the total of your combined down payment and closing costs.
- Using the SONYMA down payment assistance program will mean a 0.375% higher interest rate on your mortgage loan. The Homes for Veterans, Graduate to Homeownership and Energy Star programs are exceptions.
- You might be required to repay some or all of your down payment assistance funding if you sell your home or refinance it within the first 10 years after purchase.
- You must make at least a 1% cash contribution to your home purchase to qualify for any down payment assistance program.
Other optional add-on programs
In addition to its down payment assistance loans, SONYMA also offers a variety of other funding programs to alleviate the costs of buying a home.
- Remodel NY
- Homes for Veterans
- Graduate to Homeownership
- Neighborhood Revitalization
- Energy Star
- Manufactured Home Advantage Program
Remodel NY
The Remodel NY program can help you finance the costs of repairs and renovations on the property you’re buying, including structural alterations, eliminating health and safety concerns, updating plumbing, or making aesthetic changes.
The assistance must be used in conjunction with SONYMA’s Low Interest Rate or Achieving the Dream loan program.
Homes for Veterans
SONYMA’s Home for Veterans program offers reduced interest rates for veterans and active military service members. Spouses and some members of the National Guard and reserves might also be eligible.
Benefits
- Reduces interest rates by 0.375%
- Can be combined with SONYMA’s down payment assistance loans
- No need to purchase discount points
Eligibility requirements
- You must be a military member or veteran and able to provide a Certificate of Release or Discharge from Active Duty, or NGB Form 22.
- You’ll also need a Leave and Earning Statement and your Military ID, and a military ID.
- You must make at least a 1% cash contribution toward your purchase.
Graduate to Homeownership
This program is designed to help recent college graduates afford to buy a home. It offers low-interest rates and can be combined with SONYMA’s down payment assistance loans and Remodel NY.
Benefits
- Low interest rates
- Can be combined with SONYMA’s down payment assistance loans
- Can be combined with Remodel NY program
Eligibility requirements
- You must have earned an associate, bachelor’s, master’s, or doctoral degree within the last 48 months. Your institution must be recognized by the Department of Education.
- You must be purchasing the property to be your primary residence.
- You must be purchasing in a qualifying upstate New York community.
- You must fall under the income limits for your county.
Neighborhood Revitalization
This program is designed to encourage home buying in areas with high levels of vacancy. It offers incentives to buyers purchasing and renovating properties in designated communities across the state.
Benefits
- Offers up to $20,000 in renovation assistance
- Can be combined with other SONYMA programs and loans
Eligibility requirements
- You must be purchasing a property in an approved community.
- You must fall under the income limits for your county.
- All renovations must be completed by a U.S. Department of Housing and Urban Development (HUD) or SONYMA-approved contractor.
Energy Star
SONYMA’s Energy Star program can help lower the costs of purchasing an Energy Star-certified property. Energy Star homes reduce utility bills by an average of 20% when compared to non-Energy Star homes.
Benefits
- Reduces interest rates by 0.375%
- Can be combined with SONYMA’s down payment assistance loans
- No need to purchase discount points
- 240-day rate lock available
Eligibility requirements
- You must be purchasing a newly constructed single-family home or a newly constructed two-family home in a SONYMA designated target area.
- The home must be a certified Energy Star property.
Manufactured Home Advantage Program
This program is designed to assist both manufactured homeowners and owners of manufactured home parks. It offers financing to purchase manufactured homes and parks and rehabilitate existing ones.
To learn more about the program, contact the appropriate housing agency in your area.
>> Read more: New York Mortgage Rates
Federal first-time home buyer programs
The federal government also offers loan programs that can make home buying more affordable. If you’re a New York first-time home buyer and are unable to qualify for the programs we mentioned above, one of the following federal programs might be able to assist you.
- FHA loans: Guaranteed by the Federal Housing Administration, FHA loans offer low interest rates and require a minimum down payment of 3.5%. They also have some of the loosest credit and debt-to-income requirements around. Check out our list of the best FHA lenders to shop for a loan.
- VA loans: If you’re a military member or veteran, a taking out a loan from a VA lender may be your best option to purchase a house. These mortgages are backed by the Department of Veterans Affairs, require zero down payment, and offer low interest rates.
- NADL loans: Native American Direct Loans can help you purchase a home on Federal Trust land if you’re a Native American veteran or military member. These loans require no down payment or mortgage insurance.
- USDA loans: Designed for use on homes in rural parts of the country, USDA loans require zero down payment and have competitive interest rates. They’re guaranteed by the Department of Agriculture.
- Good Neighbor Next Door loans: Public servants like teachers, EMTs, police officers, and firefighters can qualify for the Good Neighbor Next Door program, which offers HUD-owned properties at a 50% discount.
- Fannie Mae or Freddie Mac loans: Conventional loans backed by government-sponsored enterprises Fannie Mae and Freddie Mac are an option if you don’t qualify for the government assistance programs. They require at least a 620 credit score, allow for down payments as low as 3%, and are available from most mortgage lenders.
Bottom line: Buying a home in New York is possible
Buying a home in New York can be expensive. Luckily, both the state and federal governments can step in to make the process easier.
If you’re considering buying a home in New York, reach out to the housing agency in your area and see which New York first-time home buyer programs you might be eligible for.
The post 2019 First-Time Home Buyer Programs in New York appeared first on LendEDU.