Homeownership might be the American dream, but buying a home in New York City often seems like a dream out of reach. From saving up for a down payment to covering the closing costs to paying that monthly mortgage, the expenses of buying can be intimidating. But don’t be discouraged: there is help available. Here’s an overview of 10 mortgage assistance programs for first-time home buyers in NYC, plus other programs for low- and moderate-income buyers who may have owned a home before.
The State of New York Mortgage Agency (SONYMA) offers several mortgage assistance programs for first-time NYC home buyers. SONYMA has been partnering with approved mortgage lenders since 1970 to provide 30-year, fixed-rate mortgages. Even better? They have special offerings like low down payment requirements, down payment assistance, and no prepayment penalties.
SONYMA considers first-time buyers to be anyone who hasn’t owned a home in three years or more. So if that’s you — or you’re an active military member or veteran — read on.
SONYMA’s Low Interest Rate Program is the standard program for low- and moderate-income first-time buyers. It offers qualified buyers mortgages at competitive interest rates. The program also has a lower down payment requirement: just 3% of the total price. Eligible properties include one- to four-family homes, condos, and co-ops.
This program can also be combined with any of the others listed below.
The Down Payment Assistance Loan (DPAL) can give SONYMA borrowers a lift when it comes to funding their down payment and closing costs. The minimum loan amount is $1,000, with a maximum of up to $15,000.
DPALs have a 0% interest rate, no monthly payments, and will be forgiven after 10 years, provided the owner keeps the SONYMA financing in place and continues to occupy the home. The loan can also be used to pay all or a portion of a one-time mortgage insurance premium, which can significantly reduce the buyer’s monthly mortgage payment.
Note that DPALs can only be used with SONYMA mortgages.
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SONYMA’s Conventional Plus Program gives you the best of both worlds: a 30-year fixed-rate mortgage in addition to down payment assistance. Plus, you don’t need to be a first-time buyer to qualify. Conventional Plus can also be used to refinance an existing mortgage on a primary home.
Brave enough to be buying a home for the first time and renovating it? Check out the RemodelNY Program. For those who qualify, SONYMA will finance both the purchase and the renovation of your new home with one low, fixed-rate mortgage.
Qualified low-income, first-time home buyers can pursue the Achieving the Dream Program, SONYMA’s lowest interest rate program. The details are similar to the Low Interest Rate Program — 3% down payment requirement, 30-year fixed rate mortgage — but the interest rate is even more competitive.
If you’re looking for a home in a neighborhood that has many vacant properties, you might be eligible for the SONYMA Neighborhood Revitalization Program. The program provides benefits such as $20,000 for home renovations and the ability to seek additional funds from other lenders, and can be combined with other SONYMA programs.
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For home buyers looking for an energy-efficient home, there’s a SONYMA program for your needs. ENERGY STAR®-certified homes can qualify for interest rates .375% lower than standard SONYMA loans, along with down payment assistance of up to $15,000.
Whether the home you’re considering requires minor cosmetic upgrades or major structural repairs, an FHA 203k loan can help. These loans will add the cost of renovations to the original loan amount at the time of purchase. FHA 203K loans can also be used by current homeowners looking to refinance as a way to pay for necessary renovations.
To receive an FHA 203k loan, the borrower must sign a rehabilitation loan agreement stating that the work will begin within 30 days of the execution of the agreement and be completed within six months.
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If you or your spouse is an active military member or retired veteran, you could qualify for lower interest rates through SONYMA’s Homes for Veterans Program. SONYMA waives the first-time home buyer requirement for any veteran and their spouse or co-borrower who:
Any first-time home buyer may take advantage of the program’s benefits if they are:
Just as new motorists receive insurance discounts for taking driver’s education courses, home buyers can benefit from taking a class as well. Fannie Mae offers its HomePath Ready Buyer Program to qualifying first-time home buyers. Upon completion of an online home buying education course, buyers can receive up to 3% assistance toward closing costs on a HomePath property.
You may still qualify for some of SONYMA’s programs. For instance, those considering buying a home in a Target Area don’t need to be first-time buyers. Use the lookup tool to find out if a property is located in a Target Area.
Disclaimer: The content on this site is not intended to provide legal, financial, or real estate advice. It is for information purposes only, and any links provided are for the users’ convenience. Please seek the services of a legal, accounting, or real estate professional before any real estate transaction.