First-time homebuyer programs in NY
The State of New York Mortgage Agency (SONYMA) is an organization that aims to remove the hurdles many first-time homebuyers face. By offering low interest rates on mortgage loans and help with down payments and closing costs, SONYMA helps New Yorkers find affordable homes of their own.
As a first-time homebuyer in New York, you have access to some great state support, but you also have access to a number of national mortgage options.
SONYMA offers low-interest mortgage loan programs to help residents of New York find affordable housing. The income and purchase price limits to qualify for the agency’s programs vary by program, but they are generally designed to prioritize low- to moderate-income households.
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Achieving the Dream
Achieving the Dream is SONYMA’s lowest interest rate program. With a 30-year fixed rate mortgage, you’ll only have to contribute 3% of your total loan amount for your down payment. You can use this program for a whole range of home types, ranging from single-family to four-family homes, cooperatives and condominiums.
There are no prepayment penalties with Achieving the Dream, so if you want to make additional payments to save yourself interest in the long run, it won’t cost you anything. You can combine this program with SONYMA’s other special features, including down payment assistance of up to 3% of your home’s purchase price.
To qualify for this program, you’ll have to be a first-time homebuyer or military veteran, or be purchasing a home in a target area. You’ll also need to have good credit, prove you can afford the monthly mortgage payments, plan to live in the home as your primary residence, and attend a homebuyer education course.
The household income and purchase price limits for Achieving the Dream vary by county.
Low Interest Rate
This New York program offers first-time homebuyers, military members and individuals buying in target areas lower down payment requirements and competitive interest rates on 30-year fixed-rate mortgages.
You’ll need to make a down payment of only 3%, with 1% coming from your own funds.You can use this program for a whole range of home types, ranging from single-family to four-family homes, cooperatives and condominiums.
Like with the Achieving the Dream program, there are no prepayment penalties and you can pair this program with SONYMA’s other assistance programs, including several — DAPL, RemodelNY and the Neighborhood Revitalization Program — that we’ll explain shortly.
To qualify for the Low Interest Rate Program, you’ll need to have good credit, demonstrate that you can afford the monthly mortgage payments, and agree to occupy the home as your primary residence.
The program’s income and purchase price limits vary by county.
SONYMA’s Conventional Plus program combines its 30-year fixed-rate mortgage loan with its down payment assistance for both first-time and repeat homebuyers.
Conventional Plus can be used for the purchase of a house or for refinancing an existing mortgage. You can use the down payment loan to either cover your closing costs or pay off your mortgage insurance premium (MIP), eliminating your monthly MIP payment.
To qualify, you’ll have to earn less than 80% of your area’s median income. You’ll also have to check the property address in the FNMA HomeReady Eligibility Tool to determine your corresponding income limit. For more on the features and requirements of this program, SONYMA has a helpful fact sheet.
FHA Plus Program
The FHA Plus Program combines SONYMA’s 30-year fixed-rate mortgage loan with its down payment assistance for both first-time and repeat homebuyers. You can use this program to buy a home or refinance your existing mortgage and use the down payment assistance to pay your closing costs.
You can find out more about the program’s features and requirements through this fact sheet.
Down Payment Assistance Loans (DPAL)
Acknowledging that one of the biggest financial hurdles first-time homebuyers face is covering their down payment and closing costs, SONYMA’s Down Payment Assistance Loan (DPAL) addresses that. When you qualify for a SONYMA mortgage program, you can apply for a DPAL to help you cover your upfront costs or a mortgage insurance premium.
The loan features a 0% interest rate with no monthly payments, and if you’re still in the home after 10 years, the loan will be forgiven. You’re entitled to borrow 3% of your home’s purchase price (up to $15,000) or a straight $3,000, whichever sum is higher as long as it doesn’t exceed your actual down payment and closing costs.
For SONYMA’s first mortgage programs (except for Graduate to Homeownership, Homes for Veterans or Energy Star), when you add a DPAL your interest rate will be 0.375% higher.
Regardless of which program you use, you’ll have to contribute at least 1% of the value of the property out of your own funds. And for three- and four-family properties, the requirement goes up to 3%.
Homes for Veterans Program
Homes for Veterans aims to help both veterans and active service members achieve the dream of homeownership through low-interest mortgage loans. This program is limited to active service members, veterans and their spouses.
Unless they have received a dishonorable discharge, qualified applicants do not need to be first-time homebuyers. The program also is open to National Guard members and reservists, with both active and honorably discharged records. You will be asked to include documented proof of your service with your application.
With this program, you are eligible to use a down payment assistance loan, and you won’t face the 0.375% interest rate bump that’s common with other SONYMA first loan programs when a DPAL is utilized. However, you’ll still have to contribute at least 1% of your own funds for this program.
When you buy a home that needs a little (or a lot of) TLC, the Remodel NY program can help you secure mortgage financing and the funds to help pay for the necessary work.
This program is available under SONYMA’s Low Interest Rate and Achieving the Dream programs at the same interest rate. It may also be possible to combine it with the Homes for Veterans enhancement program.
Eligible home improvement projects include finishing a basement, repairing chimneys, remodeling kitchens and bathrooms, painting or installing new siding, putting in new free-standing appliances or new roofing and flooring, updating plumbing, increasing energy efficiency, or simply fixing health and safety issues.
Financing is available for all home types, ranging from single-family to four-family homes, as well as condominiums and planned developments that include housing.
For more details or eligibility requirements, download this PDF.
Energy Star Labeled Homes Program
To help New York residents find more energy-efficient homes, SONYMA has partnered with the New York State Builders Association (NYSBA), the New York State Energy Research and Development Authority (NYSERDA) and the Long Island Power Authority (LIPA) to offer incentives for buying an Energy Star certified home.
With this program, you can also use a DPAL, and you won’t face the 0.375% interest rate increase that’s common with other SONYMA first mortgages when a buyer signs up for a down payment assistance loan.
Single-family homes and newly constructed two-family homes in designated target areas are eligible for this program.
You can find out more about the Energy Star program’s features and requirements on SONYMA’s website.
More: Use these savings accounts to build up your down payment.
Graduate to Homeownership Program
This program is designed to help recent college graduates buy their first homes in certain upstate New York communities by offering low-interest mortgages, down payment assistance and homebuyer education resources.
Graduate to Homeownership offers competitive 30-year fixed interest rates and can be combined with SONYMA’s other grant and assistance programs like DPAL and Remodel NY.
To qualify for assistance, you’ll have to be a first-time homebuyer who received an associate, bachelor’s, master’s or doctoral degree within the past four years (48 months) from an academic program recognized by the U.S. Department of Education.
You’ll have to prove you have good credit and the ability to make your monthly mortgage payments. The home will have to serve as your primary residence; the income limits to qualify vary by county.
You can find the list of participating communities on SONYMA’s website.
Neighborhood Revitalization Program
Following recent waves of foreclosures, a number of New York communities were left with an inventory of vacant homes. The Neighborhood Revitalization Program aims to offer qualified buyers incentives to buy and restore these houses — which ultimately improves property values across the community, restores community pride and drives long-term sustainable economic growth.
With this program, you could receive up to $20,000 to renovate a qualified home and still seek funds from other lenders to cover additional improvements. The Neighborhood Revitalization Program can be combined with SONYMA’s other programs.
To qualify, the home will have to be in one of the partnering communities. You’ll also need to have a good credit standing and be able to demonstrate that you’re able to make your monthly mortgage payments. Depending on your region, the income limits will vary.
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