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New York is one of the costliest states in which to buy a residence in the U.S., with the median listing price for a home at $380,000. High prices definitely make it challenging for first-time homebuyers to find something they can afford. In response, the state of New York has created programs that address a wide variety of needs and circumstances for first-time homebuyers.

Here’s an overview of programs that can help you purchase a home in the Empire State.

State of New York Mortgage Agency (SONYMA)

SONYMA offers several types of assistance programs for first-time New York state homebuyers — everyone from college grads to DIYers who need support restoring a home can find help.

SONYMA defines first-time homebuyers as people who haven’t owned a primary residence in three years and who don’t currently own second homes here or abroad.

Down Payment Assistance Loan (DPAL)

The DPAL program offers eligible borrowers down-payment assistance via a second mortgage, provided you use it in conjunction with a current SONYMA program (see program information below). Borrowers can also use these funds to pay for any applicable mortgage insurance premiums.

All borrowers are required to make a down payment. The minimum contribution is 1 percent for single-family homes.

Regardless of the SONYMA program for which you apply, borrowers must make a minimum cash contribution of 1 percent of the value of the property or 3 percent for cooperatives and 3- and 4-family dwellings.

DPAL borrowers pay no interest or monthly payments. The main attraction is that the loan is forgiven after 10 years if the borrower keeps SONYMA funding in place and lives in the home.

Program features:

  • There’s no interest.
  • There are no monthly payments.
  • The loan is forgiven after 10 years (conditions must be met).
  • It may be used to pay for a one-time mortgage insurance premium.
  • The minimum loan is $1,000; the maximum is $3,000 or 3 percent of the home purchase price (up to a maximum of $15,000).

Conventional Plus

The Conventional Plus Program is practically a one-stop shop for mortgage options. It’s designed for borrowers who need help qualifying for a 30-year fixed rate mortgage as well as those who need down-payment assistance. Additionally, existing homeowners can use this program to refinance their house.

Eligible borrowers will get low interest rates and no loan-level price adjustments. Loan-level price adjustments are extra fees lenders include on mortgages to offset risk factors like a low credit score and loan-to-value ratio. Conventional Plus is available for first-time homebuyers and previous homeowners.

Program features:

  • There’s no interest.
  • There’s no loan-level price adjustment.
  • You can use it to refinance your house.
  • The mortgage insurance coverage requirements are reduced.
  • You can combine this program with DPAL.

 

FHA Plus

Both first-time and previous homebuyers can take advantage of FHA plus, which allows borrowers to combine down-payment assistance with an FHA loan.

Program features:

  • Borrowers can get up to 97 percent financing for single-family homes up to $453,100.
  • The purchased house must be the borrower’s primary residence.
  • Refinancing options are available to eligible borrowers.

Homes for Veterans

SONYMA and the New York State Department of Veterans’ Affair have teamed up to help U.S. military veterans as well as military personnel buy a home through low-cost financing. Eligible borrowers can get up to 97 percent financing and a competitive rate with no points or origination fees added.

Program features:

  • If you’re currently active duty or you were discharged from your duties (not including dishonorable discharge), then you don’t have to be a first-time homebuyer to be eligible.
  • First-time homebuyers who are U.S. military personnel stationed in New York, National Guardsmen and reservists are eligible for the program.
  • There are no points or origination fees.
  • Borrowers can get competitive rates.
  • Financing is available for up to 97 percent of the purchase price.
  • It can be used in conjunction with a down-payment assistance program.
  • There is a minimum borrower contribution of 1 percent.

Achieving the Dream

For low-income first-time homebuyers, the Achieving the Dream program provides access to low-cost, low down-payment mortgage financing. Borrowers must meet certain credit, employment history, income and savings requirements to qualify.

Program features:

  • There are no points or origination fees.
  • Borrowers can get competitive rates.
  • Financing is available for up to 97 percent of the purchase price.
  • It can be used in conjunction with a down-payment assistance program.
  • There is a minimum borrower contribution of 1 percent.
  • It comes with a 120-day rate lock for existing housing; or a 240-day for property under construction.

RemodelNY

If the idea of buying a fixer-upper is exciting to you, then you’re in luck. RemodelNY provides financing to first-time homebuyers who purchase homes that need some TLC. Borrowers can receive financing for both the renovation and the purchase of the home.

Although you won’t be able to pay for luxury upgrades under this program, it does cover a wide range of repairs. These repairs include everything from structural reconstruction, updates that improve the home’s functionality and eliminating safety hazards to fixing in-ground pools and landscaping.

Program features:

  • First-time homebuyers include people who haven’t owned a home in three or more years.
  • It can be combined with other SONYMA programs.
  • Borrowers can get financing of up to 97 percent of the “after improved” appraised value or purchase price plus eligible repairs.
  • Financing includes $1,000 minimum eligible repairs with no maximum repair amount.

Neighborhood Revitalization

The Neighborhood Revitalization program packs a big punch. People can apply for financing to buy or renovate homes in designated areas. Borrowers must use the home as the primary residence. Additionally, there are credit, income and employment requirements to qualify.

The income limits are relatively high, making this program accessible for more buyers. For example, in Nassau County, a household of one or two people can make up to $210,000.

Program features:

  • Buyers can get up to $20,000 for renovation costs.
  • You can roll home improvement financing into your mortgage.
  • It can be combined with other assistance programs.

Graduate to Homeownership

Upstate New York college graduates can get help securing an affordable mortgage with their diploma thanks to the Graduate to Homeownership program. If you’re a first-time homebuyer who graduated within the last 48 months with an associate’s, bachelor’s, master’s or doctorate degree and make under the maximum income allowance, then you might be eligible for this program.

Buyers must also occupy the home they purchase with these funds. There are restrictions on where buyers can purchase their home to qualify, so be sure to check the approved areas.

Program features:

  • It can be combined with the Down Payment Assistance Loans (DPAL) program.
  • Borrowers can get up to 97 percent of financing available for homes, manufactured homes, and condominiums under $453,100.
  • Borrowers must undergo credit, employment and income checks to determine whether they meet the program’s requirements.
  • Financing is available for home purchases in the following communities:
    • Capital Region
    • Hudson Central New York
    • Cortland Finger Lakes
    • Batavia Mid-Hudson
    • Kingston Mohawk Valley
    •  Rome North Country
    • Watertown Southern Tier
    • Watkins Glen Western New York
    • Olean

Get started

If you’ve found a program that fits your needs, you could be on the path to homeownership. SONYMA doesn’t issue loans or make application decisions. However, it has vetted a list of approved lenders you can reach out to. Generally, lenders have their own borrowing requirements, and interest rates vary. Shop around with a few different companies to ensure you’re getting the best deal.

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