New York First-Time Homebuyer Programs

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Updated on Wednesday, February 20, 2019

With housing prices as high as the Empire State Building, buying a house in New York may seem out of your grasp. However, if you’re a low or moderate income-earner in New York State, you may qualify for first-time homebuyer programs that will help you into your first home. Many of these programs can be combined to make buying your first home even easier.

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These are the New York State first-time homebuyer programs that you need to know about.

New York first-time homebuyer programs

The State of New York Mortgage Agency (SONYMA) runs most of the first-time homebuyer programs in New York state. Since 1970, it has worked to underwrite mortgages and provide down payment assistance and other incentives to promote homeownership for low and moderate income-earners.

The New York City office of Housing Preservation & Development (HPD) also runs first-time homebuyer programs for residents of New York City.

Eligibility for New York assistance

Most of New York’s homebuyer assistance programs are income-based. That means you must earn less than 150% of the area median income (AMI) (or less in some cases) to qualify for assistance. All of New York’s programs have credit score and debt-to-income (DTI) ratio requirements, but the requirements vary by program.

Achieving the Dream mortgage

Achieving the Dream mortgage is 30-year, fixed-interest-rate mortgage that can be combined with New York’s Down Payment Assistance Loan. The Achieving the Dream mortgage is a conventional mortgage that is only available to qualified low-income households.

Features

  • Thirty-year fixed-interest-rate mortgage.
  • Interest rates set at 4.35% or 4.75%, with down payment assistance.
  • Only 1% borrower cash contribution required (3% for cooperative apartments or three- to four-unit homes).
  • 3% down payment for most homes, 5% for cooperative apartments, and 10% for three- to four-unit properties.
  • Up to four units.
  • Down payment assistance up to $15,000 (3% of home purchase price).
  • Housing DTI ratio up to 40%.

Eligibility

  • No minimum credit score, but borrowers need at least three open lines of credit (such as a credit card, auto loan or student loan). All three credit lines must have 18 months of on-time payment history in the last 24 months.
  • First time homebuyers, military veterans and borrowers in special-exception areas only.
  • Two years of employment history.
  • Total DTI ratio less than 45%.
  • Must earn less than program income limits. Income limits vary by household size and neighborhood. (An example limit is $100,120 for a two-person household in New York City).
  • House must have a purchase price less than program-price limits. Price limits vary by household size and neighborhood. (An example limit is $279,520 for a single-family home in Albany).
  • Must complete a homebuyer education course.
  • Must occupy house as primary residence.

How it works

First-time homebuyers interested in the Achieving the Dream mortgage should reach out to participating lenders through the SONYMA website. These lenders will help potential buyers find an appropriate homebuyer education course. They will also help borrowers prequalify for a home mortgage. Once you prequalify for an Achieving the Dream mortgage, you can shop for houses with the help of your real estate agent.

Low Interest Rate Mortgage Program

SONYMA’s Low Interest Rate Mortgage Program offers fixed-rate mortgages to qualified low- and moderate-income homebuyers. Like the Achieving the Dream mortgage, the Low Interest Rate Mortgage may be combined with New York’s Down Payment Assistance Loans of up to $15,000.

Features

  • Thirty-year fixed-rate mortgage
  • Interest rates set at 4.75% or 5.125% with down payment assistance.
  • Only 1% borrower cash contribution requirement (3% for cooperative apartments and three- to four-unit properties).
  • Three percent down for most properties (5% for cooperative apartments and 10% for three- to four-unit properties).
  • Down payment assistance up to $15,000.
  • Housing DTI ratio up to 40%.

Eligibility

  • No minimum credit score, but borrowers need at least three open lines of credit (such as a credit card, auto loan or student loan). All three credit lines must have 18 months of on-time payment history in the last 24 months.
  • At least 1% of purchase price must come from borrower’s personal funds.
  • First-time homebuyers, eligible military veterans or borrowers in special-exception zones.
  • Two years of employment history.
  • Total DTI ratio less than 45%.
  • Must earn less than program income limits. Income limits vary by household size and neighborhood. (An example limit is $125,160 for a two-person household in New York City).
  • House must have a purchase price less than program price limits. Price limits vary by household size and neighborhood. (An example limit is $279,520 for a single-family home in Albany).
  • Must complete a homebuyer education course in most cases.
  • Must occupy house as primary residence.

How it works

To apply for a Low Interest Rate Mortgage, look for participating lenders through the SONYMA website. Lenders will help you determine whether you need to complete a homebuyer education course. The lender will also help you prequalify for a mortgage and Down Payment Assistance Loan, so you can start shopping for your new home.

Down Payment Assistance Loan Program

The Down Payment Assistance Loan is a 0% interest rate second mortgage. After 10 years of occupying a home as a primary residence, the loan is forgiven. Borrowers who take out a mortgage through one of SONYMA’s special mortgage programs qualify for this loan.

Features

  • 0% interest rate
  • No monthly payments required
  • Loan forgiven after 10 years
  • Maximum loan of $15,000 (3% of home purchase price)

Eligibility

  • Only available to SONYMA mortgage borrowers.
  • Minimum cash contribution of 1% (or 3% for apartment cooperatives and three- to four-unit properties).

How it works

The Down Payment Assistance Loan is only available to SONYMA borrowers. To apply for this loan, look for participating lenders on the SONYMA website. When you speak with the lender, mention that you want to apply for a Down Payment Assistance Loan. The lender will help you prequalify for both the down payment program and a qualifying mortgage.

RemodelNY

Looking to buy a New York home that’s in need of some major repairs? The RemodelNY mortgage allows first-time homebuyers to purchase a home that needs at least $1,000 in repairs. If you’re a licensed contractor in New York, you may even be allowed to do the repairs yourself.

Features

  • Thirty-year fixed-rate mortgage
  • Interest rates ranging from 4.35-5.125% (depending on whether you qualify for Achieving the Dream or the Low Interest Rate Mortgage Program)
  • Can be used with Down Payment Assistance Loans up to $15,000

Eligibility

  • At least $1,000 of required repairs.
  • Home renovation contract must be included in loan application.
  • Only one- to two-unit homes or certain condominiums.
  • No minimum credit score, but borrowers need at least three open lines of credit (such as a credit card, auto loan or student loan). All three credit lines must have 18 months of on-time payment history in the last 24 months.
  • At least 1% of purchase price must come from borrower’s personal funds.
  • First-time homebuyers, eligible military veterans or borrowers in special-exception zones.
  • Two years of employment history.
  • Total DTI ratio less than 45%.
  • Must earn less than program income limits. Income limits vary by household size and neighborhood. (An example limit is $125,160 for a two-person household in New York City).
  • House must have a purchase price less than program price limits. Price limits vary by household size and neighborhood. (An example limit is $279,520 for a single-family home in Albany).
  • Must complete a homebuyer education course.
  • Must occupy house as primary residence.

How it works

To apply for a RemodelNY mortgage, you’ll need to work with a SONYMA participating lender. SONYMA warns that not all lenders issue rehabilitation mortgages, so you will need to ask specifically about the RemodelNY program. Once you prequalify with a participating lender, you’ll have to get a home improvement contract from a certified contractor.

Neighborhood Revitalization Program

The Neighborhood Revitalization Program is a 0%-interest forgivable loan worth up to $20,000. It’s an incentive to help low- and moderate-income homebuyers purchase vacant homes in areas that were hit hard by the housing crisis. The property renovation incentive can be combined with SONYMA’s 30-year mortgage programs and its Down Payment Assistance Loans.

Features

  • Up to $20,000 in property renovation
  • 0% interest rate
  • No monthly payments
  • Loan forgiven in 10 years
  • Can be used with Down Payment Assistance Loan
  • No purchase price limits
  • Minimum of 1% borrower contribution for one- to two-unit properties (3% for properties over $500,000)
  • Minimum of 3% borrower contribution for three- to four-unit properties (5% for properties over $500,000)
  • Up to $500 of homebuyer counseling fee is reimbursed

Eligibility

  • Property must be in one of the following counties: Albany, Bronx, Broome, Dutchess, Erie, Kings, Monroe, Nassau, New York, Onondaga, Orange, Queens, Rensselaer, Richmond, Schenectady, Suffolk or Ulster.
  • Must qualify for a SONYMA mortgage.
  • Must complete face-to-face counseling from a HomemartNY member counseling agency.
  • Must earn less than 150% of your market’s median income.
  • Must include a renovation contract prior to closing.

How it works

To qualify for this mortgage, you must be under contract to buy a vacant home in one of the eligible communities. Once you’re under contract, you can apply for a mortgage from a SONYMA lender. Be sure to ask about the Neighborhood Revitalization Program because some lenders may not issue rehabilitation loans. During the application, you may need to submit a home improvement contract from a U.S. Department of Housing and Urban Development (HUD)-approved contractor.

Conventional Plus Mortgage

This conventional mortgage is loan that can be used in conjunction with SONYMA’s Down Payment Assistance Loan. This mortgage has lower private mortgage insurance (PMI) requirements than other conventional loans, so it may be less expensive than other mortgages.

Features

  • Thirty-year fixed-rate mortgage (5.125-6.125% with no points)
  • Can be combined with down payment assistance programs
  • Applies to one- to four-unit residences
  • Minimum 3% down payment
  • No minimum cash contribution from borrower (for single-family homes)
  • Lower mortgage insurance requirements compared with other conventional mortgages

Eligibility

  • 620 credit score
  • Maximum loan $484,350 for a single-family home
  • Must earn less than program income limits ($99,360 in Albany)
  • Maximum total DTI ratio of 50%
  • One borrower must complete a homebuyer education course

How it works

Only certain lenders in New York are eligible to issue the Conventional Plus Mortgage. The best way to find a participating lender is to use the SONYMA participating lender resource sheet. When you find a lender, be sure to ask them about the Conventional Plus Mortgage, and they will explain how to prequalify for the mortgage. Part of the prequalification process will be to complete a homebuyer education course.

FHA Plus Mortgage

SONYMA issues an FHA Plus Mortgage, which is underwritten by the Federal Housing Administration (FHA). This mortgage has fixed interest rates, and can be combined with a Down Payment Assistance Loan.

Features

  • Fixed-interest-rate mortgage (5.75% with no points)
  • Can be combined with down payment assistance
  • Borrower only has to contribute 1% toward down payment
  • Minimum of 3.5% down

Eligibility

  • 640 credit score.
  • Total DTI ratio of 50%.
  • Minimum down payment of 3.5% required (down payment assistance allowed).
  • Loan limits vary by county. The maximum loan amount in any county is $453,100 for a single-family home.
  • At least 1% must be from borrower’s personal funds.

How it works

To apply for this mortgage, reach out to any of the participating lenders on SONYMA’s website. The lenders will let you know how to apply at their banks. However, before you commit to the FHA Plus Mortgage, compare it with the Conventional Plus Mortgage or other loans. The FHA Plus Mortgage has an upfront mortgage insurance fee (1.75% of the loan price), which can dramatically increase the cost of the loan.

Graduate to Homeownership

The Graduate to Homeownership program is a first-time homebuyer program that’s available to people who have earned an Associate’s, Bachelor’s, Master’s or Doctorate degree in the last 48 months. The program is available in the downtown cities of Upstate New York. Homebuyers can combine the mortgage with New York’s Down Payment Assistance Loan.

Features

  • Borrower contribution as little as 1%
  • Minimum down payment of 3%
  • 30-year fixed interest rate (Currently 4.375%)
  • Can be combined with down payment loans
  • No minimum credit score

Eligibility

  • Must be a first-time homebuyer.
  • Must have earned degree in previous 48 months.
  • Home must be in selected cities in Upstate New York.
  • Housing DTI ratio less than 40%. Total DTI ratio less than 45%.
  • Must earn less than program income limits. Income limits vary by city and household size. An example limit is $77,800 for a one-person household in Buffalo).
  • Homebuyer education course required.

How it works

Recent grads can apply for a Graduate to Homeownership mortgage through SONYMA’s participating lenders. Lenders can help you find a homebuyer education course through HUD or a qualified private mortgage insurer. Once you complete the course, you can finish applying for a loan and buy a house in qualified communities.

HomeFirst Down Payment Assistance

New York City offers up to $40,000 in down payment assistance to people earning less than 80% of the AMI. The down payment assistance is a 0%-interest loan that is forgiven in 10 years. Borrowers don’t have to make payments on the loan unless they move out of the property.

Features

  • Up to $40,000
  • Loan completely forgiven after 10 years
  • No monthly payments
  • 0% Interest
  • Can be combined with FHA or conventional mortgages
  • Covers 100% of closing costs and up to half of a down payment

Eligibility

  • Must earn less than 80% of the AMI, based on your family size. ($66,800 for a two-person household).
  • Home price must be less than price limits. Limits vary by borough ($464,000 for a single-family home in Queens).
  • Minimum credit score of 620 in most cases. A 580 credit score may be permitted when combined with an FHA mortgage.
  • At least 1% of down payment must come from borrower’s personal funds.
  • Must occupy home as your personal residence for 10 years.

How it works

If you take out this loan, you won’t have to make payments on it unless you move out of the house. People who move out of the home in the first five years must repay the principal balance of the loan. Between years six and 10, 20% of the loan balance is forgiven each year, as long as you remain in the home. After 10 years, the entire loan is forgiven.

Borrowers who meet the income and credit requirements can apply for the loan by attending a counseling session at one of the HPD-approved counselors. A list of counselors is available at the bottom of the HPD Down Payment Assistance webpage.

After attending a counseling session, you’ll receive a certificate of eligibility that is good for six months. The housing counselor also will refer you to a participating lender. At that point, you can start shopping for eligible properties.

City-Sponsored Homeownership

New York City’s sponsored communities help low- and moderate-income people buy condos or apartments that they can afford. As new buildings are developed, homebuyers can apply to buy a limited number of spots in these buildings.

Features

  • Purchase price may be subsidized. Units may be available for less than $200,000.
  • Moderate-income families can afford the monthly costs.
  • Just 3% down payment required.

Eligibility

  • Must earn income within program limits. (One program requires three-person households to earn between $69,174 – $103,290, for example).
  • Home must be part of a participating community.
  • Must have fewer assets than program’s requirements.

How it works

Each building that is part of New York City’s sponsored homeownership program has its own application. To find out about available offerings, you can review the offerings on the HDP’s website. Requirements and information about each building’s application process are available in the postings published on the site. You may be able to combine this program with New York State’s other programs.

National first-time homebuyer programs

New York State has many first-time homebuyer programs, but most of these programs are only available to low- or moderate-income earners. If you’re a higher income-earner, you still have options. LendingTree’s guide to national first-time homebuyer programs can help buyers at every income level buy a home.

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