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Homeownership might be within your reach, even if you don’t have a large down payment. Learn which programs can help you buy your first home in New York.
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The average home value in the state of New York, according to Zillow, is about $441,500. That’s significantly less than the average home value in California ($743,362), but higher than the average home value in the U.S., which is currently $348,900.
Fortunately, New York offers numerous programs to first-time home buyers through the State of New York Mortgage Agency (SONYMA), as well as others not associated with that agency. Some of these are grants (read: free money), while others are second mortgages. Below we’ll take a closer look at four of the most significant SONYMA programs and help you find one that’s right for you.
1. Achieving the Dream
What is it? A program that can reduce the interest rate on a 30-year mortgage and lower your down payment requirement to 3%.
How does it help? The reduced interest rate can make your monthly mortgage payments more affordable. In addition to a lower down payment requirement (just 3% of the property’s value), Achieving the Dream only requires 1% to be your own funding. The other 2% can come from down payment assistance.
Who’s it for? First-time home buyers who meet the low income limits for their region (which you can find here).
2. Neighborhood Revitalization Program
What is it? A statewide program that gives home buyers $20,000 to make necessary renovations to a home in disrepair.
How does it help? The program gives home buyers a major incentive to buy and renovate distressed properties. In addition to $20,000 for necessary repairs, the program also offers home buyers up to 3% of the home’s purchase price in down payment assistance up to a maximum of $15,000.
Who’s it for: Home buyers who meet income requirements (the same as those under Achieve the Dream). You must also have good credit, stable income, and are buying a primary residence in New York.
3. Conventional Plus Program
What is it? A mortgage program that lowers the requirements for a 30-year mortgage while also offering down payment assistance.
How does it help? The program has flexible underwriting, which can help more borrowers qualify for conventional loans. The down payment assistance can be used for closing costs or to pay mortgage insurance.
Who’s it for: You must purchase a primary residence, and your income must be less than 80% of the area’s median income (which you can find here).
4. Low Interest Rate Program
What is it? A mortgage program that offers competitively low interest rates to home buyers and lowers the down payment requirement to 3%.
How does it help? A low interest rate can reduce your monthly mortgage payment. The program also offers down payment assistance up to 3% of the home’s purchase price for eligible home buyers (but the interest rate on your loan might be higher).
Who’s it for: This program is great for home buyers whose income is above the limits for the Achieving the Dream program mentioned above. If your income is below those limits, however, you might get a lower interest rate with Achieving the Dream (you can check interest rates here)
More ways to save on your first home
In general, the best ways to save on your first home are to save a larger down payment and improve your credit score. The larger your down payment, the more likely you can get a low interest rate on your mortgage. Plus you can avoid having to pay for private mortgage insurance (PMI) when your down payment exceeds 20% for conventional loans. Likewise, a high credit score can help you snag a lower interest rate. If neither of those are viable options, the programs mentioned above can put homeownership within reach without making you settle for an unreasonably high mortgage rate.
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