First-time home buyer programs in New York are programs meant to help new homebuyers purchase their first home. Below we outline the first-time home buyer programs in NYC and NY State, from grants to SONYMA mortgage loans.
Buying a home in New York City is expensive, and many first-time homebuyers can have trouble saving for a down payment and other closing costs. However, first-time buyers’ grants make buying a home in New York possible and affordable for those buyers who qualify. These programs can help first-time homebuyers with down payment and closing costs. Various types of first-time home buyer grants are available through multiple entities, city agencies, and nonprofits.
Typically, if you comply with the terms of the grant, the money doesn't have to be repaid.
Buying a home for the first time requires the marriage of several moving parts. Even seasoned homebuyers can find the process to be daunting. Knowing basic vocabulary and terminology can greatly aid in easing the anxious first-time buyer. Here is a helpful GLOSSARY OF TERMS to reference as you move forward:
REALTOR OR REAL ESTATE SALESPERSON - Realtors, or real estate salespeople are integral to the homebuying process, and they serve as your guide to your area’s housing market. Agents will show you listings that fit your specific needs, and often have access to homes that may not even be listed on the market yet. A real estate salesperson is your unique personal shopper when it comes to home listings.
ANNUAL PERCENTAGE RATE - An APR is the standardized method of showing you the total cost of borrowing money. An APR is the combination of the interest rate charged by your creditor, in addition to any fees you may be charged for. These fees are usually presented in percentages, and will be added to the interest rate to give you the total of your APR.
APPRAISAL - An appraisal is a document that contains the estimated value of a home. These are professional opinions of the market value of a property and can often help you determine if a home’s value is appropriately reflected in an asking price.
CONVENTIONAL LOAN - There are a variety of different loans and mortgages available for homebuyers. However, a conventional loan is usually the route most first-time homebuyers will take. A conventional loan will typically require a 3 to 20 percent down payment. They are not typically advisable for people with low credit scores. Conventional loans are not guaranteed by a government agency, and require private firms to administer them.
CREDIT SCORE - What exactly is a credit score? In terms of homebuying, a credit score helps potential loan officers determine the risk level of providing a mortgage to a potential client. These scores are calculated using a formula that assesses your comprehensive credit history. The higher your credit score, the more likely you are to have better options as a homebuyer.
CLOSING AND CLOSING COST - First time homebuyers may be surprised to discover there are often closing costs associated with the completion of a sale. These fees may be related to insurance fees, survey fees or attorney’s fees (if applicable). These costs will vary from location to location. Be mindful of these fees before putting an offer on a home, to ensure you have the extra funds to cover any surprise costs.
Closing is the fun part! Closing means the home is now yours, and a deed will be given to you once all necessary documents have been verified and approved. The home is now in your name, and you can begin the move in process.
DOWN PAYMENT - A down payment is a portion of the sales price you will be required to pay the seller in order to close a sale. The down payment must be paid at the time of settlement (closing). Purchasing a home does not require the entire sale price be provided upfront. This is where your mortgage payment will come into play.
HOME INSPECTION - A home inspection is a close physical examination of a property. It is usually not recommended to get a home inspection unless you are a serious buyer or have already put an offer on a home. Home inspections determine the functionality of plumbing, electrical units, heating and cooling systems, appliances, structural stability, etc. Home inspections occur before the purchase of a home if finalized.
LENDER - A lender is the financial institution or private agency that is responsible for your loan.
MORTGAGE BANKER - An individual, firm or company that originates, sells and/or services loans secured by mortgages on property.
MORTGAGE BROKER - A mortgage broker is a loan provider who serves as a liaison between the borrower and the lender. Hiring a broker can help ease some of the anxiety that comes with applying for major loans. Brokers can work for firms or independently.
NET INCOME - Your net income helps determine your financial standing when applying for a mortgage. Net income is your after- tax pay and is the money you receive after all tax withholdings have been deducted from your gross income. Net income allows lenders to gauge your viability as a potential homeowner.
OFFER - An offer is your bid on a home that you are interested in purchasing. Offers are almost always the exact asking price or a lower value. Once you place an offer, depending on the value, you may enter a negotiation process with the seller. A seller will either accept the offer, negotiate a value somewhere in between your offer and the asking price, or decline the offer entirely.
PRE-APPROVAL VS. PRE-QUALIFICATION - These terms are closely related but still have a few fundamental differences. Pre-Qualification is essentially a less formal version of a pre-approval process. Pre-qual asks for estimated information that you will give to your mortgage broker that helps them determine if you are a viable candidate. If you get pre-qualified, getting pre-approval is the next step. Pre-approval is far more involved and will require verified documentation of your financial history. Pre-approval is not necessarily required for homebuyers to have, however it is strongly advised, as not being pre-approved by a reputable bank or broker will significantly hurt your chances of closing on a home.
FEELING OVERWHELMED? Not to worry, you will not be expected to know everything about the buying process up front. Buying a home takes time and patience. Don’t be afraid to ask Johnny and your real estate team any questions; that’s what they’re there for!
The best first-time home buyer program in NYC is the Housing Opportunities Foundation. The program is available through the New York State Association of Realtors and the Community Foundation. This grant program offers $2,000 to help first-time homebuyers cover their down payment and closing costs. The grant is a gift, and there's no obligation to repay it if you are awarded the grant. Only those who are working with a real estate agent are eligible for the Housing Opportunities Foundation Grant. These grants are awarded through a monthly lottery for those applicants who qualify.
The HomeFirst program provides up to $40,000 in assistance for down payment or closing costs. The program offers assistance in the form of a forgivable loan. The loan is forgiven if the buyer occupies the home for ten consecutive years. The property must be located within New York City and can be a one-to-four-unit family home, condominium, or a cooperative apartment. Buyers must be able to contribute some money toward the purchase to qualify for assistance.
The NeighborhoodLIFT program provides up to $20,000 in support for down payments to all buyers (not just first-time homebuyers). To qualify for assistance, the property must be located in Brooklyn, the Bronx, or Queens. The program offers assistance in the form of a five-year forgivable loan. A percentage of the loan is forgiven each year that the buyer occupies the home. If the buyer moves before the five-year mark, any remaining balance of the loan is due immediately. All applicants must take an approved homebuyer education course.
Only homes located in Brooklyn qualify for this grant program, which offers up to $20,000 in assistance. The assistance is provided by the New York State Homes and Community Renewal (HCR) agency. This grant is only available to first-time homebuyers who must also be able to contribute some of their savings towards the downpayment and closing cost.
Every grant will have its own terms and eligibility requirements. However, in general, most homeowner programs require that the applicant be:
If New York residents are unsuccessful with grants or federal programs, they can explore additional programs provided by New York State's Mortgage Agency “SONYMA.” The following programs are offered for New York state first-time home buyers. Typically, the first-time buyer requirement is waived if you are a military veteran purchasing a home in a federally designated “target area” (i.e., economically disadvantaged neighborhoods).
The Achieving the Dream Program is geared towards first-time homebuyers who have low incomes. Buyers will receive reduced interest rates and a lower down payment on a 30-year loan. The mortgage can be used to purchase and renovate a one or two-family home.
The Convention Plus Program packs a lot of benefits into one mortgage program. This loan offers a lot of attractive features into one program. It's a 30-year loan program that offers down payment assistance available to a first-time buyer or existing homeowners. There is down payment assistance available to use on closing costs so that the buyer can avoid costly mortgage insurance.
Lower-to-moderate-income home buyers are offered low rates through SONYMA's Low-Interest Rate Program.
This program allows veterans and active-duty U.S. military personnel to buy a home in New York, even if it's not their first home. The loans provide favorable financing terms, interest rates, and down payment assistance.
If you are a teacher, administrator, staff, or school employee and have not owned a home in the past three years, you are eligible to participate in the Teacher Next Door ® First Time Home Buyer Program. Through this program, all teachers and school employees may purchase ANY home on the market. Plus, you may be eligible for the Teacher Next Door Grant and additional down payment assistance for school employees. Our Teacher Next Door Program Specialist may also discuss your eligibility for certain state specific grant programs, if available, that may provide additional benefits.
RemodelNY combines a purchase and renovation mortgage into one program. This is especially helpful for first-time buyers and existing owners who want to purchase a fixer-upper.
The Neighborhood Revitalization Program is designed to revitalize distressed communities. The program provides cash and mortgage finance assistance to help homebuyers purchase and renovate homes (one to four-family dwellings) in eligible communities. (e.g., the Bronx, Queens, Staten Island, Queens).
The FHA Plus Program combines the SONYMA's down payment assistance program with an FHA mortgage. Notably, the FHA Plus Program is available to both new home buyers and existing homeowners.
The Graduate to Homeownership Program is marketed towards new college graduates. The programs offer down payment assistance and favorable interest rates. Buyers must be looking to purchase their first home in New York communities scheduled for downtown revitalization.
SONYMA offers down payment assistance loans, which can be combined with any of their mortgage programs. Essentially the down payment is set up as a second mortgage. No monthly payment and no interest is charged on the loan, and it is forgivable after ten years if the borrower maintains their SONYMA financing and continues living in the property during that time. The maximum down payment assistance is $3,000 or 3% of the loan value (up to $15,000).
The lender you choose to work with may have additional requirements beyond the requirement stated by the SONYMA program. So, if you're interested in any of SONYMA's programs, it’s best to get on the phone and start talking to your lender about your options. You can also get the full details on the various SONYMA's programs on SONYMA's website here.
On a national level, buyers should first check with the Federal Housing Association (FHA) to figure out what programs they qualify for. Specifically, the FHA has various programs to help buyers with a down payment! Additionally, the Department of Housing and Development is another organization that has many programs in place to allow first-time buyers to be able to buy their very own home and get over the hurdles of down payment costs.
Most first-time homebuyers have heard of an FHA loan, as this is one of the best lending options for first-time homebuyers who may have lower credit scores. If approved for an FHA loan, the buyer makes a down payment as low as 3.5%. The FHA will insure loans for buyers who have credit scores as low as 500, but they require a 10% down payment. The only downside to an FHA is that the loan requires mortgage insurance, which must be maintained throughout the life of the loan and cannot be canceled.
Passed in 2003, geared towards minorities and low-income families, the American Dream Down Payment Initiative grants eligible first-time homebuyers as much as $10,000 in down payment and closing cost assistance.
Although not yet passed, Congress has been debating the Down Payment Toward Equity Act which would provide a $25k first-time homebuyer grant to many Americans purchasing their first home. A related bill that would likely be passed at the same time would provide a $15,000 tax credit to first-time home buyers who meet specific requirements.
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Johnny Jones JR Keller Williams New York City
License #10401369130
Johnny Jones JR Keller Williams NYC
License #10401369130
Johnny Jones JR. | License: 10401369130] Licensed Real Estate Salesperson at Keller Williams NYC
99 Park Avenue, 10th Floor, New York, NY 10016 Cell: 212.920.0596
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