First-Time Home Buyer Programs in New York

New York's statewide homebuyer programs come from the State of New York Mortgage Agency, known as SONYMA, which is part of New York State Homes and Community Renewal (HCR). SONYMA offers fixed-rate mortgage programs and optional add-ons for down payment, closing cost and repair help, and you apply for all of them through a participating lender. Eligibility and terms vary by borrower, property and program, so confirm the details with SONYMA and a participating lender.

What SONYMA is

SONYMA is New York's state housing finance agency for homebuyers. It sits within HCR, the state's housing agency, and its homeownership programs are designed to make buying a first home more reachable for New Yorkers, including buyers who are returning to homeownership in some programs.

The most important practical fact: SONYMA does not take loan applications or service loans directly. You work with a lender that participates in SONYMA's programs, and that lender takes your application and closes the loan. SONYMA maintains a directory of participating lenders so you can find one in your area.

SONYMA homebuyer programs by name

SONYMA groups its offerings into core mortgage programs and optional add-on features. Its program pages list the following.

Mortgage programs

• Achieving the Dream Program. A fixed-rate mortgage with flexible down payment options that can be combined with other grants or subsidies.
• Low Interest Rate Program. A fixed-rate mortgage with lower upfront cash requirements, available for several home types, including one- to four-family homes, condominiums, cooperatives and manufactured homes.
• Conventional Plus and FHA Plus Programs. Fixed-rate mortgages that come with down payment and closing cost help for first-time or returning buyers.
• Manufactured Home Loan Program. Financing to buy, refinance or site a manufactured home on owned or leased land.

Add-on features

• Down Payment Assistance Loan (DPAL). An add-on that can be combined with a SONYMA mortgage to help cover the down payment, closing costs or mortgage insurance.
• Repayable Second Lien (RSL) Program. A deferred-payment second mortgage for the down payment, closing costs or mortgage insurance.
• RemodelNY Program. Financing for eligible repairs as part of buying a home.
• Homes for Veterans. Home loans for veterans, active service members and their spouses.
• Graduate to Homeownership. Mortgages and down payment assistance aimed at recent college graduates.

Because the add-ons attach to a SONYMA first mortgage, it helps to think of your options as a combination: one core mortgage, plus whatever add-on features you may be eligible for. Ask your lender to show how each piece is structured, including whether a second lien is deferred and when it would become due.

Income limits, purchase price limits, property rules, target-area rules and available funding can change. Check eligibility and current terms with SONYMA and a participating lender before you build your plans around any one program.

Homebuyer education and counseling in New York

SONYMA partners with nonprofit housing counseling agencies around the state. Those agencies offer online classes, workshops and one-on-one counseling on topics such as money management and credit. Ask your participating lender whether the program you are using requires a homebuyer education course and, if so, which providers are accepted and when the certificate needs to be in your file.

Counseling is useful even where it is not required. HUD-approved housing counseling agencies provide free or low-cost help with budgeting, figuring out how much home you can afford, understanding the mortgage process and preparing for closing. A counselor can also help you compare loan types and choose a lender. HUD's housing counseling locator lists approved agencies.

How to work with a participating SONYMA lender

1. Start with the participating lender directory. SONYMA publishes a list of participating lenders. Not every lender offers SONYMA loans, and those that do may not offer every program or add-on.
2. Bring your goals, not just your numbers. Tell the lender the type of home you want (house, condo, co-op or manufactured home), where you want to buy, and whether you are a veteran or recent graduate. That helps narrow which programs fit.
3. Ask how the pieces fit together. Which core program would you pair with which add-on? How does any second lien work? Does a course need to be completed, and by when?
4. Compare Loan Estimates. Ask for a Loan Estimate on the SONYMA option and on any other loan you are considering so you can compare cash to close, monthly costs and features on the same form.

Any approval is subject to credit approval, property review and program guidelines. A lender can tell you whether you may qualify, but cannot promise eligibility before reviewing your full application.

New York closing items to know about

New York has several taxes tied to recording a home purchase and a mortgage. Your Loan Estimate and Closing Disclosure will show the amounts that apply to your purchase.

Mortgage recording tax

New York State imposes a mortgage recording tax on the privilege of recording a mortgage on real property in the state. It is paid to the recording office of the county where the property is located when the mortgage is recorded. On top of the state tax, New York City, Yonkers and various counties impose their own mortgage recording taxes, so where you buy affects what you owe.

Real estate transfer tax

The state real estate transfer tax applies to conveyances of real property, such as a sale. The seller generally pays the base tax, unless the contract says otherwise or the seller does not pay or is exempt. The transfer is reported on Form TP-584, or Form TP-584-NYC for property in New York City. New York City transfers can also involve separate city-level taxes.

Additional tax on residential property (the mansion tax)

New York also has an additional tax on certain higher-priced residential purchases, commonly called the mansion tax. The buyer pays it. Whether it applies depends on the purchase, so ask your attorney or closing agent early if you are buying near the top of your range.

STAR school tax relief

For owner-occupants, the STAR (School Tax Relief) program can lower the school tax portion of your property tax bill. The home must be your primary residence, and income guidelines apply. If you are applying for STAR on a home you just bought, you register with the NYS Department of Taxation and Finance for the STAR credit; first-time STAR applicants receive the credit rather than the older STAR property tax exemption. Talk to a tax professional about how STAR applies to you.

New York first-time buyer checklist

• Review SONYMA's programs and add-on features on the HCR website.
• Note any that fit you: veteran or service member, recent graduate, manufactured home, or a home that needs repairs.
• Find a lender in SONYMA's participating lender directory.
• Ask whether homebuyer education is required, and consider a HUD-approved counselor either way.
• Gather income, asset, employment and credit documents.
• Ask your attorney or closing agent which recording and transfer taxes apply where you are buying, including any local mortgage recording tax and the mansion tax.
• Compare Loan Estimates side by side.
• After closing, register for the STAR credit with the Department of Taxation and Finance.

Frequently asked questions

Next steps

• First-Time Home Buyer Loans
• New York mortgage overview
• First-time buyer loans in New York
• First-time buyer loans in New York
• First-time buyer loans in Brooklyn
• First-time buyer loans in Queens
• First-time buyer loans in Manhattan
• First-time buyer loans in Bronx
• First-time buyer loans in Buffalo
• First-time buyer loans in Rochester
• First-time buyer loans in Albany
• First-time buyer loans in Staten Island
• First-time buyer loans in Syracuse
• First-time buyer loans in Poughkeepsie
• First-time buyer loans in Yonkers

Sources

• NYS HCR: State of New York Mortgage Agency (SONYMA)
• NYS HCR: SONYMA Programs and Add-On Features
• NYS Department of Taxation and Finance: Mortgage Recording Taxes
• NYS Department of Taxation and Finance: Real Estate Transfer Tax
• NYS Department of Taxation and Finance: STAR for New Homeowners
• HUD: Housing Counseling and You (First-Time Homebuyers)