If you’re a first-time buyer on the hunt for a home in New York City, it can feel like the deck is stacked against you. Prices in the city are almost three times higher than the national average, according to StreetEasy. In the last decade, the median sale price of a New York City home nearly doubled, from $383,699 in the first quarter of 2010 to $675,000 in the third quarter of 2019. And it takes the average first-time buyer in New York much longer to save up for a down payment than in other parts of the country.
But there are several city, state, and federal programs that aim to help new buyers in New York City take the crucial steps toward owning a home. There are also a ton of educational programs and online courses to help you understand and navigate the process.
New York City’s Department of Housing Preservation and Development (HPD)’s lending program offers qualified individuals up to $40,000 toward their down payment or closing costs. To be eligible, New Yorkers need to complete a homebuyer education course taught by an HPD-approved agency, live in the home for at least 10 years, have their own savings to contribute, and have a household income of up to 80 percent area median income, among other things.
New York State’s Division of Housing and Community Renewal, through its mortgage agency, State of New York Mortgage Agency (SONYMA), offers low-interest mortgage loans for first-time homebuyers.
“Achieving the Dream,” one of SONYMA’s main programs, offers the lowest interest rates and a down payment requirement as low as 3 percent, along with a 30-year fixed-rate mortgage. To be eligible, first-time buyers must have a credit history that shows “willingness to make payments on time,” and meet the income requirements, which in New York City is up to $102,430 for a one- to two-person household. The home must also be intended as a primary residence.
SONYMA also has another program that offers competitive interest rates and low down payment requirements to those who qualify, and are looking to buy one- to four-family homes program. To qualify in New York City, a one to two-person household should make no more than $128,040/year—a higher income limit than “Achieving the Dream”—have good credit, and have a two-year record of a reliable source of income, among other things.
“Homes for Veterans” is an add-on feature that’s available exclusively to veterans, active service members, and their spouses. It offers down payment assistance loans for up to $3,000 or 3 percent of the home’s price (whichever is higher, or up to $15,000). It also allows a cash contribution of minimum 1 percent, while the other 2 percent can come from another SONYMA-accepted source. Veterans don’t have to be first-time homebuyers to apply to the program.
The Federal Housing Administration (FHA) also offers loans for first-time homebuyers. According to SmartAsset, their loans program is ideal for individuals with low credit scores and low to moderate incomes; and it’s one of the most popular programs in New York. Buyers can qualify for an FHA loans with a FICO credit score of at least 500.
Fannie Mae’s HomePath’s Ready Buyer program offers first-time homebuyers the chance to take an online course on home-buying and get up to 3 percent closing cost assistance when purchasing a foreclosed HomePath property.