The biggest barrier to home ownership is often coming up with the cash for a down payment. The good news is that there is assistance at both the city and state level. We’ve compiled a list of homebuyer assistance programs and down payment assistance programs available to New Yorkers.
NYC down payment assistance programs
Run through the NYC Department of Housing Preservation and Development (HPD), the HomeFirst programs is designed for first-time homebuyers looking to purchase a home within the five boroughs. It provides a forgivable loan up to $40,000 to be used for the down payment or closing costs. Buyers will need to complete an homebuyer education course approved by HPD, have some savings for the down payment and meet certain income requirements.
- Can be used to purchase a 1-4 family home, a condominium, or a cooperative for owner-occupancy in one of the five boroughs of NYC.
- Home must pass a Housing Quality Standards (HQS) inspection before purchase.
- Buyers must live in the home for at least 10 years.
- Buyers must have a household income up to 80% of the area median income (AMI).
The Neighborhood Housing Services of New York City (NHSNYC) offers several services aimed at helping New Yorkers become more financially literate. Their NeighborhoodLift program not only provides help with the down payment, but also gives buyers access to homebuyer education materials and hosts financial empowerment workshops. The NeighborhoodLift program offers up to $20,000 in down payment assistance for qualified participants. Unlike other programs, NeighborhoodLift is not limited to just first-time buyers.
- Offers payment assistance for owner-occupied detached homes, townhouses, condos, 1-4 unit property or Planned Unit Development located in Brooklyn, Bronx or Queens.
- Program includes homebuyer education to prepare financials for homeownership.
- Program is not limited to first-time homebuyers.
- Program administered in collaboration with Wells Fargo and NeighborWorks® America.
New York State homebuying assistance programs
The State of New York Mortgage Agency (SONYMA) offers a myriad of programs aimed at first-time homebuyers. For these programs SONYMA considered you a first-time buyer if you haven’t owned a primary residence during the past three years. These loan programs have the benefits of low interest rates and more flexibility for those who might have lower credit scores. For all SONYMA loan programs, you must make a minimum cash contribution of 1% of the value of the property or 3% for cooperatives).
- FHA Plus Program
- Achieving the Dream
- Low Interest Rate
- Conventional Plus
The above programs can also be combined with “add on” programs to further ease the homebuying process:
- Homes for Veterans
- Graduate Home Ownership
- Energy Star
- Down Payment Assistance Loan
- Neighborhood Revitalization Program
Those using a SONYMA loan program also have access to a down payment assistance loan or (DPAL) as an “add on” feature. This zero interest rate loan can be used for a down payment, closing costs, or mortgage insurance payments if your lender requires it.
DPAL Quick Facts
- The maximum loan amount is 3% of the purchase price (up to $15,000) or $3,000, whichever is highest.
- The loan is forgiven after 10 years
- All or a portion of your Down Payment Assistance Loan may be required to be repaid if you sell your home or refinance your mortgage within the first 10 years of purchase.
- The loan may only be used in conjunction with a SONYMA mortgage.
The New York State Association of Realtors Housing Opportunities Foundation offers homebuying assistance in partnership with the Community Foundation for the Greater Capital Region. Applicants don’t need a SONYMA loan to qualify for this grant but must meet SONYMAs first-time home buyer definition (ie. haven’t owned a primary residence within the past three years). The grants are gifts with no payback requirement and are available to low–to-moderate income families in New York State.
- The program offers a $2,000 grant for help with the down payment and/or closing costs.
- The program uses a lottery system to select applicants.
National homebuying assistance programs
The National Homebuyers Fund offers several home ownership programs, one of which is down payment assistance (DPA). Most of their programs are geared towards California buyers but their DPA program is available to those purchasing a home in all 50 states. As a bonus, this program is not limited to first-time homebuyers only. Their down payment assistance program is provided in the form of either a gift or a zero interest rate second mortgage that is forgiven after three years.
- NHF provides down payment and/or closing cost assistance of up to 5% of the mortgage loan amount.
- NHF DPA is provided as a gift or a forgivable second mortgage.
- There is no requirement that a borrower be a first-time homebuyer to qualify.