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Best First-Time Home Buyer Programs in New York

Figuring out the right financing option for your dream first home in New York can feel overwhelming. Luckily there are a variety of financing resources available to help. Learn about the different state, federal, and private financing options and find out how an agent can help you save even more.
Figuring out the right financing option for your dream first home in New York can feel overwhelming. Luckily there are a variety of financing resources available to help. Learn about the different state, federal, and private financing options and find out how an agent can help you save even more.

Buying your first home can be exciting — but it can also be extremely stressful. Most first-time home buyers struggle to save enough money for high down payment standards, worry about how much is needed for closing costs, and generally have many questions regarding the buying process.

Luckily, for first-time home buyers in New York, there are many resources available, particularly when it comes to financing your first home. In this guide, we’ll walk you through the grants, down payment assistance, and other mortgage programs available to first-time home buyers in the state of New York.

State Programs for First-Time Home Buyers

While there are federal and conventional financing options available to all first-time home buyers, there are many state level funding options that buyers in New York can take advantage of.

SONYMA Programs

SONYMA (the State of New York Mortgage Agency) offers a variety of programs that benefit first-time home buyers. Some perks of their offerings include:

  • Down payment assistance
  • No minimum credit score requirement
  • Alternative credit history considered

Eligibility requirements include:

  • Mortgage assistance is required (unless a 20% down payment is made)
  • Two year of employment history
  • Borrowers must have at least 3 lines of credit (active for 18 consecutive months)
  • Less than 45% debt-to-income ratio
  • Adheres to county limits on income vs. purchase price
  • Participation in a homeowner education class

These benefits and requirements may vary from product to product. A few of their most popular products include:

  • Achieving the Dream Program
    • 3% down payment requirement
    • 30-year fixed mortgage
    • Minimum of 1% contribution (cash)
    • Applies to single and multi-family homes
    • No penalty for prepaying
    • Interest rate locks for 120 days
    • Can be combined with additional SONYMA programs and outside grants
  • Remodel NY
    • Allows first-time buyers to combine one of SONYMA programs, like Achieving the Dream, with a remodel loan in one sum, for one low-interest rate
    • Improvements include: structural changes, reconstruction, and remodeling (some limitations apply)

Addition first-time home buyer assistance programs for buyers in New York can be found here.

Federal Programs for First-Time Home Buyers

In addition to state-specific programs for first-time home buyers in New York, there are several federal programs worth looking into, including FHA, USDA, VA, and Good Neighbor program options.

FHA Loans

This loan is popular with first-time home buyers across the nation because of the low credit score requirements and low down payment guidelines.

Benefits include:

  • 10% down payment with 500-579 credit score
  • 3.5% down payment with 580+ credit score
  • Closing costs rolled into loan

Requirements include:

  • Employment history
  • Mortgage insurance
  • Tax returns, pay stubs, and W2s required to apply
  • Must be a first-time home buyer

USDA Loans

First-time home buyers can take advantage of this loan when purchasing housing in a rural area in New York. These rural areas include suburbs and larger towns — in fact, 97% of the country in located in a USDA-approved location.

Benefits include:

  • No down payment requirement
  • More affordable mortgage insurance options

Requirements include:

  • Housing in an approved USDA location
  • Income must be equal to or lower than USDA limit
  • Mortgage insurance required

VA Loans

For Veterans or current military members for are buying their first home in New York, VA loans are worth looking into. VA loans have many advantages over FHA and USDA loans. A few include:

  • No down payment requirement
  • No mortgage insurance requirement
  • Most affordable mortgage on the market

Requirements include:

  • Credit score of 620 or higher
  • 2.15 percent funding fee (can often be rolled into loan)

Good Neighbor Program Loans

If you’re a teacher, police officer, emergency medical technician or firefighter living in the state of New York, you may qualify for the federal Good Neighbor program. This first-time home buyer financing option is funded through HUD and offers 50% off of homes. Benefits include:

  • Half off the listing price of the home
  • $100 down payment

Requirements include:

  • Working in one of the above-approved occupations
  • Only available for housing in a recognized revitalization area
  • Must live in the house for three years

You’ll find more guidance on federal first-time home buyer programs, here.

Private Lender Programs in New York for First-Time Home Buyers

First-time home buyers can also look into private funding resources to finance their first home. Freddie Mac and Fannie Mae mortgage options can often provide lower down payment requirements than FHA loans, though the loan rates can vary.

One top product for first-time home buyers in New York is the HomeReady product by Fannie Mae.

HomeReady Mortgage

The HomeReady mortgage is a product that’s perfect for low to moderate income first-time home buyers who have limited funds for down payments. Benefits include:

  • 3% down payment (lower than FHA’s 3.5% requirement)
  • Ability to cancel mortgage insurance once 20% of the mortgage has been paid
  • No geographic restrictions

Requirements include:

  • Minimum credit score of 620 (borrowers with a score of 680 or above may be eligible for better pricing/rates)

HomeOne Mortgage

Another top private mortgage option that’s ideal for first-time home buyers is the HomeOne Mortgage by Freddie Mac, which offers similar perks to the HomeReady loan. Benefits include:

  • 3% down payment (lower than FHA’s 3.5% requirement)
  • No geographic restrictions
  • No income limits

Requirements include:

  • Completion of homeowner education course
  • Minimum credit score of 620 (borrowers with a score of 680 or above may be eligible for better pricing/rates)

You can learn more about private loan financing options available in New York, here.

Home Buyer Rebates in New York

In addition to finding the most affordable and best mortgage product for your first home, there are additional ways to save during the home buying process. Partnering with an agent who offers home buyer rebates is an excellent way to put more cash back in your pocket at closing time.

Real estate agents can help uncover savings by offering their expertise and opinions on housing prices and financing options. In addition, when you work with a Clever Partner Agent in New York, you’ll also become eligible for Clever’s Home Buyer Rebate. This provides buyers with up to 1% back at the time of closing.

This savings bonus can help increase your down payment, help fund moving costs, or be used to redecorate or purchase furniture for your new home.

You can learn more about Clever’s Home Buyer Rebate program here.

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Andrew Schmeerbauch

Andrew Schmeerbauch is the Director of Marketing at Clever Real Estate, the free online service that connects you top agents to save on commission. His focus is educating home buyers and sellers on navigating the complex world of real estate with confidence and ease. Andrew has worked on projects for the United Nations and USC and has a particular passion for investing and finance. Andrew's writing has been featured in Mashvisor, L&T, Ideal REI, and Rentometer.

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