Saving enough money for a down payment is the single biggest obstacles to homeownership inbut most residents don’t know that first time home buyer programs exist. 70 percent of consumers had no idea that these programs even exist!
What are New York First Time Home Buyer Programs?
First time home buyer programs were created to help eligible buyers bridge the gap between their savings and the required down payment for a mortgage. There are many kinds of first time home buyer programs in New York. Some of these programs include down payment assistance, no down payment mortgages, low down payment mortgages, modified second mortgages, down payment loans, interest only loans, grants and lender specific mortgages to help first time home buyers. In many cases, these programs don’t have to be repaid.
Qualifications, Eligibility and Approval
Each program has their own qualifications, eligibility and approval process. Typically you must be a first-time buyer purchasing a primary residence which means you have not owned a property in the last three years. Attendance at a first time homebuyer class or program is mandatory. counseling program. The home must be located in the area specified in the program. Approval will depend on income, credit, and other underwriting factors.
Mortgage Programs Available to First Time Home Buyers in New York
First time home mortgage programs will require a first mortgage. There are many mortgage programs available which require either no down payment and low down payments. Below are a list of available programs today:
No Down Payment Mortgages
VA Home Loan – VA helps Service members, Veterans, and eligible surviving spouses become homeowners. As part of our mission to serve you, we provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy. There is no down payment as long as the sales price doesn’t exceed the appraised value.
USDA Single Family Housing Direct Home Loan – the purpose of the Single Family Housing Direct Home Loan is to assist low- and very-low-income applicants obtain decent, safe and sanitary housing in eligible rural areas by providing payment assistance to increase an applicant’s repayment ability. There is no down payment. Payment assistance is a type of subsidy that reduces the mortgage payment for a short time. The amount of assistance is determined by the adjusted family income.
3% Down Payment Mortgages
The HomeReady™ Mortgage – the purpose of the HomeReady™ mortgage by Fannie Mae is to provide flexibility for applicants buy home with down payments as low as 3%, below market mortgage rates, co-borrower flexibility, additional income sources and reduced mortgage insurance costs.
Home Possible® Advantage Mortgage (3% Down Payment)
Home Possible® Advantage Mortgage – the purpose of the Home Possible® Advantage mortgage by Freddie Mac is to offer low down payments for low- to moderate-income homebuyers or buyers in high-cost or underserved communities. Down Payment can come from a variety of sources, including friends and family, employer-assistance programs and secondary financing.
3.5% Down Payment Mortgages
FHA Mortgage Loan – the purpose of the FHA Home Mortgage Loan is to provide mortgage insurance for a person to purchase or refinance a principal residence. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, savings and loan association and the mortgage is insured by HUD. A down payment of just 3.5 percent is required and may consist entirely from “gift funds.” The credit score requirement is 580.
203(k) Rehabilitation Mortgage Insurance – FHA’s Limited 203(k) program permits homebuyers and homeowners to finance up to $35,000 into their mortgage to repair, improve, or upgrade their home. Homebuyers and homeowners can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or an FHA appraiser. Homeowners can make property repairs, improvements, or prepare their home for sale.
OTHER MORTGAGE PROGRAMS
Good Neighbor Next Door – Law enforcement officers, pre-Kindergarten through 12th grade teachers, firefighters and emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD’s Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. In return you must commit to live in the property for 36 months as your sole residence.
Indian Home Loan Guarantee Program – The Section 184 Indian Home Loan Guarantee Program is a home mortgage product specifically designed for American Indian and Alaska Native families, Alaska villages, tribes, or tribally designated housing entities. Congress established this program in 1992 to facilitate homeownership and increase access to capital in Native American Communities.
Where to find First Time Home Buyer Programs in New York
State and local housing agencies also offer first time home buyer programs. They receive funding from HUD to help meet the affordable housing needs of the residents of their state/area. Programs for first time home buyer programs include mortgages and down payment assistance.