There are many costs and fees associated with buying a home. For a first time home buyer, it’s likely they don’t have piles of money laying around. There are national, state, and local programs/grants available for a first time home buyer. Many of these programs and grants can help cover a large amount of the “closings costs” and/or allow them to finance a higher percentage of the loan (or all of the loan in some cases).
Read on for some detailed information on some great programs that are available to eligible first time home buyers. Directly below is a short video that briefly discusses some of the fantastic Rochester NY first time home buyer programs and mortgage products!
National Programs & Grants
USDA Rural Development Program
This program is designed to help low to moderate income rural first time home buyers (also available to a non first time home buyer). Rural Development has partnered with lenders across the country to allow 100% financing on eligible properties. The qualifying ratios are strict in comparison to other mortgage programs. The housing costs cannot exceed 29% and total debt cannot exceed 41%. Eligible repairs and improvements may be included in the loan.
State and Local Programs & Grants
First Home Club
Several lenders throughout New York offer the first home club matched savings program. With this program a first time home buyer can qualify for a grant of $7,500 towards their down payment & closing costs. This grant is financed by the Federal Home Loan Bank of New York (but is also available in New Jersey). This program matches $4 to every $1 contributed by the first time home buyer (up to $1,875). A “first time home buyer” refers to one whom hasn’t owned a home in the past 3 years, single parents, or displaced homemakers who owned a property within three years with a spouse. The length of this program ranges from 10 months to 24 months. There are income eligibility requirements and depending on which county the first time home buyer resides in will determine what the requirements are. The first time home buyer must also complete a home buyer education program prior to the grant being approved. This program is an excellent option for a first time home buyer who is either not in an immediate hurry to purchase or cannot purchase at this instant.
State of New York Mortgage Agency (SONYMA)
This agency offers mortgage programs to a first time home buyer with the purchase of a home in New York State. These SONYMA loans are financed through the sale of tax exempt bonds.
- Down Payment Assistance Loan (DPAL)
One of the largest hurdles for a first time home buyer is the amount of funds needed for down payment and closing costs. The DPAL allows a first time home buyer to secure down payment assistance through a second mortgage that can be used in conjunction with other SONYMA products. The minimum amount of the DPAL is $1,000 and the maximum is $3,000 or 3% of the purchase price (up to $15,000). This loan has a 0% interest rate. There are no monthly payments on this loan. If the first time home buyer resides at the property for 10 years, the loan is forgiven.
- Homes for Veterans Program
In conjunction with the New York State Department of Veterans’ Affairs, SONYMA offers this program that allows U.S. Military Veterans and active U.S. military personnel to buy their first home (also available to a veteran who is a non first time home buyer). The first time home buyer must be stationed in New York State to take advantage of this program. The interest rate for this program are lower than normal SONYMA rates and also allow the buyer to contribute as little as 1% (the other 2% can come as a gift or other acceptable sources).
- Achieving The Dream
SONYMA offers this program to a low income first time home buyer with low down payment mortgage financing on one or two family dwellings. The program offers a low minimum cash requirement for the buyer of 1%. There are income eligibility requirements for the Achieving The Dream program and fluctuates depending on the county the property is located in that the first time home buyer is purchasing.
- Low Interest Rate Program
SONYMA offers this program to a first time home buyer with low to moderate income. Like the Achieving the Dream program, this program allows the first time home buyer to only have to contribute 1%. There are income eligibility requirements for the Low Interest Rate Program which also fluctuate from county to county.
- Remodel New York
SONYMA offers this program to a first time home buyer for the purchase of a home that is in need of improvements and/or repairs. This program allows 97% of the loan to be financed which includes the purchase price plus the cost of the renovations. There is a list of eligible renovations that are allowed with this program. There are income eligibility requirements for this program as well, which fluctuate from county to county.
- Construction Incentive Program
SONYMA offers this program to a first time home buyer who purchases newly constructed or rehabilitated homes (up to 97%). The construction incentive program allows a much longer “rate lock” than most loan programs (240 days). SONYMA has income eligibility requirements for this program as well.
Home Purchase Assistance Program (HPAP)
The City of Rochester offers this grant of up to $3,000 (towards down payment and closing costs) to a first time home buyer that meets the HPAP requirements. The property that the first time home buyer is purchasing must be located within the City of Rochester and must be a one or two-family home. The buyer must contribute $1,500 of their own funds and remain in the home for 5 years. In addition, like the First Home Club, the first time home buyer must attend pre and post-purchase home buying training.
The above are some great programs and grants available for a first time home buyer (especially ones looking in New York State). If the first time home buyer is not located in New York State, contact an experienced local real estate professional or local mortgage consultant. We’d love to hear what programs that are offered to a first time home buyer outside of New York State, so please comment below or e-mail me at Kyle@RochesterRealEstateBlog.com.
More Resources for First Time Home Buyers
- 6 Ways to Buy a Home with Little or No Money!
- First Time Home Buyer Tips and Advice That Must Be Read!
- Tips for Buying Your First Home by Bill Gassett
- 10 Steps to Buying a Home in 2014
- How to Make a Good Offer on a House by Joe Manausa
About the authors: The above article “First Time Home Buyer Programs” was provided by the Keith Hiscock Sold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise.
We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoye Falls, Chili, and Victor NY.
Visit our website at www.HiscockHomes.com.
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