The Best First Time Buyers Program in NYC

There are a plethora of national and local first time buyers program options in NYC. However, most of them are either very hard to qualify for and simply enable you to purchase with a lower down payment.

We’ll give you an overview of the various options New Yorkers have, and explain how you can save money on your purchase through Hauseit’s Buyer Closing Credit Program.

Overview of various federal and local first time buyers program options in NYC. Lower down payment loan options vs buyer closing credits and assistance.

Table of Contents:

Typical Government First Time Buyers Program Options

The typical article you’ll find on the internet about government backed first time buyers program options aren’t referring to actual programs that will give money back to buyers or help cover their closing costs.

In fact, they’re usually referring to loan programs sponsored by various government entities such as the Federal Housing Administration (FHA), Fannie Mae or Freddie Mac.

Special Loans for Veterans

Furthermore, many of these loan programs will be hard for the average New Yorker to qualify for.

For example, the Department of Veterans Affairs (VA) offers U.S. military families loans which require no down payment nor Private Mortgage Insurance (PMI).

The VA does this by guaranteeing the loan which allows lenders the ability to offer these special features. The VA also offers a Native American Direct Loan program which helps Native American veterans and their spouses purchase property with no down payment and no PMI on Federal trust land. However, how many New Yorkers will be able to qualify for a specialized program such as this?

Pro Tip: First time home buyers will often be confused about the different types of apartments in NYC. If you’ve never encountered a co op apartment before, please read our article on questions to ask when buying a co-op in NYC.

Our Discretion, Your Advantage

Our traditional partner brokers never openly discount which means less disruption and better execution for you.

Fannie Mae and Freddie Mac

Many articles on first time buyers program options will include “conforming” loans backed by Fannie Mae and Freddie Mac. However, this is disingenuous as loans for second homes and investment properties can qualify for Fannie Mae and Freddie Mac.

Strict Loan Limits

Furthermore, New Yorkers will find it tough to qualify for the loan limits set by Fannie Mae and Freddie Mac.

That’s because the new maximum loan size for conforming mortgages in 2018 as determined by the Federal Housing Finance Agency (FHFA) is $453,100 or $679,650 for high cost areas like New York.

This means most New Yorkers will not be eligible for a conforming mortgage given that the average sale price of a home in NYC is now over $2 million. That’s too bad given that Fannie Mae and Freddie Mac backed loans allow down payments as low as 3%!

Pro Tip: As a first time home buyer in NYC, you’re likely confused by all the various types of real estate agents running around. Learn the difference between a buyer’s agent vs seller’s agent as well as the difference between a real estate broker vs agent.

Save 2% On Your Home Purchase

Save thousands on your home purchase with a buyer agent commission rebate from Hauseit

Good Neighbor Next Door

This is an interesting federal program that allows teachers, police officers, firefighters and Emergency Medical Technicians (EMTs) to purchase houses in designated revitalization areas that have been repossessed by the federal government at half of its appraised value. These were homes that were insured by the FHA and foreclosed on and is now being sold by the Department of Housing and Urban Development (HUD).

Again, a very interesting program but not very relevant for New Yorkers as there are only a handful of properties for sale under the Good Neighbor Next Door program in all of New York State as of February 21, 2024 on the program’s website.

Pro Tip: Learn the process of buying a foreclosure property in NYC and read our guide to buying investment property in NYC. Remember to calculate your cash and cash return as well as your cap rate with our handy rental property calculator!

HomePath Ready Buyer

This program by Fannie Mae enables buyers the opportunity to earn up to 3% in closing cost assistance by purchasing one of its foreclosed properties. Buyers have to complete a homeownership educational course and must intend to live in the property.

Very interesting but again not very relevant for New Yorkers given that the HomePath website has a total of 3 properties for sale in Manhattan and 6 properties for sale in Brooklyn as of July 3rd, 2018.

Furthermore, these properties do not appear to be listed at bargain prices and are marketed properly on other popular real estate search websites as well as the Hudson Gateway MLS (HGMLS). Curiously, HomePath properties are not listed in the REBNY RLS which is the primary broker database for NYC.

Pro Tip: If you’re not sure you’re ready for home ownership yet, do a thorough buying vs renting analysis in NYC to see whether it makes sense to make the leap.

A Full Service Listing for 1%

Sell your home with a traditional full service listing for just one percent commission.

SONYMA Loans and Down Payment Assistance

The State of New York Mortgage Agency (SONYMA) offers an interesting Down Payment Assistance Loan (DPAL) that is essentially a zero interest second mortgage with no monthly payments that is forgiven after 10 years. The owner will need to occupy the property and keep the SONYMA financing in place for all 10 years for the DPAL to be forgiven.

The DPAL is a maximum of $3,000 or 3% of the purchase price, up to $15,000. Keep in mind that the DPAL cannot be larger than the down payment or the closing costs associated with the purchase.

Also, the interest rate for first lien mortgages with a DPAL will be 0.375% higher than a first lien mortgage without a DPAL, so this feature does not come free. To learn more about the various SONYMA loan programs available for New Yorkers, please visit their website.

Pro Tip: Figure out what your closing costs will be and get pre-approved for a mortgage before you start the home buying and NYC mortgage process. Estimate your closing costs with our handy Closing Cost Calculator for Buyer in NYC.

Hauseit First Time Buyers Program in NYC

Hauseit’s Buyer Closing Credit Program allows home buyers to receive a credit of $20,000 or more against their closing costs on the average New York City home.

Flexibility is a key benefit as the credit can be applied against your closing costs or the purchase price, or even as a check made out to you post-closing.

Anyone Can Apply

This first time buyers program is interesting in that it can be combined with any of the government backed first time buyers program options discussed in this article.

Furthermore, there are no qualifications or minimum credit scores you’ll need to meet in order to qualify for Hauseit’s Buyer Closing Credit Program.

In fact, the credit comes from the broker commission that is built into the price. Typically, a seller agrees to pay a fixed fee through an Exclusive Right to Sell Listing Agreement regardless of whether the buyer is represented or not. If the buyer has an agent, then the listing agent will split the commission equally with the buyer’s agent. If the buyer does not have an agent, the listing agent will keep the entire fee for him or herself.

Through Hauseit’s Buyer Closing Credit Program, first time home buyers are paired with an experienced, reputable partner broker who will guide them through the home buying process. When the deal is finished, the buyer’s broker will split $20,000 or more on average from their side of the commission to the buyer. The buyer never pays anything for the services of the buyer’s broker.

Lastly and most importantly, all of Hauseit’s partner brokers are brand name, traditional real estate brokers who never openly discount their services. As a result, Hauseit’s partner brokers have their reputations and relationships with the wider broker community intact.

This means you will never have to worry about other brokers treating you or your buyer’s agent any differently. Remember, what’s the point of a sweet closing gift if you upset the other party, disrupt your deal and can’t close!

More Questions? Have any question answered in Hauseit’s Forum, where New York real estate professionals come together to discuss the toughest questions in real estate.

Our Discretion, Your Advantage

Our traditional partner brokers never openly discount which means less disruption and better execution for you.

Disclosure: Hauseit® and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. No representation, guarantee or warranty of any kind is made regarding the completeness or accuracy of information provided.

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