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What You Should Know About Buying a Home in New York
Buying a home in New York can look very different depending on where you plan to settle. For example, shopping in and around NYC costs much more than a remote location in upstate NYC.
Regardless of their location, first-time home buyers in New York state have tons of help available.
This can range from educational courses and free advice to financial assistance with your down payment and graduation costs. How to start.
Confirm Eligibility to Buy a Home in New York (July 8, 2021)
In this article (continue to …)
New York Home Buyer Overview
The average home price in New York State was $ 370,000 as of April 2021. But that covers a wide range in different locations in the Empire State.
For example, the median price in St. Lawrence County that month was $ 93,500. But in Manhattan it was $ 1.1 million. And that means where you buy can be far more important than the national average.
| New York Home Buyer Overview | |
| Average house sale price in New York | $ 370,000 |
| Minimum deposit in NY (3%) | $ 11,100 |
| 20% deposit in NY | $ 74,000 |
| Average creditworthiness in New York1 | 718 |
| Maximum Grant for NY Homebuyers2 | $ 30,000 compliant loan available nationwide through SONYMA’s DPAL Plus program |
Down payment amounts are based on the last available average home sale price in the state. The “minimum†down payment assumes 3% on a conventional mortgage with a minimum credit rating of 620.
If you are eligible for a VA loan (supported by the Department of Veterans Affairs) or a USDA loan (supported by the U.S. Department of Agriculture), you may not need a down payment at all.
Confirm Eligibility to Buy a Home in New York (July 8, 2021)
Initial Loans for New York Home Buyers
If this is your first time home buying and you pay a 20% down payment, you can get a conventional loan with a low interest rate. And you never have to pay for personal mortgage insurance (PMI).
Of course, only a few first-time buyers saved 20 percent. But the good news is you don’t need that much. Not even close.
New York home buyers can often save money upfront by using one of these low down payment mortgage programs:
- Conventional 97 – From Freddie Mac or Fannie Mae. 3% deposit and a minimum of 620 credits. You can usually stop paying mortgage insurance after a few years
- FHA loans – Supported by the Federal Housing Administration. 3.5% down and a credit score of at least 580. But you’re looking for mortgage insurance until you refinance, move, or pay off your loan on a different type of mortgage
- VA loan – For veterans and service members only. A zero deposit is required. The minimum credit score varies by lender, but is often 620. No ongoing mortgage insurance after taking out. These are arguably the best mortgages available. So apply when you are eligible
- USDA loan – For low to middle income people who shop in designated rural areas. Zero deposit required. The creditworthiness requirements vary depending on the lender, but are often 640. Low mortgage insurance rates
- SONYMA mortgages – The New York State Mortgage Agency offers low-cost loans and down payment assistance to qualified borrowers. More information below
Depending on the mortgage loan you choose, you may be able to move into your new home with minimal cash.
With these programs, you can even use free cash or down payment aids to help cover down payment and closing costs.
If you are unsure of which loan program to choose, your loan officer can help you find the right loan based on your finances and home purchase goals.
New York First Time Home Buyer Programs
The New York State Mortgage Agency (SONYMA) provides nationwide support for first time home buyers in NY. These include cheap mortgage loans as well as down payment aids.
For example, the Acheiving the Dream program is a 30 year fixed rate mortgage only 3% lower. And you only have to pay 1% out of pocket; the rest can come from the deposit help (except for cooperative buyers).
There are certain admission requirements to qualify for SONYMA programs, including:
- Constant and verifiable income for two years
- “Decent” (unspecified) creditworthiness – likely 580 or 620, depending on the type of loan you want
- Enough income to live comfortably and to cover the cost of owning a home
- Within the household Income limits and purchase price limits
- You use the house as your main residence
SONYMA has a list of approved mortgage lenders; You must obtain a home loan through one of these providers to fully participate in their programs.
The agency also says it will put you in touch with “nonprofit home advisory agencies across New York state to help guide the home buying process and prepare for successful home ownership through one-on-one counseling, homebuyer training, workshops, and more. â€
Find the best first-time buyer loan for you (July 8, 2021)
Grants for First Time Home Buyers in New York
SONYMA has two mainstreams Down payment assistance loan (DPALs), which are available nationwide.
While these are loans rather than grants, they both come with no monthly payments and no interest. Better still, they are taken after 10 years.
That said, you don’t have to pay a dime back as long as you stay in the household for a decade. If you move, sell, or refinance the home before the 10 years are up, you must repay 1/120 of the amount borrowed for each month except for the 120 months of the past 10 years.
With the standard DPAL, you can borrow 3% of the purchase price (up to USD 15,000) or USD 3,000 – whichever is greater.
DPAL Plus
The “DPAL PLUS†pilot program was only opened to applications on April 29, 2021 and is more generous overall. This program allows you to borrow up to $ 30,000 towards your down payment and closing costs.
However, the loan amount is capped at 20% of the purchase price of your home. If you drop 20%, you can get a conventional loan with no mortgage insurance payments – never. And that’s a big advantage.
With DPAL Plus, your income cannot exceed 60% of the Area Median Income (AMI) in which you are buying.
Not sure if you qualify? Download this PDF from the SONYMA website for the maximum eligible income by district.
Note that DPAL Plus has limited resources. If the money runs out, the program will be suspended until new funds are made available. So if you want to take advantage of it, apply soon.
Other options
SONYMA may prove to be your best choice for deposit assistance. But also check out other home ownership programs in the area you are planning to buy.
Resources to find local grants are listed at the end of this article. You can also ask your real estate agent, broker, or loan officer about deposit support programs in your area.
Buy a house in New York’s major cities
Even between the major cities in the Empire State, there are huge differences in home prices and mortgage payments. Here’s what to expect.
New York City first time home buyers
The average property price in New York City was $ 799,000 in May 2021, according to Realtor.com. That was unchanged year-on-year.
If you want to buy a home at this average price, your down payment options can be between the following options:
- $ 23,970 against 3% deposit
- $ 159,800 against 20% deposit
New York City, Inc (NHSNYC) offers 15 year repayable loans to help you bridge the gap between your savings and your down payment needs. However, you will have to make monthly payments and interest will be paid on the loan amount.
NHSNYC also offers a range of online homebuyer training courses, as well as a free initial consultation.
Buffalo first time home buyers
The average property price in Buffalo was $ 158,000 as of May 2021, according to Realtor.com. That was 21.6% more than in the previous year.
If you want to buy a home at this average price, your down payment options can be between the following options:
- $ 4,740 against 3% deposit
- $ 31,600 against 20% deposit 20%
Belmont Residential Resources offers plenty of advice and coaching for homeowners in Buffalo. It can also provide financial assistance of up to $ 5,000 for down payments and closing costs.
However, whether it’s a repayment loan, a forgivable loan, or a grant, the website doesn’t make it up. It also does not contain any eligibility or conditions information. Therefore, it is best to call a Belmont representative at (716) 884-7791.
Rochester first time home buyer
The average property price in Rochester was $ 147,000 in May 2021, according to Realtor.com. That was 13.2% more than in the previous year.
If you want to buy a home at this average price, your down payment options can be between the following options:
- $ 4,410 against 3% deposit
- $ 29,400 against 20% deposit 20%
The Bishop Sheen Ecumenical Housing Foundation The website says it offers assistance with closing costs as well as a range of homebuyer advisory services. But again, the site does not provide any further details. So call (585) 461-4263 for more information.
Where can I find help buying a house in NY
All of the organizations listed above should provide free advice to any first time home buyer in New York State.
In addition to our selections, the US Department of Housing and Urban Development (HUD) provides some lists for statewide, regional, and local resources:
New York Home Buyer Resources by City / Area /:
What are the mortgage rates in New York today?
Here you can see the latest live New York mortgage rates.
When you’re ready to buy, make sure you get interest rate quotes from at least 3-5 lenders. This means that you actually request and receive an individual cost estimate – and not just check the advertised prices online.
Mortgage rates vary widely depending on the borrower. This can easily save you hundreds or thousands of dollars on your home purchase while shopping. And it often only takes a few hours.
Ready to start?
Confirm your new plan (July 8, 2021)
1 Source: Experian.com 2021 study on 2020 data
2Based on a review of available state DPA grants at the time of this writing
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