What to know about buying a house in New York

Buying a home in New York can look very different depending on where you want to settle down. Buying in and around NYC, for example, will cost a lot more than a remote location in upstate NY.

Regardless of location, first-time home buyers in New York state have lots of help readily available.

That can range from educational courses and free advice to financial assistance with your down payment and closing costs. Here’s how to get started.

In this article (Skip to …)

• NY home buyer overview
• Home loan options
• NY home buyer programs
• First-time buyer grants
• Buying in NY cities
• Resources
• NY mortgage rates

• Conventional 97 — From Freddie Mac or Fannie Mae. 3% down payment and 620 minimum credit score. You can usually stop paying mortgage insurance after a few years
• FHA loan — Backed by the Federal Housing Administration. 3.5% down and a 580 minimum credit score. But you’re on the hook for mortgage insurance until you refinance to a different type of mortgage, move home, or pay off your loan
• VA loan — Only for veterans and service members. Zero down payment is required. Minimum credit score varies by lender but often 620. No ongoing mortgage insurance after closing. These are arguably the best mortgages available, so apply if you’re eligible
• USDA loan — For those on low-to-moderate incomes buying in designated rural areas. Zero down payment required. Credit score requirements vary by lender but often 640. Low mortgage insurance rates
• SONYMA mortgages — The State of New York Mortgage Agency offers low-cost loans and the possibility of down payment assistance to qualified borrowers. More information below

Depending on the mortgage loan you choose, you could potentially get into your new home with minimal cash out of pocket.

These programs even let you use gifted money or down payment assistance to cover the down payment and closing costs.

If you’re not sure which loan program to choose, your loan officer can help you find the right match based on your finances and home buying goals.

The State of New York Mortgage Agency (SONYMA) offers statewide assistance to first-time home buyers in NY. This includes affordable mortgage loans as well as down payment assistance.

For example, its Acheiving the Dream program is a 30-year, fixed-rate mortgage with only 3% down. And you only have to pay 1% out of pocket; the rest can come from down payment assistance (excluding co-op buyers).

There are certain eligibility requirements to qualify for SONYMA programs, including:

1. Consistent and verifiable income going back two years
2. ‘Decent’ (unspecified) credit score — Probably 580 or 620, depending on the type of loan you want
3. Enough income to live comfortably and cover homeownership costs
4. Within household income limits and purchase price limits
5. You’ll use the home as your primary residence

SONYMA has a list of approved mortgage lenders; you will have to get a home loan through one of those to fully participate in its programs.

The agency also says it will put you in touch with “nonprofit housing counseling agencies across New York state to help you navigate the home buying process and prepare for successful homeownership through one-on-one counseling, homebuyer education classes, workshops, and more.”

SONYMA has two mainstream down payment assistance loans (DPALs) that are available statewide.

While these are loans rather than grants, both come with no monthly payments and charge zero interest. Better yet, they’re forgiven after 10 years.

That means you don’t have to pay back a cent as long as you remain in the home for a decade. If you move, sell or refinance that home before the 10 years are up, you’ll have to pay back 1/120th of the amount you borrowed for each month short of the 120 months that 10 years last.

The standard DPAL lets you borrow 3% of the purchase price (up to $15,000) or $3,000 — whichever is higher.

DPAL Plus

The “DPAL PLUS” pilot program only opened for applications on April 29, 2021, and is altogether more generous. With this program, you can borrow up to $30,000 toward your down payment and closing costs.

However, the amount you borrow is capped at 20% of your home’s purchase price. By putting down 20%, you stand to get a conventional loan with no mortgage insurance payments — ever. And that’s a huge benefit.

With DPAL Plus, your income can’t exceed 60% of the area median income (AMI) where you’re buying.

Not sure if you qualify? Download this PDF from SONYMA’s website for maximum eligible incomes by county.

Note that DPAL Plus has limited funding. When it runs out of money the program will be suspended until new funds are provided. So, if you want to take advantage of it, get your application in soon.

Other options

SONYMA may well turn out to be your best bet for down payment assistance. But be sure to check out other homeownership programs in the area where you want to buy.

Resources to find local grants are listed at the end of this article. You can also ask your real estate agent, Realtor, or loan officer about down payment assistance programs near you.

Neighborhood Housing Services of New York City, Inc (NHSNYC) offers 15-year repayable loans to help you bridge the gap between your savings and your down payment requirement. But you’ll have to make monthly payments, and interest is charged on the loan amount.

NHSNYC also has a suite of online home buyer education courses, plus a free initial consultation.

Buffalo first-time home buyers

The median home listing price in Buffalo was $158,000 in May 2021, according to Realtor.com. That was up 21.6% year-over-year.

If you want to buy a home at that median price, your down payment options might fall between:

• $4,740 for a 3% down payment
• $31,600 for a 20% down payment

Belmont Housing Resources offers loads of counseling and coaching for homeowners in Buffalo. It also can provide financial assistance of up to $5,000 toward down payments and closing costs.

However, its website provides no information about whether that’s a repayment loan, a forgivable loan, or a grant. Nor does it provide any eligibility information or terms. So your best bet is to call a Belmont counselor at (716) 884-7791.

Rochester first-time home buyers

The median home listing price in Rochester was $147,000 in May 2021, according to Realtor.com. That was up 13.2% year-over-year.

If you want to buy a home at that median price, your down payment options might fall between:

• $4,410 for a 3% down payment
• $29,400 for a 20% down payment

The Bishop Sheen Ecumenical Housing Foundation website says it offers closing cost assistance as well as a range of home buyer counseling services. But, again, the site provides no further details. So call (585) 461-4263 for more information.

• New York City
• Long Island
• Hudson Valley — Rockland, Westchester, Orange, Putnam, Dutchess, Ulster, Sullivan region
• Upstate New York

You can see today’s live mortgage rates in New York here.

When you’re ready to buy, make sure you get interest rate quotes from at least 3-5 lenders. That means actually applying and getting a custom estimate — not just checking advertised rates online.

Mortgage interest rates vary a lot by borrower. So shopping around can easily save you hundreds or thousands of dollars on your home purchase. And it often takes only a few hours.

Ready to get started?

Verify your new rate (Jul 8th, 2021)