Buying an affordable home in the Empire State might seem like a pipe dream, especially if you’re a first-time homebuyer. Yet surprisingly enough, buying your first home in New York is indeed possible, even if you don’t quite have enough money squirreled away for a 20% down payment. 

New York state has many assistance programs to help first-time homebuyers with everything from getting a down payment to scoring a low-interest loan. There are even programs that help buyers with closing costs and other expenses associated with purchasing a home.

So whether you’re hoping to snag a pad in New York City or a cozy home upstate, here are some of the standout programs available to you (including the eligibility requirements and the types of houses you can buy).

The State of New York Mortgage Agency offers several programs that provide financial help to first-time buyers who have a less-than-perfect credit score and a low-to-moderate income.

SONYMA offers two flagship primary mortgage programs: Achieving the Dream and the Low-Interest Rate programs.

Of the two, Achieving the Dream offers the lowest interest rates. It also helps lower-income borrowers maximize the amount of home they can afford by offering a minimal down payment requirement.

The Low-Interest Rate program offers higher yet still competitive mortgage interest rates. And it also lowers the usual down payment requirements for qualified buyers.

Both the Achieving the Dream and Low-Interest Rate programs deliver enticing perks for first-time homebuyers, including the following:

To qualify for the SONYMA programs, you’ll need to meet certain requirements. One of them is a minimum credit score of 620. However, that’s not the sole factor that advances you on the eligibility list.

“SONYMA also looks at credit history, which includes late payments and collection accounts,” says Ch ristine Perlow , a  SONYMA Hall of Fame loan officer at RoundPoint Mortgage Servicing Corporation. “A   potential borrower may have a 680 credit score and not be eligible for SONYMA due to spotty reported credit.”

If that’s the case, a loan officer may ask to look at documented rental history, car insurance payments, and utilities to get a full picture of your credit history.

Beyond your credit score, a lender will have a checklist of requirements. Here’s the gist of what SONYMA is looking for in a borrower:

To qualify for SONYMA programs, a home’s sale price has to fit within price limits, which could vary widely depending on where you choose to call home.

“ There are purchase price limits that make it difficult to find a suitable property in certain regions of New York that have higher average home prices,” says Brian Hanley, an agent with EXIT Realty Premier in Massapequa.

For example, in New York City the average home price is about $850,000 .

“The maximum purchase price allowed for properties in New York City is $719,950 in nontargeted areas,” says Hanley. “This can be challenging and make the program unsuitable for certain buyers, as there is also a cap income amount that an individual can make to qualify for the program.”

Still, it’s not impossible to find a home that checks all the SONYMA boxes. Here are the nuts and bolts of the types of houses you can buy.

The  SONYMA FHA Plus combo package features a 30-year fixed-rate mortgage with SONYMA down payment assistance. Combining these two programs can help reduce the amount of mortgage insurance premium you pay on the loan.

Overall, the standards for approval are more relaxed because lenders use the Federal Housing Administration’s Total Scorecard , which means they look at your total credit history, not just your credit score.

The SONYMA Conventional Plus   also offers a 30-year fixed-rate loan and down payment financial assistance using the Fannie Mae underwriting system, which has flexible credit and underwriting terms. This program also reduces mortgage insurance coverage.

And there are no loan-level price adjustments, which means you don’t have to pay the lender extra fees to offset risk factors like a low credit score. However, income limits apply depending on the house’s location.

Getting a SONYMA mortgage is a sweet deal, but what if you still need some cash for the down payment and closing costs? Well, you’re in luck because SONYMA has a Down Payment Assistance Loan, or DPAL, available for all approved SONYMA mortgage borrowers.

Depending on a home’s purchase price, you could get up to $3,000 toward down payments costs. And if you are required to carry mortgage insurance, a DPAL can be used to cover all or a portion of your premium, which can reduce your monthly mortgage payment significantly.

The best part: Even though it is called a loan, borrowers don’t pay interest or make monthly payments. After 10 years, the loan is forgiven as long as you don’t sell your home or refinance your mortgage.

Can a diploma be your path to your first home? It’s possible with New York’s Graduate to Homeownership program. Eligible recent college graduates include those who have received an associate, bachelor’s, master’s, or doctoral degree within the past 48 months from a program recognized by the U.S. Department of Education.

To qualify, graduates need decent credit and steady employment, and they must meet regional income limits, among other requirements. In return, they’ll secure low-interest, 30-year fixed-rate mortgages and down payment assistance if they purchase their first home in these upstate communities: Albany, Glens Falls, Hudson, Middletown, Kingston, Amsterdam, Oneonta, and Rome.

Give Us Credit is a newer program that considers nontraditional credit history measures to enable more borrowers in underserved markets to qualify for mortgages. The program is geared for low- and moderate-income first-time homebuyers with fluctuating or nontraditional income and savings sources.

For example, lenders work with borrowers who have regular overtime pay and financial support from family and friends, as well as buyers in immigrant communities that use nonbank savings plans.

And special consideration is given for homebuyers who demonstrate sound financial management by overcoming financial hardships such as bankruptcy. Approved borrowers get a 30-year fixed-rate mortgage with a 120-day rate lock period and snag the DPAL, too.

SONYMA mortgages are available through participating lenders. It’s a smart move to meet with at least two of these specialized lenders so you can compare notes, quotes, and the fine print.

“There are guidelines that are specific to SONYMA that the loan officer must be familiar with,” says Perlow. “For example, some guidelines are more flexible than traditional conventional and FHA loans. But SONYMA may have a few more restrictions that conventional and FHA don’t care about.” 

Once you are approved, the fun part begins—looking for eligible homes with your agent. An agent knowledgeable with SONYMA programs can show you properties that fit the program’s criteria and answer questions the seller or listing agent may have.

“It is best to have an agent on your side that can confidently speak to the program and all of its benefits,” adds Hanley. 

Lisa Marie Conklin knows a little something about moving. She's moved eight times in the past 10 years but currently calls Baltimore home. She writes for Reader's Digest, Family Handyman, The Healthy, Taste of Home, and MSN.

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