Military members and families living in New York State have help with home loans and down payment issues thanks to state-level efforts to make housing more affordable and attainable for qualifying military veterans.
The New York State Division of Veterans’ Services official site refers veterans to the State of New York Mortgage Agency (SONYMA), which features vet-friendly loans and down payment assistance.
This agency serves military members, but not exclusively–it provides access to both funds and counseling for those who want to become homeowners. The veteran-friendly programs are offered as part of a larger program to help home buyers.
Who Qualifies For SONYMA Assistance
For the purposes of this article, we are focusing on SONYMA help and qualifications specifically relevant to veterans. The qualifications listed here do not necessarily apply for other programs not aimed at the veteran community.
Military retirees, and those who have separated from military service without retiring are eligible to apply for SONYMA help.
Also, active duty service members, honorably discharged National Guardsmen, or honorably discharged Reserve members who qualify as first time homebuyers may also apply. In general the guidelines for application approval include:
- All military members stationed in New York State (regardless of discharge status)
- Currently serving National Guard members
- Honorably discharged National Guard members
- Active Reserve members
- Honorably discharged Reservists
Home For Veterans
The SONYMA Homes For Veterans program involves the veteran applying for a fixed-rate mortgage “with interest rates 0.375% below the already low interest rates charged on SONYMA mortgages” offering down payment assistance. This program is NOT restricted to first-time home buyers and there are no origination fees or points.
Homes For Veterans Loans also feature:
- Down payment assistance with a maximum of the greater of either $3,000 or 3% of the home purchase price. The total amount may not exceed $15k.
- Minimum borrower cash contribution of one percent.
- A remaining two percent is required, but may come from gift funds or other outside sources acceptable to the lender.
- Applicants “must have served in the active military and discharged under conditions other than dishonorable” according to the official site.
The minimum loan amount is $1000, with the maximum loan capped at three percent of the purchase price of the home up to a specified cap.
What You Should Know About SONYMA Down Payment Assistance Loans
The amount of your down payment loan cannot exceed the actual amount of your downpayment and closing costs–you are not permitted to get cash back on this loan.
SONYMA literature advises that interest rates with a first-time home buyer mortgage with a down payment loan “will be .375% higher than mortgages without” in some cases, but all who apply for these down payment loans in conjunction with Home For Veterans are NOT subject to this rate.
What else should you know about down payment loans associated with this program?
- Down payment funds under this program cannot be subordinated under another mortgage
- No cash at closing
- Funds borrowed under down payment assistance may be required to be paid back if you sell or refinance the original mortgage before ten years have passed. That repayment amount decreases each month you live in the property.
- All Homes For Veterans applicants also applying for down payment help are required to pay a minimum cash contribution of 1% of the value of the property. This amount is higher for certain multi-unit homes and cooperatives.
- In order to qualify for down payment help the applicant must be a borrower under a SONYMA program.
SONYMA relies on a network of participating lenders; not all may offer downpayment assistance. You will need to find a participating lender in the network that can work with your needs for down payment assistance.
Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News
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