Most Americans believe that owning their own home is still a big part of the “American Dream.” Many also have concerns that with news of “credit tightening” and more restrictive lending standards this may now be harder to accomplish. The good news for homebuyers is that there are numerous affordable mortgage programs available to help them realize their dream. These include State of New York Mortgage Agency (SONYMA) programs that provide homebuyers with easy and affordable financing.

SONYMA’s primary program, the “Low Interest Rate Mortgage” offers homebuyers low downpayment financing with a low fixed interest rate - typically below prevailing conventional mortgage interest rates. This is particularly helpful to first-time homebuyers who may have difficulty securing a downpayment. With program downpayments as low as 3%, homebuyers need very little out-of-pocket cash to purchase a home. In fact, only 1% of the downpayment needs to be from the borrower’s own savings; the remaining 2% may come from an acceptable gift or grant.

In cases where homebuyer’s make a 3% downpayment or more, the program also offers higher qualifying debt-to-income ratios than typical conventional loans - allowing up to 40% of the borrower’s gross income to cover the mortgage payment and 45% of their gross income to cover all continuing debt. In comparison, conventional loan programs currently provide standard ratios closer to 33/38 and in some cases 28/36.

SONYMA programs also offer buyers a “Closing Cost Assistance Loan” that provides the option of obtaining additional funds for closing cost expenses. Borrowers can receive additional assistance, up to 3 % of the mortgage amount, to be used toward closing expenses. The loan does not increase the monthly cost of the borrower’s loan or the sales price of the home and is forgiven after 10 years as long as the borrower resides in the home and the SONYMA mortgage remains outstanding.

Eligible properties available through the SONYMA Low Interest Rate Program include one to four family dwellings, condos and co-ops. SONYMA currently has purchase price limits set at $550,000 for a single family home in Bronx, Kings, New York, Queens and Richmond Counties. Naturally, certain other conditions and restrictions apply with all programs and they are subject to change or discontinuation without notice. Please call for details including current rates, income and purchase price limits.

About the Author:

David Mason is a Senior Loan Officer with M&T Bank. His career spans more than 20 years in assisting borrowers with their financing needs, including first-time homebuyers, construction lending, and senior homeowners with reverse mortgage needs. M&T is New York State’s number one SONYMA lender. M&T Bank, which is among the top 20 banks in the nation with over $65 billion in assets and more than 150 years of experience, is a full service equal housing lender.

You may contact Mr. Mason at: M&T Bank

125 Baylis Road Melville, NY 11747

Telephone: 800-924-5626 extension 315

Email: dmason1@mtb.com