First-Time Homebuyer Programs in New York

The down payment on a new home is often the biggest hurdle for first-time homebuyers. In New York, where the average home value is $480,516, a down payment of $96,103 is needed to avoid buying private mortgage insurance.

First-time homebuyer programs in New York help make homeownership more accessible. Some mortgages let you make a smaller down payment, but they often have income limits and require mortgage insurance. MoneyGeek explores several state-specific and government-backed first-time homebuyer programs for people from different financial backgrounds.

New York offers grants and loans to assist first-time homebuyers with down payment and closing costs. We compiled first-time homebuyer programs provided by the State of New York Mortgage Agency (SONYMA) to help you find the best option for your needs and situation.

The Achieving the Dream Program offers the lowest interest rate among SONYMA's mortgage options for first-time homebuyers in New York. This 30-year fixed-rate mortgage requires as little as a 3% down payment, with down payment assistance available.

The program supports purchasing one to four-family homes, cooperatives and condominiums. It features no prepayment penalties and flexible rate locks based on the property. Buyers must meet region-based income limits and complete a homebuyer education course.

The Low Interest Rate Program offers competitive rates and lower down payment requirements to first-time homebuyers in New York. It provides a 30-year fixed-rate mortgage, with down payment options as low as 3% and the possibility of down payment assistance. The program accommodates purchasing one to four-family homes, condominiums, cooperatives and manufactured homes.

Buyers must provide a minimum cash contribution and meet regional income limits. No prepayment penalties apply, and rate locks are available for existing homes and properties under construction.

Down Payment Assistance Loan (DPAL) helps New Yorkers cover down payments and closing costs when buying a home with a SONYMA mortgage. DPAL provides a 0% interest loan with no monthly payments, forgiven after 10 years if the buyer stays in the house. The loan amount is 3% of the purchase price or up to $15,000, whichever is higher. DPAL can also cover mortgage insurance premiums, potentially lowering monthly payments.

The Conventional Plus Program pairs Fannie Mae's HomeReady mortgage with a Down Payment Assistance Loan (DPAL). It offers a 30-year fixed-rate mortgage for first-time and repeat homebuyers in New York, with no loan-level price adjustments, reduced mortgage insurance and the option to use DPAL for upfront mortgage insurance premiums. Eligible properties include one to four-unit primary residences, condos and co-ops, with loan-to-value (LTV) ratios of up to 97%.

The FHA Plus Program combines the benefits of FHA's 30-year fixed-rate mortgages with SONYMA’s Down Payment Assistance Loan (DPAL). It provides flexibility through FHA’s 203(b) and 234(c) mortgage products, allowing low down payments.

The program offers up to 96.5% financing, and the DPAL can cover the FHA-required 3.5% down payment. The FHA Plus Program is available for one to four-unit primary residences and is underwritten using FHA's Total Scorecard.

In addition to New York's statewide first-time homebuyer programs, some cities offer their own assistance to help residents achieve homeownership. The table below highlights a city in New York with a program for first-time homebuyers.

New York offers zero-down-payment loan programs that don't require a down payment when purchasing a home. USDA and VA loans are government-backed loans with this benefit.

USDA loans help low to moderate-income homebuyers in rural areas who may not qualify for conventional loans. The U.S. Department of Agriculture issues these loans through its Rural Development Guaranteed Housing Loan program.

USDA loans offer zero down payment options and competitive interest rates. These loans encourage economic development by making homeownership more accessible in rural areas.

To qualify for a USDA loan, the property must be 2,000 square feet or below and located in a USDA-eligible rural area with a population of less than 35,000. Borrowers must use the property as their primary residence and ensure the home is in a USDA-eligible area. Income limits vary by location. For example, in Columbia County, New York, the income limit for a four-person household is $82,550, while in Essex County, New York, it's $69,050.

VA loans from the U.S. Department of Veterans Affairs are for veterans, active-duty service members and eligible surviving spouses. These loans offer a range of benefits that make homeownership more accessible for those who have served the country.

VA loans come with several advantages, including a no-down payment option. They don't require private mortgage insurance, reducing monthly payments. VA loans also typically offer lower interest rates than private loans. As of December 2024, the APR for a 15-year fixed-rate VA loan in New York is 5.60%, while the APR for a 30-year fixed-rate VA loan is 5.95%.

To qualify for VA loans, applicants must meet eligibility criteria, including service length or commitment, duty status and character of service. Applicants must also meet location-based income limits and have a valid certificate of eligibility (COE).

First-time homebuyers in New York can access low-down-payment loan programs that allow them to finance their homes with a down payment of 3.5% or less. These programs include conventional, FHA and FHA 203(k) loans.

FHA and conventional loans are often compared, as they're the most common types of mortgages. FHA loans require at least a 3.5% down payment, while conventional loans can require as low as 3% for first-time homebuyers. Conventional loans typically have stricter credit score and debt-to-income ratio requirements than FHA loans.

As of December 2024, the APR for a 15-year fixed-rate conforming loan in New York is 5.66%, while the APR for a 15-year fixed-rate FHA loan is 6.28%. FHA loans can have higher APRs due to the additional fees and costs associated with government-backed loans.

Use our FHA vs. conventional loan calculator below to compare both mortgage programs and determine the best option.

We addressed frequently asked questions about first-time homebuyer programs in New York to help you identify the best option and move closer to achieving homeownership.

Explore additional MoneyGeek resources for first-time homebuyers in New York to help you with the homebuying process.