Agency brings people closer to home
SONYMA offers products to help overcome common barriers to ownership
Owning a home is a pillar of the American dream, but for some achieving that dream is often out of reach because the path to ownership can be a prickly one. Aspiring homeowners, particularly first-time buyers, have a lot to contend with in the current housing market: High prices, elevated interest rates, rising rents and low inventory.
Still, owning a home offers security and remains one of the most efficient ways to build wealth, which is why there are a plethora of programs available to help first-time buyers realize the dream of owning a home. Here in New York, SONYMA (the State of New York Mortgage Agency) removes many of the hurdles for would-be buyers through a variety of mortgage programs.
A subsidiary of New York State Homes and Community Renewal, SONYMA is a great first-time homebuyer product for a lot of different reasons, says Susan Cotner, executive director of the Affordable Housing Partnership Homeownership Center, an Albany-based organization offering programs to promote successful and affordable homeownership since 1948.
“SONYMA has been a longtime partner with innovative programming that we offer,” says Cotner, who has worked with the homeownership center since 1989 and estimates the organization helps nearly 200 families a year purchase a home.
What is SONYMA?
Established in 1970, SONYMA (the acronym is pronounced “Sunny May”) was created to help provide eligible low and moderate-income New Yorkers a pathway to homeownership. The agency offers low-interest mortgage loans, down payment assistance, rehabilitation incentives and more.
“Our goal is to put affordability for first-time homebuyers upfront,” says Dina Levy, senior vice president of Homeownership & Community Development at SONYMA.
Last year, the agency funded nearly 2,000 loans totaling more than $400 million, the agency’s best year on record, according to Levy. In addition to first-time buyers, the agency also offers program options for veterans, recent college graduates and other population groups.
“I think now in particular because real estate prices have gone so bananas everywhere, SONYMA has become an even more important tool,” says Levy.
SONYMA offers its mortgage programs through a network of participating lenders, from big banks to smaller credit unions and community development financial institutions. All loans are financed through the sale of tax-exempt bonds and SONYMA sets the terms as to what terms of loans they are willing to purchase and provide liquidity to those institutions.
“Our mission is certainly accomplishing first-time homeownership with an eye toward low and moderate first-time homebuyers,” says Levy.
Financing options
SONYMA’s two primary mortgage programs, Low Interest Rate and Achieving the Dream, are both designed to maximize the amount a prospective homeowner can afford. Each program has its own requirements and buyers must meet certain qualifications and credit-borrowing guidelines. To qualify for most programs, income is typically capped at 115 percent of an area’s median income.
In addition to financing, SONYMA offers homebuyers down payment assistance. Through the Down Payment Assistance Loan (DPAL) program, borrowers can secure a second
mortgage that can be used in combination with any SONYMA lending plan. DPALs have no interest rate and no monthly payments and will be forgiven after ten years as long as the borrower maintains SONYMA financing and continues to occupy the property. The standard program is three percent of purchase
price capped at $15,000, something the agency is revisiting now because housing prices have soared in recent years, says Levy.
“There is a great need for more down payment assistance,” says Levy. “You don’t have to take all of it, just some of it. Whatever you need to get over the finish line.”
An enhanced assistance program called DPAL+ offers additional funds — up to $30,000 — for folks whose income does not exceed 60 percent of the area median income. The goal is to make sure the borrower at closing starts out with 20 percent equity in the home to avoid having to