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In accord with the state of New York initiative to help people who are taking their first steps
towards home ownership there are five SONYMA (State of New York Mortgage Assistance)
programs particularly designed to provide practical assistance for those who require loans
with low interest rates.
One of these programs is called the Low interest Rate Program, and it really is of interest for anyone buying an existing home or a newly constructed residence.
You may be eligible for the program even though this is not your first home if the property is
located in a target area. A target area consists of a census tract which has been designated as
economically distressed and borrowers purchasing a home in these areas can enjoy special
incentives such as higher household income limits,( that is the combined income of all who expect to live in the house whether or not they sign the mortgage) and higher home purchase limits, which is the maximum purchase price allowed subject to federal and state law. Two-family homes that are more than five years old are also eligible for low interest loans. As
are condominiums and cooperative apartments though for these last mentioned categories
SONYMA have certain requirements.
The SONYMA Low interest Rate Loan has several supportive features including payment protection in cases of job loss or accident. This cover is provided with no additional cost to the buyer and will pay up to $2000 a month towards your mortgage if you or your co-borrower are involuntarily unemployed for more than 30 days.
Down payment assistance loans(DPAL) are provided by SONYMA, DPAL loan up to $3000 or
3% of the purchase price of the property (not more that $10,000). Contact one of the more
than 50 participating lenders located throughout the state to apply for this loan.
The Low interest Loan is available for up to 97% of the value of the new home, however for 3 and 4
family dwellings the limit is 90% while for cooperative apartments the maximum is 95%. The
borrower is required to make a minimum cash payment of 1% of the value of the property
for most purchases but for the financing of homes with a 90% limit the cash payment is 3%
of the total value.
To ensure that there is no change in the interest rate a short term 100 day lock in can be arranged. Homes located in the New York State which are not to be used for business or commerce are eligible for the low interest rate program. The applicant who does not require DPAL will enjoy a particularly favorable interest current rate of 4.0% for a 30 year mortgage of 4.5% for a 40 year mortgage. Those using DPAL for 30 years mortgage will receive 4.5% interest rates and for 40 years it will be 4.75. This will in either case result in very reasonable monthly payments. In this way the State of New York hopes to help its citizens to become homeowners and consequently to strengthen the community.
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