mortgages ::SONYMA :: Low Interest Rate Program

SONYMA - Low Interest Rate Program

SONYMA's Low Interest Rate Program provides qualified low and moderate income first-time homebuyers with low down payment mortgage financing on one to four family dwellings (including condominiums and cooperative apartments, as well as manufactured homes permanently attached to real property) at fixed interest rates which are below prevailing conventional rates.

Program Features:

• A fixed mortgage interest rate that is lower than the interest rate for conventional fixed rate loans;
• 1 point or origination fee;
• Financing of up to 97% of the value of the property for qualified borrowers and homes (for three and four family dwellings and cooperative apartments, the maximum financing is 90%);
• A low minimum borrower cash contribution requirement of 3% of the value of the property (5% for properties with maximum financing of 90%);
• 100 day interest rate locks for existing housing (short term lock in) and 220 days for properties under construction or rehabilitation (long term lock in);
• Terms of 20, 25, 30, or 40 years (interest rates for 40 year mortgages are 0.125% higher);
• No prepayments penalties;
• Closing Cost Assistance;
• Payment Protection in the event of temporary job loss or accident.

Eligible Borrowers must:

• Be a first time homebuyer as defined by SONYMA (This requirement is waived if the borrower seeks to purchase a home located in a Federally designated Target Area
• Meet SONYMA's credit underwriting standards. Applicants must have:
  • a steady job;
  • a good credit history;
  • sufficient income to make the mortgage payment and meet other debt payments; and
  • sufficient cash, savings, or other assets for downpayment and closing costs;
• Meet SONYMA's Household Income Limit requirements;
• Occupy the SONYMA-financed home as their permanent residence.

Note: If you currently own a residential investment or vacation home and you intend to retain ownership of the home, you will not qualify for SONYMA financing even if you are attempting to purchase a home located in a Target Area.

Eligible Properties must:

• Be located in New York State;
• Have a sales price that does not exceed SONYMA's Purchase Price Limits;
• Not be used for any business or commercial purpose;
• Be one of the following property types:
  • Existing or newly constructed one family home (includes condominiums and cooperatives);
  • Two , three , or four family home that is at least five years old as of the SONYMA loan application date and has been used only as a residence during the past five years;
  • Two family home located in a Target Area that is newly constructed or was constructed within the five years prior to the SONYMA loan application date;
• Be a maximum of 5 acres (exceptions can be made on a case by case basis);
• Have at least 500 square feet of living space (exceptions can be made on a case by case basis).

Additional Considerations:

• A SONYMA mortgage may not be used to refinance an existing mortgage and SONYMA mortgages are non assumable;
• Applicants must complete a homebuyer education course if:
  • the borrower's cash contribution in the transaction is less than 5% of the value of the property; or the financing being requested is more than 95% of the value of the property; or
  • certain other conditions exist in connection with the loan application;
• SONYMA will require a 1% lock in deposit to be paid by the applicant at loan application. The deposit will be refunded to the borrower or credited towards closing costs except if the applicant cancels or withdraws their loan application, or makes a material misrepresentation on their loan application;
• All loans with less than a 20% downpayment will require private mortgage insurance (PMI);
• All loans must be approved for pool insurance by SONYMA's mortgage pool insurer;
• All borrowers are subject to a potential "recapture tax" under Federal law.;
• An applicant whose spouse, domestic partner, fiance, or fiancee (who is not an applicant) does not meet SONYMA's definition of first time homebuyer and therefore, is not eligible for financing.
• An applicant who has used more than 10% of their current residence (or a prior residence) for a business or commercial use in the past year, is not eligible for financing.

Regarding Coops and Condos:

Borrowers purchasing a condominium or cooperative unit must satisfy certain special requirements

Exceptions for Borrowers Purchasing Homes in a Target Area:

Federal law provides certain special incentives for applicants purchasing homes in Federally-designated Target Areas. SONYMA is committed to helping revitalize these neighborhoods.

The incentives are as follows:

• The first time homebuyer requirement is eliminated;
• Household Income and home Purchase Price Limits are higher (See SONYMA's Household Income Limits and Purchase Price Limits.);
• Two family homes that are newly constructed or are less than 5 years old are eligible.

Note: If you currently own a residential investment or vacation home and you intend to retain ownership of the home, you will not qualify for SONYMA financing even if you are attempting to purchase a home located in a Target Area.

Payment Protection in the Event of Job Loss or Accident

Most Low Interest Rate Program borrowers can have peace of mind by knowing that if temporary involuntary unemployment or an accident prevents them from making their monthly mortgage payment, coverage is provided at no additional cost.

Features of HomeOpeners® MonthlyPlus payment protection plan:

• Pays up to $2,000 per month towards your monthly mortgage payment (including principal, interest, taxes and insurance) if either you or your co-borrower become involuntarily unemployed for more than thirty (30) days. Up to six (6) monthly payments will be made.

Note: If more than one borrower, a proportionate benefit is paid.

• No additional cost to you. The cost of this coverage is paid by Genworth Mortgage Insurance Corporation for any borrower obtaining PMI insurance through Genworth Mortgage Insurance Corporation.