NEW YORK – May 20, 2008 – The State of New York Mortgage Agency (SONYMA) today announced it is increasing the maximum purchase price in New York City and other downstate counties to $550,000 for single family homes to encourage more families to take advantage of SONYMA’s below-market interest rate mortgages. The increase takes advantage of a recent change in Federal law.
At the same time, SONYMA announced it was committing an additional $10 million to fund its Closing Cost Assistance Loan program, which helps SONYMA homebuyers finance new homes by providing funds for closing costs.
The purchase price limits will be increased nearly 20% for loans purchased by SONYMA through December 15, 2008, and will apply to New York City and the counties of Nassau, Suffolk, Rockland, Westchester and Putnam. The increase will enable SONYMA to finance so-called “jumbo” mortgages—which are mortgages larger than $417,000.
“Raising our maximum purchase price is another example of SONYMA proactively taking the initiative to help low- and moderate-income families achieve homeownership,” Priscilla Almodovar, SONYMA President and Chief Executive Officer.
“Last year, SONYMA undertook an extensive survey of downstate home purchase prices to justify higher purchase price limits, which were then put into effect. This year, we are taking advantage of recent changes in Federal law to increase our downstate limits yet again. These changes mean more downstate first-time homebuyers can use our low interest rates to buy affordable homes that meet their needs.”
Purchase Price Limits
The new purchase price limits will enable eligible first-time homebuyers to borrow up to $550,000 from SONYMA for a single-family home in the eligible counties. The current limit is $460,300 for newly built homes and $467,000 for existing homes. The purchase price limits were also increased for two-family homes ($618,170 from $550,000), three-family homes ($748,280 from $664,820) and four-family homes ($870,160 from $826,210).
Purchase price limits were also increased for homes located in economically disadvantaged neighborhoods known as “target areas” in the eligible counties. For a single-family home in a “target area,” the ceiling was increased to $671,000 from $562,600 for a newly built home and from $570,800 for an existing home. There were similar increases for multi-family homes. For details on the higher purchase limits, visit our website:
www.nyhomes.org/home/index.asp?page=146
The higher purchase price limits were made possible by the Economic Stimulus Act of 2008 that increased loan limits for the Federal Housing Administration. The new limits are scheduled to remain in effect through the end of the year.
Closing Cost Assistance Loans (CCAL)
SONYMA offers Closing Cost Assistance Loans (CCAL) to help low- and moderate-income New Yorkers become first-time homebuyers. CCAL offers qualified homebuyers up to $5,000 or 5% of the mortgage, whichever is greater, to help pay closing costs.
With the additional $10 million, SONYMA has now allocated $120 million for closing costs loans since the program began in 2003, helping some 14,000 New Yorkers purchase their first home.
SONYMA expects that the additional $10 million allocation will leverage approximately $180 million in SONYMA mortgage dollars. These monies will be made available on a first-come, first-served basis and can be used in conjunction with any currently available SONYMA loan program. The money will also be used to pay a portion of the points that are normally paid by the borrower.
SONYMA’s Closing Cost Assistance Loan requires no repayment and is forgiven over a ten-year period. The interest rate for applicants taking advantage of CCAL is 0.5% higher than the standard SONYMA mortgage rate. The rate increase does not apply to the Homes for Veterans Program or for borrowers purchasing an ENERGY STAR® labeled home.
______
SONYMA was created in 1970 with the mission of helping low- and moderate-income families become homeowners. It offers a variety of low down payment mortgages that provide below-market fixed interest rates, as well as closing cost assistance through a network of participating lenders across the state.
SONYMA Contact: Philip Lentz
Director of Communications
212-688-4000 x679
plentz (at) nyhomes (dot) org
