NEW YORK – December 13, 2007 – The State of New York Mortgage Agency (SONYMA) today allocated $20 million to extend the Homes for Veterans Program, which helps military veterans buy homes with low-cost mortgages, and its Closing Cost Assistance Loan product, which helps SONYMA borrowers finance new homes by providing funds for closing costs.
Since the Homes for Veterans Program was launched last spring by SONYMA and the NYS Division of Veterans’ Affairs, SONYMA has purchased 31 veterans’ mortgages. Another 34 are in its pipeline. Most of the original $10 million allocated to the program has been expended to fund these loans. SONYMA decided to allocate another $10 million from its upcoming $125 million bond issue to continue the veterans program into 2008.
“The veterans program has been a great success and we are very proud to be able to extend it for another year,” said Priscilla Almodovar, President and Chief Executive Officer of SONYMA. “This is a win-win program for New York. It enables us to help New Yorkers who have sacrificed for our country and it promotes homeownership across the State.”
“Continuing the Homes for Veterans Program in this manner is tangible proof that Governor Spitzer and SONYMA understand the impact being felt by veterans in the current home mortgage environment, said Jim McDonough, Director of the NYS Division of Veterans’ Affairs. “That understanding is reflected in today’s commitment to doing everything possible to better care for our veterans’ financial concerns.”
The Homes for Veterans Program offers fixed-rate mortgages with interest rates 0.5% below the already low interest rates charged on SONYMA mortgages with closing cost assistance. The current rate for a 30-year SONYMA mortgage is 5.5%. The program also features no points and requires a cash contribution from the applicant of only 1%. The mortgages are offered exclusively through M&T Bank throughout New York State.
The program was made possible by a change in Federal law that enables SONYMA to waive its first-time homebuyer requirement for any veteran (and spouse or co-borrower) who served in active military, naval, or air service and has been discharged or released from their military duties under conditions other than dishonorable.
To qualify, veterans must provide proof of active duty and proof of release from duty under conditions other than dishonorable by submitting DD Form 214, Certificate of Release or Discharge from Active Duty.
SONYMA’s income and home purchase price limits apply, as do other eligibility requirements. Limits vary based on which SONYMA program is selected, household size and location of the prospective home.
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 today’s new allocation of $10 million, SONYMA has now allocated $110 million for closing costs loans since the program began in 2003, helping approximately 17,800 New Yorkers purchase their first home.
“The closing cost assistance loan provides genuine help for first-time homebuyers,” Ms. Almodovar said. “One of the biggest obstacles to purchasing a home is the amount of funds new homeowners must bring to their closing, both for the down payment and closing costs. The CCAL program helps bridge that gap and brings homeownership to thousands of qualified buyers.”
SONYMA expects that the additional $10 million allocation will leverage approximately $227 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.
For more information about the Homes for Veterans Program and the Closing Cost Assistance Program, call SONYMA toll free at 1-800-382-HOME (4663) or visit the SONYMA website: http://www.nyhomes.org/.
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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.
The New York State Division of Veterans’ Affairs was created in 1945 as part of the Executive Department to assist veterans, members of the armed forces, their families and their dependents in securing benefits earned through military service.
SONYMA Contact: Philip Lentz
Director of Communications
212-688-4000 ext. 679
plentz (at) nyhomes (dot) org
NYSDVA Contact: Michelle LaRock
518-474-6114
MLaRock (at) veterans.state.ny (dot) us
