NEW YORK – August 5, 2008 – (RealEstateRama) — The State of New York Mortgage Agency (SONYMA) has priced the issuance of $168 million in bonds to fund near-record demand for the Agency’s low-interest fixed-rate mortgage loans, which are available to low- and moderate-income first-time homebuyers throughout New York State.
With the proceeds of this bond issuance, SONYMA expects to purchase approximately $323 million in mortgages through September 15th, resulting in 2,468 new mortgages to homeowners throughout New York. This reflects a 76% increase from the $183 million in mortgages purchased during the same period last year. New loan applications (or reservations) for the first seven months of 2008 have also been running at record levels, indicating that mortgage purchases for all of 2008 could approach SONYMA’s record of $565 million. (Mortgage purchases typically lag behind reservations by about three months.)
Priscilla Almodovar, SONYMA President and Chief Executive Officer, said SONYMA’s increased demand is due to program changes and outreach made in 2007 and 2008 as well as a tightening of credit by the private sector, which has encouraged more homebuyers to seek out SONYMA mortgages.
“SONYMA has been able to respond to this surge in demand because we streamlined our procedures and increased our outreach to the lending community. By doing so, we remain a viable option in tough economic times for working families who wish to find a cost-saving – and safe – way to buy their first home in New York,” Ms. Almodovar said. “SONYMA’s commitment to this market is part of the Paterson’s Administration mission to make New York more affordable for hard-working New Yorkers as well as to strengthen our neighborhoods.”
SONYMA offers a wide variety of mortgages, most of which are intended for first-time homebuyers. Among the agency’s most popular products are 30- and 40-year fixed-rate mortgages that are typically at least half a percentage point below conventional mortgages. SONYMA’s current interest rate is 5.875% for a 30-year mortgage with a 3% down payment.
“During the last one-and-a-half years, SONYMA has made a concerted effort to make our mortgages and our application process more user-friendly,” said George Leocata, SONYMA Senior Vice President for Single Family Programs. “We hired staff dedicated to training lenders and others in the real estate community. We simplified our procedures, implemented an online system to help lenders, and created new mortgage products and tools to respond to the marketplace. The result is more demand for SONYMA mortgages than ever before.”
The $168 million bond issue is SONYMA’s second issuance this year to fund its mortgages. Earlier this year, it sold $97 million in bonds. With the continuing strong demand for SONYMA mortgages, it is anticipated that SONYMA will issue another $250 million bonds by the end of the year. The bond issue is expected to close later next week.
The underwriter for the upcoming bond issue will be Goldman Sachs & Co.; bond counsel will be Hawkins Delafield & Wood; and the financial advisers are Piper Jaffray Companies and Swap Financial Group. cfX Incorporated is the Agency’s cash flow consultant.
SONYMA purchases its mortgages from participating lenders and retains them for the life of the mortgage. It currently does not sell its mortgages to third parties or financial investors.
The surge in volume has occurred in all regions of the state, though the most dramatic increases have been in the downstate area, principally on Long Island and in New York City.
Click here for a table listing mortgages purchased or expected to be purchased by SONYMA through September 15, 2008, broken down by county and region.
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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.
For information about SONYMA mortgages, call 800-382-HOME (4663) or visit our website: www.nyhomes.org.
Contact: Philip Lentz
Director of Communications
212-872-0679
plentz (at) nyhomes (dot) org
