Both New York State and NYC have programs in place that help first-time homebuyers make this important purchase.

Buying a home in New York City is expensive, as it remains one of the most competitive housing markets in the country. There are challenges associated with buying elsewhere in the state, too, particularly among first-time homebuyers without equity in an existing property.

Fortunately, there are programs in place to aid first-time homebuyers as they make one of the most important purchases in their lifetimes. 

These programs are sponsored by both the state government and NYC’s Department of Housing Preservation and Development, so there’s help available no matter where you’re looking to buy.

Here’s a look at the current real estate market throughout New York, along with information on the first-time homebuyers’ programs that might be available to you.

How New York’s real estate market looks

The COVID-19 pandemic did a lot of damage to New York’s economy, with NYC seeing some of the country’s worst job losses. The state is recovering, though, and the real estate market shows vast improvement for the first quarter of 2021 compared to the same period in 2020.

Statewide, pending sales are up nearly 55%, while closed sales have increased by about 33%. These numbers suggest that people are buying homes again, which is a clear sign that the economy is improving. 

However, it’s also worth noting that inventory is down by 21%, and the median sale price is up by more than 27%, which could become a barrier for those looking to get into the market for the first time. The average sale price increased by 21%, too, and it now sits at $454,571 in New York State.

New York City was the epicenter of the pandemic in the US, and it has seen its economy recover at a slower pace. Currently, most homes stay on the market for 98 days and receive only three offers in that time. The average sale price is up 6.4%, but the price per square foot is down by 1.6%. 

Homes in NYC are selling, on average, for 1.9% below asking, although the median list price is up 21%. These numbers mean it’s possible to find deals on real estate in New York City, particularly if you come across a motivated seller who has been sitting on a listing for months.

It’s also worth noting that over 110,000 people moved away from New York City in 2020. If that trend continues, we could see even more homes hitting the market.

New York State programs

To assist with the home-buying process, New York State has implemented various first-time homebuyers’ programs. 

For starters, the Low Interest Rate Program ensures that buyers only have to contribute 3% of the total loan amount to their down payment. The mortgage is on a 30-year fixed rate and offers competitive interest rates. 

Through the State of New York Mortgage Agency’s (SONYMA) Conventional Plus Program and the FHA Plus Program, down payment assistance and 30-year, fixed-rate mortgages are also available. 

Another option you might have available to you is a Down Payment Assistance Loan (DPAL). You can borrow up to 3% of your home’s purchase price at 0% interest to use as a down payment through this program. You don’t have to make monthly payments on the amount borrowed, and if you’re still living in the same home in 10 years, the entire loan is forgiven.

There are low-interest mortgages available to active-duty military personnel and veterans. You can also access low-interest loans for remodeling existing spaces or grants for upgrading them with Energy Star-rated appliances.

To access one of these programs, you’ll have to visit one of SONYMA’s participating lenders. First-time home buyers applying to the Low Interest Rate Program will have to prove they have good credit and can make monthly payments, while Conventional Plus applicants must earn less than 80% of their area’s median income. 

New York City home-buying assistance

Help is available for first-time buyers in New York City through the NYC Housing Preservation & Development’s HomeFirst Down Payment Assistance Program

With this program, you can receive up to $40,000 to put toward the down payment and closing costs for any condo, cooperative, or one to four-bedroom house in any of the five boroughs.

To qualify, it must be your first home purchase, and you have to complete a homebuyer education course. You should also have some savings to contribute to the down payment, make sure the home passes a Housing Quality Standards (HQS) inspection, and live in the home for at least 10 years after purchase. 

Applicants must also meet the income eligibility requirements with a household income that’s less than 80% of the Area Median Income (AMI).

Buying a home in New York

Purchasing a home in New York City and the rest of the state is expensive — and prices will only go up as the post-pandemic recovery continues. But New York City, in particular, is arguably experiencing a buyer’s market, which may make now a good time to take advantage of homebuyers’ assistance programs.

Once you buy your home, a necessary component will be insuring it. Homeowners policies vary and there are ways to save on premiums, so speak with the experts at NICRIS Insurance to find the right policy.

NICRIS Insurance focuses on providing clients with the appropriate suite of products to protect them, their interests, and their loved ones. If you need some insurance advice or would like a free, personalized insurance review, just drop us a line, visit our offices Monday to Friday 9 to 5, or call (516) 544-0006.