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Exciting Changes Coming Soon for New York First-Time Homebuyers

Buyers may be eligible for up to $15,000 toward down payment, closing costs, and homeownership counseling costs.

By Tina Lookup
Manager, Mortgage Lending, ESL Federal Credit Union

In early 2019, the Federal Home Loan Bank of New York (which supports mortgage-lending efforts for New York State) announced changes to its first-time homebuyer program to provide grant funds up to $15,000 to eligible first-time homebuyers.

The new program is expected to be available the summer of 2019. Many prospective homebuyers have asked what this change means for them. Here’s a quick rundown on what has been announced, and how you can prepare for your future home purchase.

Introducing the Homebuyer Dream Program™

There are many proposed changes to highlight within the new announcement of the Homebuyer Dream Program, including increased grant amounts, the elimination of a specific length of time to save, less upfront savings, and a more streamlined process.

Homebuyer Dream Program eligibility requirements

The Homebuyer Dream Program has indicated they will soon be offering grant assistance up to $15,000 for eligible first-time homebuyers: up to $14,500 per household for down payments and closing costs, with an additional $500 toward homeownership counseling costs.

As currently outlined in the program, to be eligible for up to $15,000 in grant funds first-time homebuyers must meet the following criteria:

  • Be a first-time homebuyer: no home ownership of a residence three years prior to the purchase date of the new property
  • Have a household income of 80% or below the area median income (currently $62,240 for 1-2 person household and $71,576 for 3+ person households in Monroe County)
  • Homebuyer must contribute $1,000 toward the purchase of the home
  • Complete a required homeownership counseling course
  • Have a fully executed purchase and sales contract of an eligible property
  • Qualify for a mortgage through your lender (like ESL Federal Credit Union)

How should I prepare for the Homebuyer Dream Program?

Unlike previous grant programs, buyers must find and submit an offer on a home before enrolling in the program. For those interested in purchasing a home and utilizing grant funds, it may be wise to complete a homeownership counseling course before looking for a home. This counseling course helps prepare you for the home buying process by covering topics such as budgeting for regular home expenses and maintenance, selecting a real estate professional, and obtaining a mortgage. ESL partners with Consumer Credit Counseling Service of Rochester, the Housing Council at Pathstone, and NeighborWorks Rochester to provide this service, with courses typically offered monthly.

Once you have determined a household budget and understanding of the home buying process, you may can begin assembling your homebuying team, including an experienced local lender, realtor, and real estate attorney. Your lender can help get you prequalified, so you can be prepared to put in an offer when you find a home you’re interested in.

Having an accepted offer is important for the Homebuyer Dream Program, because you’ll need a fully executed purchase and sales contract (i.e. an offer that both the buyer and seller’s real estate attorneys approve) to apply for the grant funds through your lender. Next, you’ll then work with your lender to apply for the grant funds up to $15,000, and complete the mortgage application.

How much money should I save for a home purchase?

While the Homebuyer Dream Program requires a $1,000 contribution towards the home purchase, it may be helpful to have additional cash for other purchase costs. With any home purchase, it’s important to have funds set aside for the following costs such as:

  • Down payment
  • One year of property taxes
  • Homeowner’s insurance
  • Closing costs
  • Your own home buyer and ownership costs (i.e. your attorney’s fees, property inspection fee, new appliances, etc.)

Grant funds, like the Homebuyer Dream Program, can help subsidize a significant portion of these purchasing costs at closing. Additionally, many homeownership counseling courses outline how creating an effective budget and plan can help you anticipate many of the costs associated with buying a home. Your homebuying team, including ESL Mortgage Originators can also help give you an estimate of closing costs and other expenses to expect.

In Summary

There’s a lot of excitement building for homebuyers around the new Homebuyer Dream Program. When purchasing a home, there are many factors to consider—which is all the more reason to find a trusted expert to help walk you through the process from start to finish. Our team of experts are here to help you each step of the way and answer any questions that may come up.