Homes Bed Stuy
NYC Newswire
Homes in Bed Stuy
The HomeFirst Down Payment Assistance Program is a financial aid initiative offered by the New York City Department of Housing Preservation and Development (HPD). It helps first-time homebuyers purchase homes in any of NYC’s five boroughs by providing forgivable loans of up to $100,000. This loan can be used for a down payment or closing costs, making homeownership more accessible to low- and moderate-income families.
Who Can Qualify?
To qualify for the HomeFirst program, applicants must meet several requirements:
- First-Time Homebuyer Status – You cannot have owned a home in the past three years before purchasing a new one.
- Income Limits – Your household income must not exceed 80% of the Area Median Income (AMI), as determined by HUD. For instance, a single-person household’s income limit is $87,100, while a four-person household’s limit is $124,400.
- Homebuyer Education Course – You must complete a homebuyer education course provided by an HPD-approved counseling agency.
- Personal Financial Contribution – You must contribute at least 3% of the home’s purchase price as a down payment. At least 1% of this amount must come from your personal funds.
- Mortgage Readiness – You need a stable employment record, sufficient financial resources, and a credit score of at least 620 to qualify for a mortgage from an approved lender.
- Property Requirements – You must purchase a one-to-four family home, cooperative, or condominium that meets HUD’s housing quality standards. The home must also be used as your primary residence for at least 10 years (if the loan is $40,000 or less) or 15 years (if the loan is greater than $40,000).
Brooklyn Brownstone
NYC Newswire
Brooklyn Brownstone
Brooklyn Brownstone
NYC Newswire
Brooklyn Brownstone
How the Program Works
- Attend Homebuyer Education Classes – Prospective buyers must complete an education course through an HPD-approved counseling agency. This course helps buyers understand the home-buying process, financing options, and program guidelines.
- Receive a HomeFirst Homebuyer Certificate – After completing the course, you will receive a certificate verifying your eligibility for the forgivable loan. This certificate is valid for six months, with the option to renew for another six months.
- Apply for the Loan – The counseling agency submits your HomeFirst application to HPD’s designated Loan Servicer, which verifies your eligibility and approves the loan.
- Secure a Mortgage and Find a Home – You must obtain a mortgage from an approved lender and find a qualifying home within NYC.
- Closing Process – Once all requirements are met, the HomeFirst Loan Servicer wires the loan funds to the lender at closing, reducing your out-of-pocket costs.
Loan Terms and Conditions
- Loan Amount – The loan covers up to 20% of the home’s purchase price, with a maximum limit of $100,000.
- Forgiveness Period – If you remain in the home as your primary residence for the required time (10 or 15 years), the loan is fully forgiven. If you sell or move out before this period, you may need to repay a portion of the loan.
- No Interest or Monthly Payments – The HomeFirst loan has a 0% interest rate, meaning you won’t have to make monthly payments as long as you meet the program’s requirements.
Eligible Properties and Price Limits
HomeFirst assistance applies to various housing types, including single-family homes, two-to-four family homes, cooperatives, and condominiums. However, there are limits on the maximum purchase price, based on HUD’s annual guidelines. As of 2023, the maximum price for a single-family home ranges from $612,000 in Manhattan to $699,000 in Brooklyn.
Mortgage Requirements
To use the HomeFirst loan, you must secure a primary mortgage from an approved lender. Some key requirements include:
- Fixed-rate mortgages only (no interest-only or no-doc loans).
- Loan-to-value (LTV) ratio up to 97% and combined loan-to-value (CLTV) up to 115%.
- Debt-to-income (DTI) ratio must not exceed 55%.
- Minimum credit score of 620, though some FHA loans may allow 580.
Accessing the HomeFirst Down Payment?
Buying a home in New York City can be challenging, especially with high down payment and closing costs. The HomeFirst Down Payment Assistance Program provides a critical financial boost to make homeownership possible for more families. With forgivable loans, financial education, and structured support, HomeFirst ensures that more New Yorkers can achieve the dream of owning a home.
