New York First-Time Home Buyer: 2023 Programs and Grants

December 14, 2022 - 9 min read

What to know about buying a house in New York

Buying a home in New York can look very different depending on where you want to settle down. Buying in and around NYC, for example, will cost a lot more than a remote location in upstate NY.

Regardless of location, first-time home buyers in New York state have lots of help readily available. That can range from educational courses to financial assistance with your down payment and closing costs. Here’s how to get started.


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New York home buyer overview

The median sales price of homes in New York state was $370,000 in October 2022. That was a modest increase of 0.5% year-over-year, according to data from the New York State Association of REALTORS. But that figure covers a vast range across different locations within the Empire State.

For example, the median price in St. Lawrence County that month was $140,000. But average home prices jump to $237,500 in Albany and $599,000 in Queens. That means where you buy in New York may be way more important than statewide averages.

New York home buyer stats

Average Home Sale Price in NY1$370,000
Minimum Down Payment in NY (3%)$11,100
20% Down Payment in NY$74,000
Average Credit Score in NY2722
Maximum NY Home Buyer Grant3$30,000 forgivable loan, available statewide through SONYMA's DPAL Plus program

Down payment amounts are based on the state's most recently available average home sale price. “Minimum” down payment assumes 3% down on a conventional mortgage with a minimum credit score of 620.

If you're eligible for a VA loan (backed by the Department of Veterans Affairs) or a USDA loan (backed by the U.S. Department of Agriculture), you may not need any down payment at all.

First-time home buyer loans in NY

If you’re a first-time home buyer with a 20% down payment, you can get a conventional loan with a competitive interest rate. And you never have to pay for private mortgage insurance (PMI).

Of course, few first-time buyers have saved a 20% down. But the good news is that you don’t need that much. Not even close.

New York home buyers can often get into a new home with as little as 3% or even 0% down using one of these low-down-payment loans:

  • Conventional 97: From Freddie Mac or Fannie Mae. 3% down payment and 620 minimum credit score. You can usually stop paying mortgage insurance after a few years
  • FHA loan: Backed by the Federal Housing Administration. 3.5% down and a 580 minimum credit score. But you’re on the hook for mortgage insurance premiums (MIP) until you refinance to a different type of mortgage, move, or pay off your loan
  • VA loan: Only for veterans and service members. Zero down payment is required. Minimum credit score varies by lender but often 620. No ongoing mortgage insurance after closing. These are arguably among the most preferred mortgages available, so apply if you’re eligible
  • USDA loan: For those on low-to-moderate incomes buying in designated rural areas. Zero down payment required. Credit score requirements vary by lender but often 640. Low mortgage insurance rates
  • SONYMA mortgages: The State of New York Mortgage Agency offers low-cost loans and the possibility of down payment assistance to qualified borrowers. More information below

Note that government loan programs (including FHA, VA, and USDA home loans) require you to buy a primary residence. That means you can’t use these loans for a vacation home or investment property.

In addition, most programs let you use gifted money or down payment assistance (DPA) to cover your down payment and closing costs. Depending on the mortgage loan you choose, you could potentially get into your new house with minimal cash out of pocket.

If you’re unsure which program to choose for your first mortgage, your lender or real estate agent can help you find the right match based on your finances and home buying goals.

New York first-time home buyer programs

The State of New York Mortgage Agency (SONYMA) offers statewide assistance to first-time home buyers in NY. This includes affordable mortgage loans as well as down payment assistance.

SONYMA’s affordable housing programs can be used to finance single-family homes, multi-unit homes, condominiums, cooperatives, and manufactured homes. However, investment properties are not eligible.

In addition to the offerings below, borrowers will also find special FHA and VA loans with SONYMA. And those who are purchasing a fixer-upper in a designated area may qualify for one of its home remodel or revitalization loans.

SONYMA Achieving the Dream

The Achieving the Dream program offers low-income buyers a 30-year fixed-rate mortgage with just 3% down. You can pair this program with other grants and subsidies. In fact, the minimum cash contribution from the buyer is only 1% out of pocket; the rest can come from down payment assistance (excluding co-op buyers).

SONYMA Low Interest Rate

The Low Interest Rate program offers a mortgage loan with a 3% down payment requirement at a competitive interest rate. Like other SONYMA programs, this one comes with a 120-day rate lock for the purchase of existing homes, and a 240-day rate lock for homes under construction.

SONYMA Conventional Plus

This mortgage program may offer low-income borrowers their most affordable monthly payment. It combines a 30-year-fixed rate loan with down payment and closing cost assistance. Additionally, this program is not limited to first-time home buyers. Existing homeowners can use the Conventional Plus loan to refinance their current mortgages, too.

SONYMA eligibility requirements

There are certain eligibility requirements to qualify for SONYMA programs, including:

  • Consistent and verifiable income going back two years
  • A credit history that “shows a willingness to make your payments on time”. This undefined credit score is probably around 580 or 620, depending on the type of loan you want
  • Enough income to live comfortably and cover homeownership costs
  • Within household income limits and purchase price limits
  • You’ll use the home as your primary residence

SONYMA has a list of approved mortgage lenders; you will have to get a home loan through one of those to fully participate in its programs.

The agency also says it will put you in touch with “nonprofit housing counseling agencies across New York state to help you navigate the home buying process and prepare for successful homeownership through one-on-one counseling, homebuyer education classes, workshops, and more.”

New York first-time home buyer grants

SONYMA has two mainstream down payment assistance loans (DPALs) that are available statewide.

  • DPAL
  • DPAL Plus

While these are loans rather than grants, both come with no monthly payments and charge zero interest. Better yet, these loans are forgiven after 10 years.

That means you don’t have to pay back a cent as long as you remain in the home for a decade. If you move, sell or refinance that home before the 10 years are up, you’ll have to pay back 1/120th of the amount you borrowed for each month short of the 120 months that 10 years last.

SONYMA Down Payment Assistance Loan (DPAL)

The standard DPAL lets you borrow 3% of the purchase price (up to $15,000) or $3,000 — whichever is higher.

SONYMA DPAL Plus

The “DPAL PLUS” pilot program only opened for applications on April 29, 2021, and is altogether more generous.

DPAL Plus lets you borrow up to $30,000 toward your down payment and closing costs, capped at 20% of the home’s purchase price. By putting 20% down, you stand to get a conventional loan with no mortgage insurance payments — ever. And that’s a huge benefit.

To qualify for DPAL Plus, your income can’t exceed 60% of the area median income (AMI) where you’re buying. Not sure if you qualify? Download this PDF from SONYMA’s website for maximum eligible incomes by county.

Note that DPAL Plus has limited funding. When it runs out of money, the program will be suspended until new funds are provided. So, if you want to take advantage of it, get your application in soon.

HomeFirst Down Payment Assistance Program

The HomeFirst Down Payment Assistance Program is administered by the NYC Department of Housing Preservation and Development (HPD). It offers qualified buyers up to $100,000 toward the down payment and closing costs on a 1-4 unit family home, condominium, or cooperative in one of the five boroughs of New York City.

This DPA is a forgivable second mortgage. But if you sell or refinance before 10 years, you’ll need to repay the loan in full. That time period jumps to 15 years for loans greater than $40,000.

HomeFirst eligibility requirements:

  • 3% down payment (1% must come from the buyer)
  • Be a first-time home buyer
  • Complete a home buyer education course
  • Meet household income limits

You’ll also need to use a participating mortgage lender. HPD provides more details in its HomeFirst brochure.

Other DPA options

SONYMA or HPD may well turn out to be your best bet for down payment assistance. But be sure to check out other homeownership programs in the area where you want to buy.

Resources to find local grants and loans are listed at the end of this article. You can also ask your real estate agent, Realtor, or loan officer about down payment assistance programs near you.

Buying a home in New York’s major cities

Home prices vary widely among New York State’s biggest cities. Of course, local real estate prices will impact your down payment and mortgage payments, too. Here’s what to expect.

New York City first-time home buyers

The median home listing price in New York City was $749,000 in November 2022. That actually decreased by 14.9% year-over-year, according to Realtor.com.

If you want to buy a home at that median price, your down payment options might fall between:

  • $22,470 for a 3% down payment
  • $149,800 for a 20% down payment

Neighborhood Housing Services of New York City, Inc (NHSNYC) offers 15-year repayable loans to help you bridge the gap between your savings and your down payment requirement. But you’ll have to make monthly payments, and interest is charged on the loan amount.

NHSNYC also has a suite of online home buyer education courses and a free initial consultation.

Buffalo first-time home buyers

The median home listing price in Buffalo was $170,000 in November 2022. That was up 3% year-over-year, according to Realtor.com.

If you want to buy a home at that median price, your down payment options might fall between:

  • $5,100 for a 3% down payment
  • $34,000 for a 20% down payment

Belmont Housing Resources offers counseling and coaching for homeowners in Buffalo. It also can provide financial assistance of up to $5,000 toward down payments and closing costs.

However, its website provides no information about whether that’s a repayment loan, a forgivable loan, or a grant. Nor does it provide any eligibility information or terms. So your best bet is to call a Belmont counselor at (716) 884-7791 for details.

Rochester first-time home buyers

The median home listing price in Rochester was $149,900 in November 2022. That was up 4.3% year-over-year, according to Realtor.com.

If you want to buy a home at that median price, your down payment options might fall between:

  • $4,500 for a 3% down payment
  • $30,000 for a 20% down payment

The Bishop Sheen Ecumenical Housing Foundation website says it offers closing cost assistance as well as a range of home buyer education courses. But the site provides no further details. So call (585) 461-4263 for more information.

Where to find home buying help in NY

All the organizations we’ve listed above should provide advice freely to any first-time home buyer in the state of New York. In addition to our selection, the U.S. Department of Housing and Urban Development (HUD) provides a few lists of statewide, regional, and local resources:

NY first-time home buyer resources by city/area:

What are today’s mortgage rates in NY?

You can see today’s live mortgage rates in New York here. Experiment with a mortgage calculator to see how down payment, interest rates, homeowners insurance, and property taxes will all affect your monthly mortgage payment.

When you’re ready to start the home buying process, make sure you get personalized rate quotes from at least three mortgage lenders. Don’t just look at advertised rates online; actually apply for preapproval and compare the interest rates and fees you’re offered. Because that’s the only way to know you’re getting the best deal possible on your new home loan.


1 Source: New York State Association of REALTORS (NYSAR) report

2 Source: Experian 2022 study of 2021 and 2020 data

3Based on a review of the state's available DPA grants at the time this was written

Peter Warden
Authored By: Peter Warden

The Mortgage Reports Editor|User role

Peter Warden has been writing for a decade about mortgages, personal finance, credit cards, and insurance. His work has appeared across a wide range of media. He lives in a small town with his partner of 25 years.