Buying Your First Home in Brooklyn? Grants, Loans, and Programs for You

Buying your first home is an exciting time. It can also be challenging — mentally, physically, and especially financially. Luckily, there are a number of programs to help you out! Most notably, there are often grants to take advantage of that can help with a portion of your down payment, allowing you to purchase more home than you could otherwise afford. You can also apply for loans with gentler terms. If you aren’t quite fiscally ready to purchase on your own, there are programs to ease you into the homeownership role, too.

The guide below can help you find the option that is most valuable to you:

First-Time Homebuyer Grants

HPD’s HomeFirst Down Payment Assistance Program

This program could give you 6 percent of your home purchase, up to $40,000, to put toward your down payment and/or closing costs. It doesn’t need to be paid back — it’s simply a grant to move you forward as you step into the homeownership role.

You’ll need to:

Have an income that is at or under 80% of the area median income
Plan on living in the apartment you purchase for at least 10 years
Take a homebuyer education class
Have your own savings to contribute to the grant amount

Neighborhood LIFT

This program could offer you up to $20,000 in down payment assistance even if you’ve purchased a home before.

The funds do not need to be paid back.
The property needs to be owner-occupied and located in Brooklyn, Bronx, or Queens.
Houses, condos, and 1-4 bedroom buildings can qualify.

Community Homeownership Commitment Program

This program has plenty of options, including up to $10,000 in down payment assistance that doesn’t need to be repaid, up to $7,500 lended for closing costs or interest-rate reduction, fixed rate mortgages with down payments as low as 3%, and potential options that don’t require mortgage insurance. Requirements vary by program.

Loans For Your Starter Home

SONYMA

This state lending program helps renters purchase homes that are below the median sales price in New York, even if you only have 3% down to contribute.

The program is for first-time homebuyers only.
It may not work in all circumstances. Specifically co-ops, as the buildings will still require the typical 20% down to purchase.

FHA Loans

These loans are insured by the Federal Housing Association, allowing them to accept lower credit scores and/or down payment amounts.

They do not have income first-time homebuyer restrictions.
They often have higher mortgage insurance premiums than other loans.
The down payments are typically between 3.5 and 10% dependent on credit score.

PS If you’re a landlord & want to get a FHA loan, we talk about how you can qualify your rental income.

Fannie Mae’s HomeReady

This loan has a low down payment percentage and allows for various qualifications that typical mortgages lack.

Down payments are set at 3%.
Co-borrowers, including parents of adult children, can be included on the application.
Rental payments can be used to prove your ability to make payments.

VA Loans

If you are a former or current military member or the spouse of someone who has served, you may be eligible for a VA loan. These are partially guaranteed by the VA, allowing lenders to provide better terms in many circumstances.

Programs to Lift You to Homeownership

HDFC Co-Ops

These buildings are regulated by the Housing Development Fund Corporation to provide lower income brackets with access to homeownership. Some buildings go off of area median income while others are adjusted to fit the building’s maintenance and utility costs.

Rent-to-Own

This is an arrangement between tenant and landlord that sets a portion of the monthly rent aside to serve as a down payment when the renter is financially ready to purchase the home they’re living in. Some buildings have their own programs, too, like crediting rental payments to the purchase price if you buy after moving in.

Co-Investing

If you’re purchasing a townhouse or condo, you could gain support from an investor who would pay your down payment for a share of the property. This helps you get your foot in the door, even if some of your equity would go back to this person or company later on.

Of course, if you have any questions about these programs, feel free to get in touch and we can point you in the right direction. You can also discuss these options with your mortgage professional!