Closing Cost Assistance Loans

One of the biggest obstacles to owning a home is the amount of funds an applicant must have for downpayment and closing costs. To help applicants overcome this obstacle, SONYMA offers closing cost assistance in combination with any currently available SONYMA program.

Product Features: 

• Assistance requires no monthly payments and is forgiven after 10 years;
  
  
• Minimum assistance is $1,000;
  
  
• Maximum assistance is the higher of:
  
  
  • $3,000; or
    
    
  • 3% of the SONYMA mortgage loan amount.

In no event, however, shall the amount of the Closing Cost Assistance Loan exceed the actual closing costs associated with the mortgage loan transaction;

• May only be used in conjunction with a mortgage loan obtained under any currently offered SONYMA program (the interest rate for applicants opting to utilize the closing cost assistance loan will be 0.50% higher than the interest rate currently being offered by SONYMA) (click here to see current SONYMA rates);
  
  
  
• Closing costs eligible to be financed by the Closing Cost Assistance Loan include all SONYMA permissible expenses such as:
  
  
  • expenses paid at closing such as attorney, title insurance and survey fees; points, if applicable; recording taxes and fees;
    
  • prepaid escrows for property taxes and insurance;
  • structural inspection/engineer's report and pest inspections; and

• the reimbursement of fees paid prior to loan closing (i.e., application, credit, flood certification and appraisal fees).  

All closing costs must be reasonable and customary and may not exceed those charges and fees normally charged on a conventionally financed home located in the area where the financed property is located.

Additional Considerations:

• Regardless of the SONYMA program for which you apply, borrowers must make a minimum cash contribution of 1% of the value of the property (3% for properties with maximum financing of 90%);
  
  
• The Closing Cost Assistance Loan may be used for any property type eligible under the program that SONYMA finances, including cooperatives;
  
  
• Any gifts from an immediate family member that will be applied toward downpayment and/or closing costs will be considered when calculating the amount of the Closing Cost Assistance Loan. Gift funds in excess of the amount necessary to close your loan may reduce the amount of assistance from SONYMA; 
  
  
• All or a portion of the Closing Cost Assistance Loan (CCAL) may be required to be repaid or "recaptured" if the SONYMA mortgage loan is paid in full within 10 years of purchasing the home. The repayment of the CCAL will be reduced for each month the applicant lives in the property and the SONYMA mortgage remains outstanding. Further, the amount owed would be eliminated or reduced if the SONYMA financed property is sold and the proceeds are insufficient to cover the amount of the CCAL and the applicant's investment in the property (the initial downpayment when the home was purchased plus mortgage loan principal repayments, any closing costs and any capital improvements).