Governor Paterson Announces Federal Homebuyer Tax Credit Cash Advances For Eligible SONYMA Borrowers

Program to Launch on January 1, 2010

Governor David A. Paterson today announced that New York State will offer cash advances of up to $8,000 on the Federal home buyer tax credit for borrowers using a State of New York Mortgage Agency (SONYMA) mortgage to purchase a home.

Home buyers will be able to use SONYMA’s new Tax Credit Advance Loan (TCAL) toward their down payment or closing costs. The advance can be repaid without interest when homeowners receive their Federal home buyer tax credit after filing their annual tax return. SONYMA, a State agency that provides competitive interest rate mortgages to low- and moderate-income home buyers, will launch the TCAL program on January 1, 2010.

“This new program will encourage home ownership throughout New York State and provide an important boost to our economy,” Governor Paterson said. “Reviving the housing market is vital to generating economic activity and the tax revenues the State and local governments need to provide vital services.”

Marian Zucker, SONYMA Executive Vice President, said: “This tax credit program, along with our new Down Payment Assistance Loan product, will provide more options to more New Yorkers so they will be able to afford to purchase a home. The new Tax Credit Advance Loan program reinforces SONYMA’s mission to expand and promote home ownership in New York State.”

Philip LaRocque, Executive Vice President of the New York State Builders Association, said: “The New York State Builders Association has always stressed that for a first-time home buyer tax credit to work, you need to put that money in the hands of the buyer, especially first-time buyers, who need more help with closing costs. We believe SONYMA’s action will get many potential home buyers off the fence and closing on homes, which will help spur our state’s economy out of this recession much faster.”

Daniel J. Hartnett, President of the New York State Association of REALTORS┬«, said: “Today, New York’s REALTORS┬« applaud Governor Paterson for his leadership in helping to ease the path to home ownership for our fellow New Yorkers who are striving to achieve the American Dream. The Tax Credit Advance Loan will particularly help first-time home buyers who struggle to save enough money to cover all of New York’s highest in the nation up-front costs of purchasing a home. Many will now be able to close that gap by utilizing the federal home buyer tax credit at the closing table. This is a win for all New Yorkers as a healthy housing market will help lead our economic recovery.”

Under the Federal program recently extended by Congress, first-time home buyers who purchase a home before July 1, 2010, are eligible to receive a Federal tax credit of up to $8,000. The income limit for this program is $125,000 for single taxpayers and $225,000 for married couples filing joint returns. (Existing home buyers are eligible for a Federal tax credit of up to $6,500.) For details on the Federal tax credit program, visit:,,id=187935,00.html

A TCAL advance loan will be available to potential homeowners using any currently available SONYMA mortgage program. Borrowers can apply for a TCAL loan when they apply for a SONYMA mortgage at a participating lender. After approval of the loan application, SONYMA will advance a TCAL loan (based on their maximum Federal tax credit) to borrowers on the home closing date. Homeowners will receive their tax credit from the Federal government in the spring of 2011, at which time they can repay the SONYMA TCAL loan without interest.

If the TCAL loan is not fully repaid by June 30, 2011, it will be amortized over 10 years at 1% above the interest rate on the borrower’s SONYMA first mortgage. Monthly payments on the TCAL loan will be due starting August, 2011. In effect, the TCAL loan will become a 10-year second mortgage if it is not repaid by June 30, 2011.

As with all SONYMA programs, income and purchase price limits will apply to participants of the TCAL program. However, SONYMA’s first-time homeowner requirement will not apply to U.S. military veterans or borrowers purchasing a home in a Federally-designated “target” area, which is a census tract that is economically distressed.

The TCAL program is one of two products offered by SONYMA to help borrowers to bridge the affordability gap by providing funds needed to purchase a home. SONYMA’s other assistance program is called the Down Payment Assistance Loan (DPAL).

Under DPAL, SONYMA will loan home buyers the higher of $3,000 or 3% of their purchase price (up to $10,000) to help with their down payment or closing costs. A DPAL loan is forgiven for homeowners who remain in their homes for 10 years. But in most cases, borrowers who take a DPAL loan will pay an interest rate 0.5% higher than SONYMA’s standard rate on their SONYMA first mortgage. Like TCAL, borrowers can apply for a DPAL loan when they apply for a SONYMA mortgage from a participating lender.

For more details on SONYMA’s TCAL program, please visit

Charles D’Alessandro
Fillmore Real Estate
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