SONYMA Mortgage Announces New 40 Year Mortgage

Effective May 1, 2007, SONYMA (State of New York Mortgage Agency) will accept loans that are 40 years in term. SONYMA has allocated an additional $10 million for its Closing Cost Assistance Loans (CCAL) which provides borrowers with the greater of $5,000 or 5% of their total mortgage amount to cover the expenses associated with closing their mortgage loan.

The 40 year mortgage product will offer up to 97% financing, and a below market interest rate that remains fixed for the duration of the loan. The fixed rate on the 40-year mortgage will initially be offered at 5.5% for SONYMA’s standard program, the Low Interest Rate Program. This is an estimated 0.875 % below average market rates for 40-year mortgages.

With this new 40 year product, borrowers will have lower monthly payments than a traditional 30-year mortgage. On a loan amount of $225,000, this translates into monthly savings of approximately $100. This difference can help first-time homebuyers achieve their goal of sustainable homeownership. said Priscilla Almodovar, the President and Chief Executive Officer of State of New York Mortgage Agency.

SONYMA Mortgage Loans help both low and moderate income New Yorkers achieve homeownership by providing low down payment mortgage financing at below market interest rates. In addition to satisfying income and purchase price limit requirements, eligible applicants must be first-time home buyers, as defined under the program OR except in federally designated Target Areas of the state.

By reducing or eliminating borrowers contributions towards closing costs, SONYMA’s CCAL helps borrowers overcome one of the larger obstacles to homeownership - the amount of funds generally necessary for down payment and closing costs. The assistance is available in combination with any currently available SONYMA mortgage program. It requires no monthly payments and is forgiven after ten years.

The purpose of the Agency is to create affordable homeownership opportunities for low and moderate income first time homebuyers and other qualifying homebuyers. SONYMA is a public-benefit corporation of the State of New York created in 1970.