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One of the biggest obstacles to owning a home is the amount of funds a borrower must have for downpayment and closing costs. To help applicants overcome this obstacle, SONYMA offers homebuyers down payment assistance in conjunction with SONYMA financing. Please read below for details about the Down Payment Assistance Loan (DPAL) offered by SONYMA.
Down Payment Assistance Loan (DPAL) allows SONYMA borrowers to secure down payment assistance through a second mortgage that can be used in combination with any currently available SONYMA program. DPALs have no interest rate and no monthly payments and will be forgiven after ten (10) years as long as the borrower keeps the SONYMA financing in place, and continues to owner occupy his or her home.
The SONYMA DPAL can now be used to pay all or a portion of a one-time mortgage insurance premium, if applicable, thus significantly reducing your monthly mortgage payment.
The Down Payment Assistance Loan cannot exceed the actual down payment and/or closing costs associated with the mortgage loan transaction; and
Additional Considerations for DPAL:
All or a portion of the Down Payment Assistance Loan may be required to be repaid or "recaptured" if the SONYMA mortgage loan is paid in full within ten (10) years of purchasing the home. The repayment of the Down Payment Assistance Loan 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 Down Payment Assistance Loan and the applicant's investment in the property (i.e.: the initial down payment (not covered by DPAL) when the home was purchased plus mortgage loan principal repayments, any closing costs and any capital improvements).
Note: Some SONYMA participating lenders may not offer down payment assistance programs. Please check with your lender before applying for financing.
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