Governor Cuomo proposes to extend homeownership in historically demarcated communities
ALBANY, NY (NEWS10) – Governor Cuomo announced a targeted package of reforms aimed at increasing homeownership rates in traditionally demarcated communities under the 2021 State of the State Framework. The package will enable low-income borrowers and moderate, especially households of color, to access homeownership and put historically underserved communities on track to close the racial wealth gap.
The reforms will increase the number of community lenders offering New York State Mortgage Agency (SONYMA) loans in low-income communities, increase down payment assistance in underserved areas of the state, and give SONYMA the flexibility to make mortgage changes on time. crisis so that borrowers can stay at home.
“We know that the racial wealth gap is essentially a real estate wealth gap and New York is taking action to correct the systemic injustices that have kept households of color from creating wealth,” Governor Cuomo said. “Expanding access to loans and assistance for first-time buyers in communities disproportionately affected by the foreclosure crisis and predatory and illegal redlining practices is an important step towards equalizing mortgage rates. home ownership and the creation of a stronger, fairer and more just New York for all. “
SONYMA offers low interest mortgage loans and programs to help qualified buyers buy their first home. SONYMA helps remove the barriers first-time homebuyers face by improving understanding of the home buying process and helping to secure the funds for a down payment. Experts say equalizing homeownership rates would reduce the racial wealth gap between white and black families by 31% and the wealth gap between white and Hispanic families by 28%.
Expand collaboration with community lenders
SONYMA’s current status requires lenders to be approved by Fannie Mae or Freddie Mac, which can be a burden on small community banks, community development finance institutions, and local credit unions. Of the 139 credit unions designated to serve low-income areas of the state, only three currently offer SONYMA mortgages.
Governor Cuomo will pass an amendment to SONYMA’s bylaws to expand eligibility to become a SONYMA lender – increasing the number of institutions capable of offering SONYMA mortgage products in underserved communities and the state in general.
Increased down payment assistance for borrowers
One of the barriers to buying a home is a lack of resources to cover the down payment and closing costs. The Governor will ask SONYMA to expand its down payment assistance program for first time borrowers by increasing the minimum down payment assistance from $ 3,000 to $ 7,500, making homeownership a priority. reality for low and moderate income families.
Stabilize owners in times of crisis
Communities that have historically been victims of redlining have also felt the disproportionate impact of recent crises, like the 2008 lockdown crisis and the COVID-19 pandemic. When low- to moderate-income homeowners experience financial disruption like short-term income loss or unexpected expenses, lenders need the flexibility to provide temporary relief to borrowers by modifying their mortgage.
The Governor will adopt an amendment to SONYMA’s statutes allowing SONYMA’s lenders to relieve borrowers in the face of major market events, in a fiscally responsible manner. Interventions may include lowering mortgage interest rates, forgiving mortgage arrears, or renegotiating mortgage terms to allow borrowers to stay in their homes in times of crisis.
The Governor will also ask SONYMA to publicize its lending options through a targeted awareness campaign, which will include a combination of print, radio and social media advertisements. The Agency will also leverage partnerships with local elected officials, professional associations, nonprofit organizations and the faith community for grassroots awareness in historically demarcated and underserved communities.