Starting Jan 1 You May Be Able To Get Your $8,000 Tax Credit As A Cash Advance, If You Finance Through SONYMA!
New York State will offer cash advances of up to $8,000 on the Federal homebuyer tax credit for borrowers using a State of New York Mortgage Agency (SONYMA) mortgage to purchase a home beginning January 1, 2010.
Homebuyers 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 homebuyer tax credit after filing their annual tax return. SONYMA, a State agency that provides competitive interest rate mortgages to low- and moderate-income homebuyers, will launch the TCAL program on January 1, 2010.
Under the Federal program recently extended by Congress, first-time homebuyers 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 homebuyers are eligible for a Federal tax credit of up to $6,500.) For details on the Federal tax credit program, visit: http://www.irs.gov/newsroom/article/0,,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 homebuyers 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 http://www.nyhomes.org.
