New York has added $41 million to its existing first-time homebuyers' program, aiming to help more than 1,000 residents become homeowners over the next five years.
Mayor Eric Adams' office said the HomeFirst Down Payment Assistance Program has been a success while powered by federal funding during the past decade, but more dollars from the city will now put the program's total funding at $82 million.
Created in 2004, HomeFirst loans up to $100,000 to city residents who are first-time homebuyers and have completed a homebuyer education course. The funds can be used for down payment or closing costs on a one-to-four-family home, condominium or co-op in Manhattan, Brooklyn, Queens, Staten Island or the Bronx. The program has already helped more than 1,100 New Yorkers become homeowners, Adams' office said.
"There’s no greater feeling than being handed the keys to a place you can call home," the mayor said in a statement. "Thanks to today’s investment, more families will be even closer to making the dream of homeownership a reality.”
The one-two punch of rising mortgage rates and asking prices has made purchasing a home increasingly difficult for the average American. Many people have turned to first-time grant programs, which offer free money toward down payments or closing costs. Other homebuyers have opted for down-payment assistance programs, which are essentially loans with favorable terms for the applicant.
As of January, there were 2,466 down-payment grant or assistance programs nationwide, of which 968 were administered by a city or town, according to Atlanta-based real estate tech firm Down Payment Resource. New York state has 83 programs, the sixth-most statewide in the nation.
Program requirements
For the New York City initiative, anyone who uses $40,000 or less of the HomeFirst funds must live in their new home for at least 10 years. Anyone awarded more than $40,000 must stay in their home for at least 15 years. The loan comes with no interest and can be forgiven, according to the application documents.
Adams first announced the additional funding during his State of the City address last month.
With the additional funds, Adams' office also increased the number of New Yorkers who can apply for the program. Under previous guidelines, an applicant could make no more than 80 percent of the area's median income. Officials have increased the criteria to 120 percent of the AMI, effectively doubling the number of potential applicants, the mayor's office said.
"Expanding this program not only speaks to its success, but also addresses the growing demand for real, affordable homeownership options and the need to speed up the process for families ready to take the next step,” Adolfo Carrion Jr., New York's Housing and Preservation Development commissioner, said in a statement.
The added funding lands as New York is facing a massive housing crisis. New York has built extra housing in recent years, but the number of new units has not kept pace with the city's rising population.
New York's population has grown from 8.1 million in 2010 to 8.8 million in 2020, according to state statistics. However, the city has only added roughly 61,000 new housing units across the boroughs between 2021 and 2023, according to the latest housing survey.
New homes
To address the issue, Adams has ordered city officials to look for potential land for new housing developments — particularly on plots the city already owns. The city also approved a series of zoning law changes late last year under its City of Yes plan that's slated to add 80,000 more housing units over the next 15 years.
Finding an affordable place to live in the Big Apple has just been one part of the struggle for residents, housing experts have said.
"Access to down payment funds has been one of the biggest barriers New Yorkers face when trying to purchase a home in our high-cost market, especially for lower-income families and communities of color," Christie Peale, CEO of the Center for NYC Neighborhoods, said in a statement. "Doubling the number of households that HomeFirst will serve is an important step towards a more affordable New York City.”