Many homes in New York State that have been foreclosed and/or sold as a "short sale" suffer from deferred maintenance and require repair. The SONYMA Own it, Fix it New York! Home Mortgage is designed to provide streamlined mortgage financing to homebuyers for the purchase and repair of homes requiring no more than $25,000 in improvements. It is an enhancement that can be utilized with the below stated SONYMA programs for 1- and 2-family homes, PUDs and condominiums.
Available under SONYMA's Low Interest Rate Program and the Achieving the Dream Program (including Homes for Veterans Program);
Financing up to the lower of 97% of the "after-improved" appraised value or the Purchase Price plus financeable repairs and allowable "soft" costs;
Availability of down payment assistance (higher of $3,000 or 3% of the home purchase price, not to exceed $15,000);
Eligible Repairs up to the lower of 20% of the "after-improved" appraised value or $25,000.
Includes repair or replacement of plumbing, electrical, and heating systems, additions, modernization of kitchens and bathrooms, new siding and windows, etc. (Please click here for a complete list of eligible and ineligible renovations).
The renovation cost must be:
Existing 1- and 2-family homes. PUDs and condominiums are eligible providing the homeowners association permits the proposed renovations. Manufactured homes and cooperatives are not eligible.
Selecting a qualified and reputable contractor is critical to a smooth home improvement project. Applicants (with the Lenders assistance) are responsible for selecting a contractor that is reputable, insured, and able to perform the work specified in the home improvement contract. Before signing a contract for home repairs, SONYMA recommends that you do the following:
Contact the New York State contractor licensing agency and local building department to verify that the contractor has a clean record. Obtain copies of any licenses, where applicable. (home improvement contractors must be licensed in New York City, Suffolk, Nassau, Westchester, Putnam, and Rockland counties.);
Ensure that the contractor is sufficiently insured to protect borrower(s) against property damage and losses caused by the contractor, its employees or subcontractors, and against on-site injuries to the contractor, its employees or subcontractors;
In areas where licensing is not required, do all of the following:
Contact local trade associations;
Look for professional certifications such as Certified Graduate Remodeler (CGR);
Access the New York State Attorney General's website, "Know Your Contractor" or call the local or state consumer protection agency and the Better Business Bureau to find out if there are any unresolved complaints filed against the contractor; and
Check the contractor's references.
On the date the home purchase is closed, the funds for the renovations will be placed in an escrow account held by the Lender. Funds will periodically be paid to the contractor(s) by the Lender as the renovation work progresses and after the Lender's appraiser has inspected the repairs and determined that it has been completed in a satisfactory manner;
Borrowers will be required to place an additional amount equal to at least 10% of the estimated cost of the repairs into the escrow account mentioned above to cover any unforeseen repairs or deficiencies discovered once the home improvements begin. This reserve amount may be financed with the loan proceeds or paid by the Borrower. If financed, any unused funds remaining in the escrow account at construction completion must either be used for additional repairs or applied as principal curtailment.
The combination of the home purchase price, the cost of repairs and any financed "soft" costs cannot exceed SONYMA's Purchase Price Limits.
Applicants cannot act as their own contractor unless home construction contracting is their full time occupation and they are appropriately licensed and insured as described above. SONYMA will not permit borrowers to be compensated for "sweat equity" in the transaction;
The renovations must be completed within ninety (90) calendar days of the home purchase closing date;
Borrowers purchasing a condominium unit must satisfy certain special requirements. (Click here for special requirements for condominiums).
To be eligible for the Own it, Fix it New York! Home Mortgage, the condominium association must allow the proposed renovations.
Note: Some SONYMA Participating Lenders may not offer the Own it, Fix it New York! Home Mortgage. Please check with your Lender before applying for financing.
Last updated: 3/22/2011
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