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SONYMA Down Payment Assistance Loan (DPAL)

Administered by:

State of New York Mortgage Agency (SONYMA)

· State · Forgivable Loan

Funding status: Active

About the SONYMA Down Payment Assistance Loan (DPAL)

The SONYMA Down Payment Assistance Loan (DPAL) is a 0% interest second mortgage from the State of New York Mortgage Agency that pays toward a down payment, closing costs or mortgage insurance. It equals the greater of $3,000 or 3% of the purchase price, capped at $15,000, with a $1,000 minimum. DPAL is an add-on, not a standalone loan, so it only works alongside a SONYMA first mortgage from a participating lender.

DPAL has no income chart of its own. You must meet the limits of the SONYMA first mortgage it rides on, effective for reservations accepted July 6, 2026. Under the Low Interest Rate Program, most upstate non-target counties allow $111,900 for a one-or-two person household and $128,685 for three or more. New York City, Westchester, Rockland and Putnam allow $203,520 and $237,440, while Achieving the Dream drops to $89,520 and $102,940 upstate. One-family price limits are $566,350 upstate and $1,306,970 downstate, higher in Target Areas. You count as a first-time buyer if you have not owned a primary residence in three years, and the rule is waived for honorably discharged veterans and Target Area purchases. SONYMA sets no minimum credit score, but caps ratios at 40% housing and 45% total debt. Household size counts every resident, including children.

DPAL carries no monthly payment and is forgiven after 10 years, with the repayable balance dropping by 1/120 each month you live in the home. The catch is a first mortgage rate 0.40% higher, waived only on Graduate to Homeownership, Homes for Veterans and ENERGY STAR loans. Buyers at or below 60% of area median income can instead pursue DPAL PLUS 2026, worth up to $30,000 with a $500,000 price cap.

How much assistance

Greater of $3,000 or 3% of the purchase price, capped at $15,000 (minimum $1,000); cannot exceed actual down payment and closing costs

0% interest, no monthly payments. Forgiven after 10 years of owner-occupancy; repayable balance drops by 1/120 each month. Unforgiven balance due on sale or refinance within 10 years; any shortfall in sale proceeds is forgiven. SONYMA first mortgage rate is 0.40% higher with DPAL (not on Graduate to Homeownership, Homes for Veterans or ENERGY STAR loans).

Eligibility

Income limits: Set by the SONYMA first mortgage program (limits for reservations accepted July 6, 2026). Low Interest Rate Program, non-target areas: $111,900 (1-2 persons) / $128,685 (3+) in most upstate counties, up to $203,520 / $237,440 in NYC, Westchester, Rockland and Putnam. Achieving the Dream is lower ($89,520 / $102,940 upstate). Target areas higher.
First-time buyer required: Yes — Has not owned a primary residence in the past 3 years. Waived for honorably discharged veterans and for purchases in federally designated Target Areas (repeat buyers must sell their existing home).
Geographic restrictions: Must purchase within New York State. Must be used with a SONYMA mortgage.
Homebuyer education required: Yes

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housebuyerguides

How to Apply for SONYMA Down Payment Assistance Loan (DPAL)

Step 1: Check SONYMA income and price limits

Open the Low Interest Rate Program chart at hcr.ny.gov/lirp-income-and-purchase-price-limits and the Achieving the Dream chart at hcr.ny.gov/atd-income-and-purchase-price-limits. Find your county, then use the one-or-two person or three-plus column based on everyone living in the home, including children. Check whether the address sits in a federally designated Target Area, which raises the limits and waives the first-time buyer rule.

Step 2: Complete a homebuyer education course

SONYMA requires every borrower using DPAL to finish homebuyer education before loan approval. Counseling from a HUD-approved agency is preferred, though web-based courses from a private mortgage insurance company are accepted. HomeSmartNY at homesmartnewyork.org lists approved New York counselors. Buyers of a two-to-four family home, or a one-family home with a legal accessory unit, also need landlord counseling from a HUD-approved agency.

Step 3: Find a participating lender offering DPAL

SONYMA does not take applications directly, so you apply through one of its participating banks, credit unions or mortgage companies. The lender list is linked from hcr.ny.gov/how-apply. Not every SONYMA lender offers DPAL, so ask about it on the first call. SONYMA's own line is 1-800-382-4663 if you need help confirming which lenders in your county originate DPAL loans.

Step 4: Get pre-approved for the first mortgage

The lender reviews two years of steady, verifiable income, your credit report and your debts. SONYMA caps the housing payment at 40% of income and total debt at 45%. Applicants without three credit lines open for 12 months are manually underwritten, and rent or utility payment history can serve as non-traditional credit. Plan on bringing at least 1% of the price from your own funds.

Step 5: Choose an eligible home and lock the rate

Eligible homes include one-to-four family houses, condos, co-ops and manufactured homes on owned land anywhere in New York State. Co-ops and three-to-four family homes need a 3% cash contribution instead of 1%. Once your offer is accepted, the lender reserves the SONYMA loan and DPAL together, and Low Interest Rate Program locks run 120 days on existing homes and completed new construction.

Step 6: Close on both the first mortgage and DPAL

At closing you sign the SONYMA first mortgage plus a separate DPAL second mortgage, which must sit directly behind the first lien. New York mortgage tax and recording fees apply to the DPAL note as well. DPAL cannot exceed your actual down payment and closing costs, and cash back at closing is not allowed except in special circumstances, so your lender sizes the loan to the final settlement figures.

Real Cost Example

On a $265,000 home in Albany, near the city's median price, the SONYMA Low Interest Rate Program can finance up to 97% of the value, a $257,050 first mortgage. That leaves a $7,950 down payment. Because 3% of $265,000 is $7,950, above the $3,000 floor and under the $15,000 cap, DPAL can cover the entire down payment at 0% interest with no monthly payment.

Estimated closing costs in the Albany area run $5,500 to $8,000, so total cash to close is about $13,450 to $15,950. With DPAL covering $7,950, the buyer still brings $5,500 to $8,000, which also meets SONYMA's 1% minimum of $2,650 from personal funds. The tradeoff is the 0.40% rate increase, roughly $65 to $70 more per month on $257,050.

A first-time buyer at or below 80% of area median income could also ask a lender that is both a SONYMA participant and a Federal Home Loan Bank of New York member about the Homebuyer Dream Program, a grant of up to $30,000. Together, the two could cover the full $13,450 to $15,950, though DPAL is sized so combined help never exceeds actual costs.

Combining With Other Programs

DPAL can be paired with outside down payment help, as long as that money sits behind it. SONYMA accepts subordinate financing from government agencies, nonprofits and other approved sources, which must rank below the DPAL lien unless a parity agreement is signed. The Federal Home Loan Bank of New York's Homebuyer Dream Program grants up to $30,000 to first-time buyers at or below 80% of area median income, with 2026 funds open through November 27 or until exhausted.

DPAL cannot be used with an FHA, conventional or VA first mortgage outside SONYMA's programs, because it is only available as an add-on to a SONYMA loan. It also cannot exceed your real down payment and closing costs, and it cannot be placed behind another mortgage. Households at or below 60% of area median income should compare it with DPAL PLUS 2026, which reaches $30,000. SONYMA answers questions at 1-800-382-4663.

To avoid DPAL's 0.40% rate increase, ask whether you fit Graduate to Homeownership, Homes for Veterans or the ENERGY STAR option, where the bump does not apply. Gift funds can also reduce cash needed, and a gift that brings the loan to 80% of value or less removes the 1% personal contribution rule.

Pros and Cons

The SONYMA DPAL turns a 3% down payment into a near-zero cash purchase for many New York buyers. On a $265,000 home it supplies $7,950 at 0% interest with no monthly payment, and the full amount is forgiven after 10 years of ownership. Income limits are generous, reaching $111,900 upstate and $203,520 in New York City for small households. SONYMA sets no minimum credit score, and DPAL can be added to any SONYMA mortgage, including co-ops and two-to-four family homes.

The biggest drawback is the 0.40% higher first mortgage rate, which lasts the life of the loan even after DPAL is forgiven, costing roughly $65 to $70 a month on a $257,050 balance. Selling or refinancing within 10 years triggers repayment of the unforgiven balance. Not every SONYMA lender offers DPAL, buyers must still contribute 1% of their own funds, and the cap of $15,000 covers little in high-cost downstate markets. Lower-income buyers should compare DPAL PLUS 2026 at up to $30,000 or the FHLBNY Homebuyer Dream Program grant.

Frequently Asked Questions

How much is the SONYMA down payment assistance loan?+

$3,000 to $15,000 for most buyers. DPAL equals the greater of $3,000 or 3% of the purchase price, capped at $15,000, so a $265,000 home earns $7,950 and any home priced at $500,000 or more hits the $15,000 ceiling. The minimum loan is $1,000, and the amount can never exceed your actual down payment and closing costs. Buyers at or below 60% of area median income may qualify for DPAL PLUS 2026 instead, which reaches $30,000.

Do I have to pay back SONYMA DPAL?+

No, as long as you keep the home as your primary residence for 10 years. DPAL charges 0% interest and has no monthly payment, and the amount you owe drops by 1/120 each month you live there. If you sell or refinance before 10 years, you repay only the unforgiven balance, and SONYMA forgives any shortfall if sale proceeds do not cover it. After 120 months, the entire loan is forgiven.

Do I have to be a first-time homebuyer to get SONYMA DPAL?+

Yes, in most cases. SONYMA treats you as a first-time buyer if you have not owned a primary residence in the past three years. The rule is waived for honorably discharged veterans and for anyone purchasing in a federally designated Target Area. Repeat buyers using the Target Area exception must sell their current home, and anyone keeping a vacation home or investment property is ineligible for SONYMA financing.

Does SONYMA DPAL raise my mortgage interest rate?+

Yes. A SONYMA first mortgage paired with DPAL carries an interest rate 0.40% higher than the same loan without it. On a $257,050 30-year loan, that adds roughly $65 to $70 a month at today's typical range of rates, and the higher rate stays after DPAL is forgiven. The increase does not apply to Graduate to Homeownership, Homes for Veterans or ENERGY STAR loans, so ask your lender whether you fit one of those.

What credit score do I need for a SONYMA DPAL loan?+

No minimum score is set by SONYMA, according to its credit underwriting notes, though lenders and mortgage insurers may apply their own floors. SONYMA instead caps the housing payment at 40% of income and total debt at 45%. Applicants without three credit lines open for 12 months go through manual underwriting, where rent, utility and insurance payment history can count as non-traditional credit.

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