The Construction Incentive Program has been specifically created in an effort to stimulate new construction of one- and two-family homes. The program features 100% financing, a special two-step interest rate, and a longer rate lock period. The program is financed by SONYMA through the sale of tax-exempt bonds.

The requirements of the 2002 Construction Incentive Program are the same as those of the Low Interest Rate Program, with the following exceptions:

• Two-step interest rate. The initial rate is fixed for the first 48 payments, then increases 2% and fixed for the remainder of the loan term;
• Borrowers will be qualified at the lower initial rate;
• Financing of up to 100% of the value of the property for qualified borrowers;
• Borrower points are 1.75% (1% will be collected at application and the remainder at loan closing);
• Interest rate is established at loan application and remains in effect for 240 days.

Eligible Properties are restricted to: 1) Newly constructed one-family homes including condominiums, cooperatives, and manufactured housing permanently attached to real property; 2) Newly constructed two-family homes that are located in a target area.

Borrower's cash contribution to the transaction must be a minimum of 3% of the value of the property. For borrowers requesting 100% financing, the 3% must be applied to closing costs. Loan terms are limited to 30 years only.

Funding Category:	Low interest loans for the construction of one-and two-family homes.
Target Population:	Low and moderate-income households
Funding Available:	This program offers 100% financing, a two-step interest rate and a longer rate lock feature.
Application Information:	SONYMA How Do I Apply?
Contact:	For Information on SONYMA'S Mortgage Programs: 1-800-382-HOME (4663)
Links to More Info:	SONYMA Website SONYMA Homeownership Programs Construction Incentive Program Description Target Areas Listing: Municipalities Completely Designated as Targeted; Target Areas by County and Municipality; Target Areas by County and Census Tract.
Administering Agency:	State of New York Mortgage Agency (SONYMA)