Background
The Agency is a corporate governmental Agency, constituting a public benefit corporation and a component unit of the State of New York (the "State"). The Agency and its corporate existence shall continue until terminated by law; provided, however, that n• such law shall take effect s• long as the Agency has bonds, notes or other obligations outstanding.
The Agency has tw• primary lines of operations: Single Family Operations and Mortgage Insurance Fund Operations.
Single Family Operations are dedicated t• providing affordable mortgage financing t• New York State home purchasers with low and moderate incomes. The Agency provides such financing through a network of participating lenders for the purchase of newly constructed and existing homes; homes in need of renovation; permanently affixed manufactured homes and financing for cooperatives and condominiums.
Mortgage Insurance Fund (the "MIF") Operations are dedicated t• providing mortgage insurance for multi‐ family affordable residential projects and special care facilities, as well as providing pool and primary mortgage insurance on single family mortgages purchased by the Agency.
The Student Loan Program was established in order t• offer education loans t• eligible students attending colleges and universities in the State. The program has been on hiatus since fiscal 2012. There have not been any Student Loan purchases since May 1, 2012.
In 2016, legislation was adopted at the State level t• authorize the creation of a program t• assist homeowners affected by the national mortgage crisis wh• are either delinquent on their mortgage payments or in danger of going int• default. The legislation created the New York State Community Restoration Fund as a new fund t• be held by SONYMA and t• be managed by a newly created subsidiary of SONYMA called the SONYMA Community Restoration Fund ("CRF"). Monies in this fund are not t• be commingled with any other monies of SONYMA. The Agency currently owns 570 defaulted mortgage loans as a partner in a joint venture with New Jersey Community Capital (NJCC‐NYS Community Restoration Fund, L.L.C.), a nationally recognized nonprofit specializing in assisting troubled homeowners. The Agency has received $22.4 million t• date and has invested $10.5 million int• the partnership. In addition, the Agency invested $1.3 million int• a partnership with a nonprofit organization, the Center for New York City Neighborhoods, through its wholly owned subsidiary and CDFI, Sustainable Neighborhoods LLC, t• establish a pilot program aimed t• assist homeowners at risk of foreclosure by offering them a refinanced mortgage at affordable terms.
Single Family Operations Highlights General
Fiscal 2020 saw continued uncertainty in the housing market coupled with the lingering impact of the Federal Reserve's post‐Financial Crisis monetary policy impacting SONYMA's ability t• maintain its traditional interest rate advantage. Fiscal 2020 als• saw the global outbreak of COVID‐19, a respiratory disease declared t• be a pandemic (the "Pandemic") by the World Health Organization, which is affecting the capital markets and which t• an unknown extent may negatively impact the New York State's housing market and its overall economy.
Despite continued aggressive efforts t• reduce the Agency's cost of funds and offer the most competitively priced mortgages on the market in the State, SONYMA's loan production decreased slightly from the high levels seen in fiscal year 2018 and 2019. During fiscal year 2020, SONYMA assisted 1,322 low and moderate‐ income households (compared t• 1,597 households in fiscal 2019 and 1,667 households in fiscal 2018) by purchasing $289.5 million in mortgage loans (compared t• $331.9 million in fiscal 2019 and $339.4 million in fiscal 2018). In fiscal year 2020, the Agency funded 12.77% less in mortgage loans than during fiscal 2019, and 2.20%lessthaninfiscalyear2018. ThemajorityofthebondfinancedloanswerepurchasedunderSONYMA's tw• primary programs ‐ Low Interest Rate and Achieving the Dream.
During fiscal 2020 , the Low Interest Rate Program provided financing t• 366 households (compared t• 292 households in fiscal 2019 and 457 in fiscal 2018 ), and the Achieving the Dream Program, which assists lower‐income homebuyers (80% of area median income or less), provided financing for 934 households (compared t• 1,130 households in fiscal 2019 and 1,093 in fiscal 2018). The continuing success of the Achieving the Dream Program, which continues t• outperform the Low Interest Rate Program in terms of production, continues t• signal the success of the Agency, even in a period of market volatility, in assisting borrowers wh• would otherwise find it difficult t• attain homeownership. Of the loans purchased under all of the Agency's programs, 888 borrowers (67.17 %) received down payment assistance totaling $6.6 million in fiscal year 2020, compared t• 934 borrowers, totaling $6.9 million in fiscal 2019 and 898 borrowers, totaling $20.3 million in fiscal 2018.
SONYMA continues t• provide financing t• underserved populations and communities. In fiscal year 2020, 930 loans were made t• low‐income households and 454 loans were made t• minorities, compared t• 1,181 and 537 respectively in fiscal 2019 as well as 811 and 561 respectively in fiscal 2018. In addition, 171 loans were made t• households buying in Federally designated target areas, up from 169 in fiscal 2019 and 203 the prior year.
During fiscal 2020, SONYMA continued t• better serve its borrowers and industry partners by:
• Focusing its efforts on Low‐Income and Minority Homebuyers: The Agency directed its energies towards providing mortgage loans t• those individuals and families for whom SONYMA mortgages make the difference in achieving sustainable homeownership. This was accomplished by continuing t• target mortgage financing activities on the Achieving the Dream Program, which assists lower‐ income homebuyers. In fiscal year 2020, 934 of the Agency's mortgages were originated under this program, keeping close pace with 1,130 in 2019 and 1,093 in 2018.
• Continuing t• promote and expand the reach of the Conventional Plus Program in fiscal 2020: Conventional Plus was launched in November 2012 and complements SONYMA's existing tax‐ exempt bond financed programs and the FHA Plus Program described below. The product takes advantage of certain pricing and underwriting benefits afforded t• SONYMA by Fannie Mae. The features of Conventional Plus are as follows:
• Lower mortgage insurance coverage requirements than standard loans;
• The availability of mortgage insurance provided by Genworth Mortgage Insurance (or
SONYMA's MIF, in the event that Genworth is unwilling t• insure the loan); and
• Down payment and/or closing cost assistance up t• 3% of the home purchase price (SONYMA allows its Down Payment Assistance Loan t• be used t• pay a one‐time upfront mortgage insurance premium, thus eliminating the monthly mortgage insurance premium and
significantly lowering the monthly payment).
The product is available for home purchases and for limited cash‐out refinances.
Under Conventional Plus, 33 mortgages of $3.94 million in total principal and $13.4 thousand in Down Payment Assistance were originated in fiscal year 2020. In addition, as of October 31, 2020, the Agency had 29 mortgages of $3.1 million in total principal and $35.9 thousand in Down Payment Assistance in its pipeline.
• Continuing t• promote and expand the footprint of the FHA Plus Program SONYMA launched in December 2013. Complementing SONYMA's existing tax‐exempt bond financed programs and the Conventional Plus Program, FHA Plus takes advantage of a special exemption from HUD that enables state housing finance agencies t• offer down payment assistance on FHA‐insured mortgages, where the down payment assistance may be used towards the borrower's minimum cash investment. The benefits of FHA Plus are:
• Eligible borrowers d• not have t• be first‐time homebuyers; • N• income or purchase price limits; and
• Availability of SONYMA down payment assistance:
• for purchase transactions, up t• 3% of the home purchase price.
• for refinance transactions, up t• 3% of the lower of the unpaid principal balance or the
appraised value. (The assistance may be used as a credit against closing costs and be prepaid.)
Under this program, 172 mortgages of $32.76 million in total principal and $1.0 million in Down Payment Assistance were originated in fiscal year 2020. In addition, as of October 31, 2020, the Agency had 177 mortgages of $42.7 million in total principal and $1.27 million in Down Payment Assistance in its pipeline.
• The Agency has continued t• enhance the SONYMA Express® automated system that was developed t• assist participating lenders by providing expedited decisions on SONYMA loan eligibility. The system has: (a) streamlined the Agency's loan origination process and dramatically reduced the time it takes participating lenders t• originate SONYMA loans; (b) eliminated uncertainty of a borrower's eligibility early in the mortgage application process; (c) lowered overall lender costs; and (d) provided lenders with the capacity t• submit electronic loan files t• the Agency, thus eliminating the need t• submit paper files. Continued efforts t• improve user experience through SONYMA Express®, resulted in all but 2 lenders opting t• use the system in 2020. It is anticipated that approximately 95% of the SONYMA volume will come through SONYMA Express® in fiscal year 2021 as a result.
• Continuing t• work with SONYMA's Advisory Council in gathering insights and recommendations on future direction from expert industry professionals. The Council helps SONYMA maximize its effectiveness while simultaneously providing a forum for knowledge‐sharing and relationship building among different members of SONYMA's distribution and supply‐networks. Due t• the pandemic, the on‐site Advisory Council meetings were canceled, but monthly subcommittee meetings have continued virtually.
• Continuing Outreach Efforts t• Industry Partners by participating in over 80 events across the state with homeownership counseling organizations, realtors, lenders, not‐for profits, veterans groups, community groups and others in both 2019 and 2020. All events after March 1 were attended virtually. The outreach efforts and collaboration in planning events have deepened the Agency's relationships with its partners in the housing community and provided additional opportunities t• promote SONYMA products and services.
• Growing the Neighborhood Revitalization Program (NRP). In June 2016, SONYMA announced a program that leverages $22 million in settlement dollars t• aid in the purchase and renovation of vacant/abandoned homes in neighborhoods hard hit by the foreclosure crisis. The program was originally launched in Kingston, Middletown, Troy, Rochester, certain parts of New York City and all of Long Island due t• their high level of impact from the foreclosure crisis; subsequently, the program was expanded int• all of Orange County, Rensselaer County, Schenectady County, Staten Island, the Bronx and Buffalo. In 2019, SONYMA added Broome, Clinton, Dutchess, Essex, Montgomery, Niagara, Oneida, Onondaga, Sullivan, Ulster, Warren and Washington Counties. SONYMA collaborated with various divisions of HCR, nonprofits based in the communities selected for this pilot program, local government, realtors and SONYMA participating lenders. NRP enables borrowers t• purchase a vacant home and receive down payment assistance, a subsidized interest rate, and $20,000 toward property repairs with the ability t• finance any additional necessary repairs int• the loan. In fiscal 2020, SONYMA funded 338 NRP properties investing over $84.6 million in the effort.
• Expanding the SONYMA Spruce up Initiative. SONYMA Spruce Up is an event in which SONYMA, local nonprofit partners, lenders, sponsors, contractors and neighborhood associations partner t• d• a one‐day exterior clean‐up of a targeted area. SONYMA held its first event in the Sheridan Hollow neighborhood in Albany with the assistance of the Affordable Housing Partnership and the Sheridan Hollow Neighborhood Association in 2016. This pilot was continued with another four events in 2017 throughout New York State; four events in 2018 (Rochester, Queens, Walden, and Central Islip); and four events in 2019 (Niagara Falls, Bay Shore, Monticell• and Queens). Volunteers completed exterior repairs, such as repair/painting of stoops, planting trees, and cleaning up sidewalks on over 250 homes, completed a total renovation of seven local parks, eleven vacant homes, five vacant lots as well as the clean‐up and painting of a playground, and an outdoor classroom. Local lenders, community volunteers, school civics clubs, several local nonprofits, realtors and SONYMA's MI partners both sponsored and contributed volunteers t• complete the work. There was radi• and media coverage across all the local networks. All 2020 Spruce Up events were postponed t• 2021 due t• public health concerns related t• the pandemic.
• The CRF currently owns 570 delinquent notes. This fund was intended t• be a vehicle through which SONYMA can purchase delinquent notes from various sources in order t• help borrowers modify their loans and remain in their homes.