Average Down Payment for an Apartment in NYC (2024)

April 16, 2021 by Ossiana Tepfenhart

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Buying an apartment in New York City is a slice of the American dream. It’s getting the apartment life you want in one of the greatest cities in the world, whether looking in Manhattan, Brooklyn, or Queens. Saying that owning an apartment in New York City is a good investment is an understatement. It’s entirely possible that it could be the best investment in your life. You will need a down payment to get the apartment of your dreams. How much is required might surprise you. The average down payment in NYC is 20% of the purchase price. It’s possible to put down 10% or less on many condos in the city. Most co-op apartments have stricter financial requirements, which require a minimum of 20% down. Condo buildings in NYC often have minimum financing requirements as well. How much is the downpayment for a house or an apartment in NYC?

How Much Should You Put Down For A New York City Apartment?

New Yorkers love their apartments, and they love them so much; that a typical down payment might exceed what most people would put down for a house in other parts of the country. Due to the high demand for apartments you can rent, a typical down payment for an apartment purchase will be 20 percent.

Sometimes, 20 percent is not a down payment that will suffice, especially with co-ops. In this case, you may need to pay a minimum of 30 percent or more.

Since the median price for all Manhattan apartments is around $916,000, you should expect to pay an average down payment of $183,200.

Is It Possible To Pay Less Than 20 percent for an NYC Apartment downpayment?

While 20 percent down is the benchmark for most apartments, condos, and co-ops, it’s not the minimum. I

f you have FHA 203 k loans, you might be able to put down as little as 3.5 percent. However, this usually only works in communities approved for FHA loans and focuses on affordable housing for low to middle-income families.

FHA 203k loan availability

This issue is that apartments like this tend to be low in numbers. So, there is a lot of demand with very little to go around.

Some condos will also allow you to apply for a home with them for as little as 10 percent, but the chances of getting approved are slim.

Why Are Sellers Rejecting Offers With Low Down Payments?

In the past, sellers were far more amenable to selling their homes for a low down payment in NYC. However, times have changed, especially over the past two years. There are several reasons sellers might turn their noses up at low-down payments. These include:

• They get worried that the loan will fall through at the last minute.Lenders are such fickle people! While a preapproval usually leads to a loan application being pushed through, the truth is that it’s not a guarantee.

It’s not unusual to hear a lender drop the approval due to low down payments. Should this happen, the seller will have wasted their time. A higher down payment could often prevent the loan from being panned, so they’ll choose the higher down payment.

• A high down payment suggests more commitment.This is a subjective thing, but it’s still a typical assumption. A high down payment means you’re willing to go all-in on a home and do what it takes to get the bid.
• Many sellers also believe a high down payment in NYC is a good sign of your financial health. Having that money amount means you know how to budget. This alludes to a better debt-to-income ratio, which means they know you’ll be able to handle the house in a pinch.
• Some sellers also worry about your financial stability during times of upheaval.People have seen a lot of broken deals due to COVID-19 and the Great Recession. Offering a down payment often gives lenders and sellers peace of mind in knowing your job will stay intact through all the upheaval.

Can You Use A Gift As A Down Payment?

You can buy there are pros and cons. If you are lucky enough to have a wealthy uncle willing to lend you a bunch of money, you can use it as a gift for the down payment on your home. However, there’s a catch. You still need to prove that you are financially healthy aside from the giftin the form of liquidity.

Additionally, anyone who wants to use a gift from a friend or family member as a down payment on their apartment will have to get a letter stating that the money is a gift for the down payment.

So, if you want to use that cash, understand you’re not off the hook for the rest of your stuff.

Essential Tips For Coming Up With A Down payment in NYC

To buy a home, you must put together a down payment. However, it’s not just as simple as getting the money together. A little strategy goes a long way. The following tips will help give your finances the boost you need:

• Do try to put down as much as possible, but don’t forget those closing costs.Although down payments will get your foot in the door, having an emergency scramble to cover closing costs like moving or taxes can make things very rough. To make things easier, use a closing cost calendar to determine how much you should set aside.
• Consider a bridge loan.Don’t have enough money for a down payment? You might be able to get a small loan to “bridge” the gap between what your home loan price is and what your down payment should be. This generally requires you to have equity, and it’s a short-term loan meant to be paid off once your first apartment is sold.
• Ask for a lower price and use less of your down payment money when in doubt. If you get a counteroffer, you can increase the down payment to sway your lender. Otherwise, you would be out of luck.
• You might qualify for a down payment assistance grant with a meager income. New York City has several major programs that can help you out. You can find out more at the NYC HUD.

What Happens If You Can’t Afford A Large Down payment in NYC?

How much is the downpayment for an apartment or a house in NYC? If the down payment price tags in New York City scare you, you’re not alone. While it may be harder to find a willing seller, there’s still a chance that you can get the apartment that you want to own. There are two things most aspiring homeowners can do: apply for assistance or pay mortgage insurance.

It’s normal to be at a loss when you hear how much the down payments can be. Talking to your mortgage loan officer and real estate agent can help determine your next step. After all, they’re there to help!

Although there may be programs or loopholes that can technically allow you to purchase an apartment in NYC without putting around a 20% down payment, the reality is that it is almost impossible to do. While we of the Gasdaska Conlon Team typically prefer to be optimistic and encourage our readers to explore their options, we don’t feel comfortable putting any spin on this situation.If you’re not in a position to put a 20% down payment on an apartment AND have at least six months of expenses in liquid assets after the closing of the home, you aren’t in a position to safely buy a home in Manhattan. We strongly recommend working hard and saving until you can put 20% down without jeopardizing your household’s financial stability.