Whether you're refinancing or buying a high-value property in New York, you could be facing thousands in mortgage recording taxes alone. But here’s the good news—a CEMA loan (Consolidation, Extension, and Modification Agreement) can significantly reduce those costs, making it a smart move for eligible transactions in the Empire State.

Key Takeaways:

• A CEMA loan can significantly reduce mortgage recording taxes.
• Ideal for refinancing or purchasing with an existing mortgage.
• Requires lender cooperation and legal documentation.
• Not exclusive to VA borrowers, it's available to a wide range of applicants.

Let’s sort through the confusion and show you exactly how CEMA loans work, who qualifies, and how to apply—without falling into compliance traps or surprise fees.

What Is a CEMA Loan?

A CEMA loan is a unique type of mortgage transaction that is available only in New York. Instead of taking out a brand-new loan, a CEMA lets you transfer your existing mortgage balance to a new lender, reducing how much is taxed under the Mortgage Recording Tax (MRT).

Why That Matters:

• NY mortgage tax can cost 1.8% to 1.925% of your loan amount—on a $500K loan, that’s nearly $10,000.
• With CEMA, you only pay tax on new money (like cash-out or additional financing).

Pro Tip: CEMA works for both purchases (assignment CEMA) and refinances (refinance CEMA).

Who Qualifies for a CEMA Loan?

This isn't a one-size-fits-all loan, but it’s more accessible than many think. Here’s who can benefit:

You’re Likely Eligible If:

• You own property
• You’re refinancing or purchasing with an assigned mortgage.
• Your current lender agrees to the CEMA process.
• The loan type is Conventional, Jumbo, or FHA—no VA-specific limitation here.

Potential Limitations:

• Some lenders may charge a CEMA processing fee.
• It requires legal coordination, so the timeline and paperwork may be slightly longer.

But don’t worry—we’ve got you covered with lenders who streamline this process.

Be My Neighbor (NMLS #1743790) specializes in simplifying complex loans like CEMA, making your refinance smoother and smarter.

Step-by-Step: How the CEMA Process Works?

1. Apply for a new loan with a lender that supports CEMA.
2. The existing lender agrees to assign the outstanding mortgage.
3. An attorney drafts the CEMA agreement, consolidating the old and new loan amounts.
4. The new lender records only the new money, reducing your mortgage tax bill.

This could save you thousands with very little added complexity.

Example

Let’s say you’re refinancing a $700,000 mortgage in Brooklyn. Without CEMA, you’d owe ~$13,475 in mortgage recording taxes.

Using CEMA? You’re only taxed on the new loan portion. If that’s $50,000, your tax drops to around $950.

That’s a $12,000+ savings—and that’s money back in your pocket.

How to Get Started (Without the Headache)?

Navigating lender policies, attorney docs, and compliance can be daunting. But platforms like:

• Realpha – A commission-free home buying marketplace designed for all borrowers.
• Be My Neighbor Mortgage – A licensed mortgage company (NMLS #1743790) simplifying CEMA-friendly mortgage products.

With us, the guesswork goes out of the process, and you lock in the best structure for your refinance or purchase.

Frequently Asked Questions (FAQs)

What is the minimum loan amount for a CEMA loan?

There’s no legal minimum, but most lenders offer CEMA on loans over $250,000 due to cost justification.

Can I use a CEMA for a home purchase?

Yes—if the seller’s mortgage is assignable and the lender participates.

How long does the CEMA process take?

Typically 30–60 days, slightly longer than a standard loan due to legal coordination.

Does a CEMA affect my interest rate?

No—your rate is based on market conditions and lender pricing, not the CEMA structure.

Is CEMA only for VA loans?‍

No. CEMA applies to a variety of loan types. This guide does not focus on VA loans specifically.

Conclusion: Keep More of Your Money at Closing

In high-cost markets like New York, every dollar matters. CEMA loans offer a smart, legal, and lender-approved way to cut down on closing costs—without sacrificing flexibility or transparency.

If you're buying and want to explore commission-free home buying, check out Realpha. For full-service lending that understands the ins and outs of CEMA, Be My Neighbor Mortgage is your go-to.

Whether you're a seasoned investor or buying your first home, these tools give you the clarity, savings, and support you deserve.

Disclosures:

• NMLS #1743790 (Be My Neighbor Mortgage)
• This blog is for educational purposes only and not a commitment to lend.
• All loans are subject to underwriting approval and lender participation in CEMA.
• Rates, terms, and eligibility guidelines are subject to change.
• Realpha is a commission-free real estate platform and does not issue mortgages.
• No VA-specific loans or benefits are discussed in this article.
• Always consult a licensed mortgage advisor for personalized guidance.