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New Jersey first-time homebuyer assistance programs

Jeff Ostrowski Suzanne De Vita
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Jeff Ostrowski,
Edited by
Suzanne De Vita
Published on January 30, 2024 | 4 min read

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Cape May, New Jersey
Joice Brinkerhoff / EyeEM/Getty Images

Whether you’re a first-time homebuyer or a repeat buyer in New Jersey, you might qualify for one or more affordable mortgage programs through the New Jersey Housing and Mortgage Finance Agency. The organization partners with approved mortgage lenders to offer competitive loans and down payment assistance. Here’s a look at the agency’s housing programs.

New Jersey first-time homebuyer loan programs

NJHMFA First-Time Homebuyer Mortgage

Through the New Jersey Housing and Mortgage Finance Agency (NJHMFA), first-time homebuyers in the state can get competitive terms on a 30-year, fixed-rate FHA, VA or USDA loan, which can be combined with the agency’s down payment assistance (more on that below. To qualify, you must:

  • Be a first-time homebuyer or haven’t owned a home in the past three years
  • Buy a home in New Jersey and use it as your primary residence
  • Meet credit score and debt-to-income (DTI) ratio requirements.
  • Meet NJHMFA income and purchase price limits

NJHMFA sets income and purchase price limits based on the number of people in your household and the location of the home. Price limits are higher for houses in certain urban areas the agency considers “target areas.” In these areas, you could be eligible for the program without being a first-time homebuyer, but you must not be the current owner of another primary residence.

HFA Advantage loans

NJHMFA also offers Freddie Mac HFA Advantage loans for up to 97 percent financing. This loan can be paired with NJHMFA down payment assistance.

NJHMFA Police and Firemen’s Retirement System Mortgage

NJHMFA also assists those who serve residents of the state when it comes time to buy a home. If you’re a New Jersey police officer or firefighter and a member of the Police and Firemen’s Retirement System — and have at least one year of service — you could be eligible for a competitive 30-year fixed-rate loan up to $766,550. The financing can be used to purchase a one- or two-family home or condo, or land to build a home on as long as the home will be your primary residence.

You don’t need to be a first-time homebuyer to be eligible for this program, but a portion of the funding for it is reserved for first-timers. There are some fees associated with the program, including a $1,500 lender fee and a $325 administrative fee, as well as typical closing costs. You’ll also be required to pay mortgage insurance if your down payment is less than 20 percent.

New Jersey down payment assistance

Down Payment Assistance Program

If you’re a first-time homebuyer in need of down payment funds, NJHMFA’s Down Payment Assistance Program can provide you with $15,000 to use toward a down payment or closing costs. The funds come in the form of a five-year, forgivable second mortgage. There’s no interest charged on the loan, and you won’t have to make a monthly payment. The eligibility requirements include:

  • The first mortgage must be an NJHMFA loan.
  • You must be purchasing a primary residence in New Jersey.
  • You must not have owned a home in the past three years.

First Generation Down Payment Assistance Program

Another five-year, forgivable second mortgage administered by NJHMFA, the First Generation Down Payment Assistance Program offers up to $7,000 to first-generation, first-time homebuyers. This can be paired with the regular Down Payment Assistance Program for up to $22,000 in assistance.

Other first-time homebuyer loan programs

While you’re considering first-time buyer programs in New Jersey, be sure to explore nationally available first-time buyer loan programs like:

  • FHA loans – If you have a lower credit score or limited savings, consider an FHA loan. These loans are widely available, have a minimum credit score of 580 and require a down payment as little as 3.5 percent.
  • VA loans – If you’re a member of the military or veteran, you could qualify for a VA loan, which doesn’t require a down payment.
  • USDA loans – USDA loans don’t have a down payment requirement, but are only available to borrowers buying in a USDA-eligible rural area. You typically need a credit score of 640 or higher to qualify.
  • Good Neighbor Next Door program – This HUD program has a very low down payment requirement on homes in certain areas, coupled with the ability to save 50 percent on the purchase price.

Get started

As you prepare to become a first-time homebuyer, here are some next steps:

  • Do your homework. When you’re ready to buy a home, you can connect with an NJHMFA participating lender near you through the agency’s website.
  • Work on your credit score. It’s the most important factor in determining your mortgage rate, so focus on boosting your number.
  • Compare lenders. As you consider what loan programs or assistance you might qualify for, research the latest New Jersey mortgage rates and compare loan options from a variety of mortgage lenders.
Written by
Jeff Ostrowski Arrow Right Icon
Principal writer, Home lending
Jeff Ostrowski covers mortgages and the housing market. Before joining Bankrate in 2020, he spent more than 20 years writing about real estate, business, the economy and politics.