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2022 New Jersey First-Time Homebuyer Programs

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New Jersey’s first-time homebuyer programs provide new homeowners access to low-interest loans and down payment assistance. To qualify, homebuyers must meet each program’s income guidelines and additional requirements. This article provides an overview of first-time homebuyer programs in New Jersey.

New Jersey statewide and local first-time homebuyer programs

The New Jersey Housing and Mortgage Finance Agency (NJHMFA) offers statewide homebuyer programs. Additionally, regional housing agencies, local governments and community organizations may provide programs on the county or city levels. Here’s a glance at some first-time homebuyer programs available in all New Jersey counties.

Program nameAssistance amountAssistance typeWhere it’s available
HFA Advantage Mortgage Program Loan amounts vary based on borrower’s eligibilityLow-interest fixed-rate 30-year mortgagesStatewide
First-Time Homebuyer Mortgage ProgramPurchase price up to $1,692,475, depending on county and family sizeLow-interest fixed-rate mortgagesStatewide
Down Payment Assistance Program$10,000 for down payment and closing costsForgivable second mortgageStatewide
Police and Firemen’s Retirement System Mortgage ProgramLoans up to $647,200Low-interest fixed-rate mortgagesStatewide

What to know about different types of down payment assistance

Down payment assistance (DPA) can come in many forms, so buyers should understand how programs work before applying.

Second Mortgage: The NJHMFA DPA program is a forgivable second mortgage. Borrowers take on a zero-interest no-payment loan which is forgivable if they stay in the home for five years. Selling or refinancing before then means they will have to repay a portion of the loan. Some local programs may offer down payment assistance as second mortgages with deferred payments or traditional payments.

Grants. Some community programs may offer down payment assistance grants. Buyers do not need to repay grants; however, grant programs are subject to the availability of funds.

How New Jersey first-time homebuyer programs work

The process to apply for first-time homebuyer programs in New Jersey will vary based on the initiative. To apply for one of NJHMFA’s programs, buyers will take the following steps.

1. Review program details.Familiarize yourself with the various programs available. Be sure to learn the income limits, borrower requirements and any program fees. NJHMFA provides an online guide to homeownership on its website for general information. In addition to statewide programs, you may qualify for regional or local New Jersey first-time homebuyer programs.

2. Choose a local lender.To apply for a program, you’ll work with a participating lender. To find one near you, you’ll need to complete a brief online form and NJHMFA will connect you with a few lenders in your area. Compare the lenders’ programs, fees and requirements before selecting one.

3. Prequalify for a loan.Your lender will request your credit and financial information to prequalify you for a loan.

4. Attend housing counseling.Some NJHMFA programs require borrowers to attend housing counseling through a HUD-approved agency.

5. Be aware of program guidelines. Make sure you understand any program requirements you’ll need to stick to after you close on the home loan, such as remaining in the home for a set time.

New Jersey first-time homebuyer program requirements

Each homebuyer program has income and credit guidelines based on minimum mortgage requirements. Additionally, borrowers may also have to meet agency and lender qualifications.

Program name Credit score minimumDTI ratio maximumMaximum income limitHow long you have to live in home
HFA Advantage Mortgage Program 62050%$53,920 to $85,540N/A
First-Time Homebuyer Mortgage ProgramVaries based on loan type47%$106,000 to $172,480, depending on county and family sizeN/A (Nine years to avoid potential recapture tax)
Down Payment Assistance Program620As first mortgage requirementsAs first mortgage requirementsFive years
Police and Firemen’s Retirement System Mortgage ProgramAs per lender requirementsAs per lender requirementsN/AN/A


Some loan and down payment assistance programs have income limits to target borrowers who need the most assistance. The U.S. Department of Housing and Urban Development (HUD) establishes these income limits and bases them on family size and the median income of the area you’re buying in. You can look up the income limits for your county to get an idea of what programs you’ll qualify for.

National first-time homebuyer programs

In addition to state first-time homebuyer initiatives, borrowers can access national loan programs. While not limited to first-time homebuyers, many national mortgage programs have favorable terms, including low minimum down payments and flexible credit requirements. Some of NJHMFA’s programs pair down payment assistance with a nationally available mortgage.

Conventional loans. Credit and down payment requirements are typically stricter for conventional (non-government) loans. However, a few conventional loan programs have lenient qualifications. Fannie Mae’s HomeReady® and Freddie Mac’s Home Possible® are available to low- and moderate-income borrowers and have a minimum down payment of 3%. HomeOne, a Freddie Mac program, also has a 3% minimum downpayment and is open to all first-time homebuyers, including borrowers who haven’t owned a home in three years. HomeOne does not have income restrictions.

FHA loans. Guaranteed by the Federal Housing Administration, FHA loans are popular among first-time buyers because of their low minimum down payment and lenient credit requirements. Borrowers can qualify for an FHA loan with only 3.5% down and a minimum credit score of 580. Homebuyers with a credit score between 500 and 579 can still be eligible with a 10% down payment.

VA loans. Active-duty service members, military personnel and eligible spouses can access loans backed by the U.S. Department of Veterans Affairs. VA loans provide 100% financing with no program loan limits and flexible credit requirements.

USDA loans. Guaranteed by the U.S. Department of Agriculture, USDA loans are available to low- and moderate-income borrowers who live in designated rural areas. USDA loans do not require a down payment.

FAQs about New Jersey’s first-time homebuyer programs

Who qualifies as a first-time homebuyer in New Jersey?

Programs that require first-time home buyer status usually extend to borrowers who have not owned their primary residence in the past three years. In some cases, buyers who meet specific criteria, such as purchasing a home in a targeted area, may be exempt from any first-time buyer requirements.

Can I qualify for down payment assistance in New Jersey?

To be eligible for NJHMFA’s Down Payment Assistance Program, buyers must meet income and credit guidelines, qualify for a first mortgage through the agency and attend housing counseling. Local down payment assistance programs may have other requirements.

How much of a down payment do I need to buy a house in New Jersey?

Minimum down payments depend on the mortgage you’re applying for and any additional lender requirements. Generally, homebuyers can purchase a home with only 3% to 5% down, depending on the loan type. Borrowers eligible for VA or USDA loans can buy a home with no money down.

Even when a downpayment is required, eligible buyers can pair a loan with down payment assistance for 100% financing.

Home price trends in New Jersey’s major areas

In 2021, home prices increased in New Jersey as they did across the country. In some counties, prices jumped by double digits.

In Essex County, home prices rose by 6.4% from a year earlier to a median price of $435,464. The typical monthly payment for a 30-year fixed-rate mortgage in the county increased by about $54, to $1,652.

Camden County saw slightly higher increases at 8.8%, bringing the median home price to $233,996. The monthly payment for a typical mortgage there rose by close to $50, to $888.

In the southern part of the state, home prices saw steeper increases. The median home price in Atlantic County jumped by 13% from a year earlier to $254,256. And the typical monthly mortgage payment is $86 higher, at $965.


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