2021 New Jersey first-time homebuyer assistance programs

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Shopping for your first home is a thrill, but if you’re looking to buy in New Jersey, the cost of real estate can take your breath away. Home prices in Garden State towns like Princeton, Montclair and Westfield are on an upward trend, as many buyers flock to the area and away from denser urban centers.

Whether you’re a first-time or repeat homebuyer, you can get assistance through the New Jersey Housing and Mortgage Finance Agency, which partners with approved mortgage lenders to offer competitive loans and down payment assistance. Here is 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 New Jersey can get competitive terms on a 30-year, fixed-rate mortgage backed by the government, which can be combined with the agency’s down payment assistance. To qualify, borrowers must meet these requirements:

  • You’re a first-time homebuyer or haven’t owned a home in the past three years.
  • The home must be your primary residence and located in New Jersey.
  • You must meet credit score and debt-to-income ratio requirements.
  • You must 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.

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 $548,250. 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-time buyers. 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

If you’re a first-time homebuyer in need of down payment funds, NJHMFA’s Down Payment Assistance (DPA) program can provide you with $10,000 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.

Currently, some mortgage lenders might not be participating in the down payment assistance program due to the pandemic, according to NJHMFA, so you might need to consult with a few approved lenders to find one offering the program at this time.

Other first-time homebuyer loan programs

In addition to the NJHMFA programs, check your eligibility for the many national programs and grants available to first-time homebuyers. Government-backed FHA, VA and USDA loans can offer favorable terms and flexible underwriting that can help you meet the credit or down payment requirements for a mortgage sooner. For first-time buyers working in certain public service roles, the Good Neighbor Next Door program can be another option.

For other New Jersey homeownership programs, including by city or county, visit HUD.gov.

Get started

As you consider what loan programs or assistance you might qualify for, be sure to research the latest New Jersey mortgage rates and compare loan options from a variety of mortgage lenders. When you’re ready to buy a home, you can connect with an NJHMFA participating lender near you through the agency’s website.

Nearby states first-time homebuyer programs

Learn more:

Written by
Jeanne Lee
Contributing writer
Jeanne Lee writes about mortgages, personal finance and enjoys finding ways for people to hack their finances.
Edited by
Mortgage editor
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