NJHMFA Down Payment Assistance Program

The New Jersey Housing and Mortgage Finance Agency's (NJHMFA) Down Payment Assistance Program is a state-wide initiative that makes the mortgage process more affordable for first-time homebuyers. The program’s purpose is to make funds available for eligible applicants who are interested in purchasing a home but need financial help to pay the upfront costs associated with a mortgage transaction.

Available Assistance:
Under the NJHMFA Down Payment Assistance Program, qualified borrowers can receive up to $10,000 in assistance funds.  The assistance funds can be put toward the closing costs or down payment, and they come in the form of a zero-interest, second mortgage with no monthly payments. It is a five-year, forgivable loan, which means that as long as the borrower resides in the home for five years, the loan is forgiven completely.

Eligibility requirements:
In order to be eligible for the NJHMFA Down Payment Assistance Program, all applicants must meet certain requirements. They must be first-time homebuyers (someone who has not owned a home in the previous three years), financing their home with an NJHMFA primary mortgage originated through a participating lender. All borrowers must have a FICO score of at least 620, and not have enough liquid assets to close a mortgage at 80% LTV or less. Income limits are determined by household size, location of the home, and funding source of the primary mortgage, but it must never exceed 140% of the area median income.

Property Guidelines:
Any home purchased under the NJHMFA Down Payment Assistance Program must be located in New Jersey and serve as the borrower's primary residence. The property must be a single-family home, condominium, townhome, manufactured, or mobile home, which is permanently affixed
to real property owned by the Borrower; two-to four-family dwellings are eligible only if one unit is occupied by the borrower as a primary residence. All properties must fall under the statewide purchase price limits, based on family size and location, and meet any other guidelines under the NJHMFA’s first mortgage loan.

*Seller-funded down payment programs were eliminated in the Housing and Economic Recovery Act of 2008, but state and local government agencies are still permitted to help borrowers finance their homes with second mortgages and grants. These agencies set different requirements that a borrower needs to meet in order to qualify for the grant programs, such as property location, and purchase price, and income limits.