Down Payment Assistance Programs for First-Time Homebuyers in New Jersey

Even though New Jersey happens to be the 4^th-smallest state in America, the “Garden State” holds the title of the 11^th-most popular state in the country. Regardless of its small size, NJ has ample attractions & experiences for visitors. From the iconic Jersey Shore and boardwalks to historic lighthouses and casinos – this state welcomes tourists from all over America who come to bathe in NJ’s limelight.

Aside from beaches and saltwater taffy, Jersey remains the East Coast’s answer to Las Vegas. The parks and natural areas of NJ also make it a state of visit… and probably even made home. However, NJ faces a housing crisis right now. Given the rising costs of construction along with gentrification and urban parts of the state becoming expensive for low-income residents, NJ has become the top state in terms of out-of-state movers. Given the always-rising costs of homes, first-time homebuyers have a hard time buying a place of their own in NJ. But down payment assistance programs might come to their rescue.

Looking for Assistance in a Specific Part of New Jersey?

This page provides an overview of the assistance programs available to first-time homebuyers in New Jersey. It also covers statewide & local resources. For specific information on down payment assistance in your area, refer to the local resource provided here:

 [GW1]

Down Payment Assistance in New Jersey

In May 20204, $494,000 was the median home price in New Jersey. These numbers will keep increasing – making it difficult for low-to-moderate-income earners to become homeowners – until down payment financial assistance programs do something about it.

However, you can leverage numerous down payment assistance programs to own a home in New Jersey. Stairs Financial offers insights into some of these affordable housing programs. Locals can use this info to choose the ideal financial assistance option.

NJHMFA Down Payment Assistance Program

The first option comes with the NJHMFA Down Payment Assistance Program, a source of funds that can make it easier for low-to-moderate-income earners to own a house. It is structured like a five-year loan without any interest or monthly payment.

Fundamentals

• Assistance type: Forgivable second loan
• Sponsor: New Jersey Housing and Mortgage Finance Agency (NJHMFA)
• Assistance amount: $15,000

Eligibility requirements

• Borrowers must have been first-time homebuyers in the past 3 years.
• The buyer has to maintain a minimum credit score of 620.
• This home needs to be the buyer’s primary residence.

NJHMFA First Generation Down Payment Assistance Program

As per the NJHMFA First Generation Down Payment Assistance Program, you can get $7,000 more along with the previous program. Combined with the previous down payment assistance program, your funds reach a total of $22,000. This program helps NJ residents whose parents or guardians don’t own a house right now so these residents can become the “first generation” to own one.

Fundamentals

• Assistance type: Forgivable second loan
• Sponsor: New Jersey Housing and Mortgage Finance Agency (NJHMFA)
• Assistance amount: $7,000

Eligibility requirements

• All the three eligibility requirements as stated above
• The borrower’s parents or legal guardians must not have ownership interests in any residential real property either in the US or abroad (making them first-generation homebuyers).

HFA Advantage Loan

Another product that comes from a different sponsor is the HFA Advantage Loan, a generous source to help you afford 97% of the cost of purchasing a home. Freddie Mac has been in the mortgage market for a long time. The founders aim to make it easier for NJ’s low-income earners to have a place of their own to call home.

Fundamentals

• Assistance type: Conventional mortgage loan
• Sponsor: Federal Home Loan Mortgage Corporation (FHLMC)
• Assistance amount: 97% Financing

Eligibility requirements

• The borrower must have a credit score of 620.
• At least one member of the borrower’s family should make this house their primary residence.
• The buyer is required to sit in homebuyer education classes.
• These funds cover one-to-four-unit primary residences, condos, planned unit developments, and manufactured homes.

NJCC Statewide Down Payment Assistance Program

If you’re looking for a forgivable grant of up to $30,000, the NJCC Statewide Down Payment Assistance Program is the answer. In 2024 alone, NJCC provided $2.14 million in down payment assistance to locals. New applications are open from October 4, 2024, for the next year.

Fundamentals

• Assistance type: Grants
• Sponsor: New Jersey Community Capital (NJCC)
• Assistance amount: $30,000

Eligibility requirements

• The grant receiver isn’t a homeowner.
• The grant receiver intends to keep the house as their primary residence.

New Jersey Down Payment Assistance Program FAQs

Here are some questions from first-time homebuyers in New Jersey looking for financial assistance with down payments:

1.  Are there income limits for the down payment assistance program?

Income limits apply when New Jersey residents apply for down payment assistance programs. They usually have to show an income that doesn’t exceed 100% of HUD’s AMI. That’s when they qualify for financial assistance, such as NJHMFA.

2.  What happens when you don’t have enough money for a down payment?

Prospective homebuyers in NJ explore down payment mortgage options to make down payments. These options come in the form of VA, FHA, or USDA loans. So, homebuyers should consider taking advantage of Stairs Financial’s thorough resources on New Jersey’s first-time homebuyer assistance programs to understand the eligibility criteria and select the most suitable option.

3.  Can you use gift money to afford a down payment in New Jersey?

Some first-time homebuyers use family gifts to make down payments on their newly bought dwellings. A family gift or other contributions from generous family members will work as long as the donor supplies a letter confirming that these funds are a gift, not a long one.

Disclaimer: This article is for informational purposes only and should not be considered as legal or financial advice. Please consult an attorney, mortgage lender, or CPA for guidance on your specific situation.