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new jersey first time home buyer

First Time Home Buyer NJ | How to Find First Time Home Buyer Programs New Jersey

Looking for your first home in New Jersey can be exciting, but it can also seem daunting. The cost of real estate in New Jersey might make you think twice. The good news is that as a first time home buyer, you can get assistance through the New Jersey Housing and Mortgage Finance Agency (NJHMFA). 

You may worry about how to get first time home buyer grants in New Jersey. For first time home buyer programs New Jersey partner with approved mortgage lenders to offer competitive loans, unique mortgages, and down payment assistance. They also provide educational assistance and give you the needed tools to help you make the right first time home purchase. This also offers closing cost assistance and interest-free second loans with no monthly payment. 

You might think that if you’ve owned a home before, you don’t qualify as a first time buyer. However, if you haven’t owned an interest in a primary residence within the previous three years, you are considered a first time homebuyer in New Jersey. There are certain qualifications you’ll need to know, like NJ first time home buyer income limits. 

First Time Home Buyer in New Jersey Tax Credits & Down Payment Assistance 

Wondering how to qualify for first-time home buyer grants NJ? If you’re a New Jersey first time home buyer, the NJHMFA provides a competitive 30-year fixed-rate, government-insured, low-interest loan for eligible homebuyers purchasing a home in New Jersey. To be an eligible homebuyer, you must purchase and occupy a residential home in New Jersey and be a first time homebuyer, which is defined as an individual who hasn’t owned a primary residence during the previous three years. 

If you are purchasing a home within Urban Target Areas (based on census data), or if you are a qualified veteran (those who served in active federal duty), you qualify without the need to be a first time home buyer. The one stipulation is that you can’t own another primary residence at closing. Other first time home buyer NJ requirements include you must be occupying the primary residence within 60 days of closing, and you must meet first-time home buyer NJ credit score and debt-to-income requirements.

NJHMFA Down Payment Assistance in New Jersey

The NJHMFA’s Down Payment Assistance Program (DPA) must be paired with an NJHMFA first time homebuyer mortgage loan. The DPA provides first time homebuyers with up to $15,000 toward a down payment and/or closing costs. The amount varies by county. The DPA is a forgivable loan with no interest and no monthly payments. A forgivable loan means if the home is your principal residence, and you reside in it continuously for five years, the loan is forgiven. 

So, the loan essentially becomes a NJ first time home buyer grant after five years! With this program, you might also qualify for a 0% deferred payment loan up to $10,000, which will be applied first to closing costs and the balance to down-payment assistance.

HFA Advantage Mortgage Program

The HFA Advantage Mortgage Program in New Jersey offers first time home buyer programs New Jersey homebuyers a 30-year fixed-rate HFA loan with up to $15,000 in down payment assistance. To qualify, you’ll need to purchase a single-family home, condominium, or planned unit development (PUD). A FICO score of at least 640 is also required, as well as meeting the income limits established by Freddie Mac. 

Homeward Bound Program

New Jersey also offers first time homebuyers the Homeward Bound program, with up to $15,000 of first time home buyer NJ down payment assistance, flexible underwriting guidelines, and a government-backed loan. 

Mortgage Credit Certificate

Another option for first time buyers is to apply for a mortgage credit certificate (MCC), which is issued to first time homebuyers by the New Jersey state or local government. This credit certificate allows you to claim a federal mortgage interest tax credit for the mortgage interest paid up to $2,000. A first time home buyer NJ tax credit mortgage certificate lets you recoup some of that interest you paid as a federal tax credit, reducing how much you owe in federal taxes for the year, lowering your housing costs, and saving you money. 

This program is most beneficial if you owe a substantial amount of federal income tax for the year. Typically, only low or middle-income first time buyers qualify for a mortgage credit certificate. 

First Time Home Buyer Loans in New Jersey

If you’re not looking for first time home buyer NJ grants, there are several first time homebuyer mortgages available in New Jersey. If you have a 20% down payment and are a first time home buyer in New Jersey, you qualify for a conventional loan with a competitive first time home buyer NJ interest rate and no private mortgage insurance (PMI). 

However, many first time buyers don’t have enough money to put 20% down. If you wanted to purchase a $400,000 home, you’d need to put $80,000 down! Thankfully, as a first time buyer, you don’t need that much. You can purchase your first home with as little as 3% or even 0% down. Here are the most common types of loans you can get in New Jersey:

These loans are from Freddie Mac or Fannie Mae. All you need is a 3% down payment and a 620 minimum credit score. You typically can stop paying PMI after a few years.

These loans are backed by the Federal Housing Administration. You’ll need to put 3.5% down and have a 580 minimum credit score. However, with an FHA loan, your PMI won’t go away unless you refinance later to a different type of mortgage, move, or pay off your loan.

These loans are for veterans and service members only. You don’t need a down payment at all, and you’ll typically need a 620 credit score, although that number can vary. You don’t have to pay PMI either. If you are eligible, these are generally the best loans you can get.

These loans are for those with lower or moderate incomes who are buying a home in a designated rural area. A 0% down payment is required. Minimum credit scores can vary by lender but are typically 640. The PMI rates on these loans are usually low. 

These loans typically include competitive interest rates and down payment assistance. 

It’s important to note that government loan programs, such as FHA, VA, and USDA home loans, are for a primary residence only. You can’t use first time home buyer NJ programs for a vacation home or investment property.

New Jersey First Time Home Buyer Programs 

Here are some of the state and local first time home buyer programs in NJ available for you in New Jersey: 

New Jersey Housing and Mortgage Finance Agency

Are you a New Jersey first time home buyer? The New Jersey Housing and Mortgage Finance Agency (NJHMFA) is a great option for first time homebuyers in New Jersey. The agency also helps low and moderate-income families, older adults, and individuals with specialized housing needs with financing and facilitating access to affordable rental housing and homeownership opportunities. 

Programs that the NJHMFA offers include the NJHMFA Down Payment Assistance Program, the First Generation Down Payment Assistance Program, the HFA Advantage Mortgage Program, the first time Homebuyer Mortgage Program, the Homeward Bound Program, and the Police and Firemen's Retirement System Mortgage Program. The first-time home buyer NJ qualifications are that you haven’t owned a home within the previous three years.

New Jersey Housing and Mortgage Finance Agency, 637 South Clinton Avenue, P.O. Box 18550, Trenton, NJ 08625, (609) 278-7400

New Jersey USDA Rural Development

This program is not only for NJ first time home buyers. It assists those with low and very low incomes to obtain decent, safe, and sanitary housing in eligible rural areas. The program provides payment assistance that reduces the mortgage payment for a short time. The amount of assistance is determined by the adjusted family income. 

To be eligible for this program, applicants must have an adjusted income that is at or below the applicable low-income limit for the area where they wish to buy a house. They must also demonstrate a willingness and ability to repay the debt.

New Jersey Rural Development State Office, 521 Fellowship Road Suite 130, Mt. Laurel, NJ  08054, (856) 787-7700

Essex County Housing & Community Development

The Essex County Homebuyer Assistance Program (HAP) is funded through the HOME Investment Partnership Program of the United States Department of Housing and Urban Development (HUD). The program provides deferred payment loans to extremely low, very low, and low income households who need assistance with closing costs, down payments, and more. The program allows these households to purchase a home, townhouse, condominium, or duplex. 

Essex County Housing & Community Development, 465 Dr. Martin Luther King, Jr. Boulevard, Newark, NJ 07102, (973) 621-4400

New Jersey First Time Buyer FAQs

Are the First Time Home Buyer Programs in NJ Worth it?

Yes! first time home buyer programs can help you get into your home and save you lots of money.

Who Is Considered a First Time Home Buyer in New Jersey?

A first time buyer is anyone who has not had an ownership interest in a primary residence for the previous three years.

Who Qualifies for Down Payment Assistance in New Jersey?

First time homebuyers with an NJHMFA first mortgage loan qualify for assistance.

If you’re a first time home buyer in NJ, congratulations! When it comes time to relocate, call the best New Jersey movers at Harrington! Call 973-313-2246 for a free quote.

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