New Jersey First-Time Home Buyer Programs & Down Payment Assistance

Quick answer: As a first time home buyer in NJ, the main state option is the New Jersey Housing and Mortgage Finance Agency (NJHMFA). Its first mortgage programs can be paired with Down Payment Assistance (DPA) of up to $15,000 (depending on county), a deferred second mortgage that's forgiven after five years if you meet the program's terms. Eligible first-generation buyers can add $7,000, for up to $22,000 in total. Income and purchase price limits apply, and you must use an NJHMFA participating lender. FHA, VA, USDA and low-equity conventional loans are also worth comparing.

New Jersey is an expensive place to buy a first home, and the cash needed to close is often the biggest hurdle. The good news is that NJHMFA's assistance is fairly generous compared with many states. Here's how the programs work, who qualifies, the current limits (updated June 17, 2026), and how to decide whether a state program or a standard loan fits you better.

An important note: MortgageCS is a mortgage broker, not an NJHMFA participating lender. We don't originate NJHMFA loans or NJHMFA down payment assistance, and this guide is purely educational. NJHMFA programs are available only through NJHMFA participating lenders. The agency publishes that list and will match you with a lender if you fill out its form. What we can do is shop FHA, conventional, VA and other loans across multiple lenders, and show you side by side how an NJHMFA option compares with what we find.

Who is a first-time home buyer in New Jersey?

NJHMFA defines a first-time homebuyer as someone who hasn't had an ownership interest in their primary residence during the previous three years. A few exceptions apply:

• If you're buying in an Urban Target Area (UTA), or you're a qualified veteran, you don't have to be a first-time buyer for the First-Time Homebuyer Mortgage Program. You just can't own another primary residence at closing.
• The HFA Advantage conventional program waives the first-time requirement if you're not using down payment assistance.

You must move into the home as your primary residence within 60 days of closing.

NJHMFA programs at a glance

Program	Loan type	What it offers	Key notes
First-Time Homebuyer Mortgage Program	Fixed-rate FHA, VA or USDA	Foundation loan that pairs with DPA	Income and purchase price limits; higher limits in UTAs
Down Payment Assistance (DPA)	Deferred, forgivable second mortgage	Up to $15,000 by county	Forgiven after 5 years if you meet the terms; must pair with an NJHMFA first mortgage
First Generation DPA	Deferred, forgivable second mortgage	Extra $7,000 (total $17,000–$22,000)	For first-time buyers who are also first-generation buyers
HFA Advantage	Fixed-rate conventional	High loan-to-value financing with lower-cost mortgage insurance	620 minimum credit score; pairs with DPA
Homeward Bound	Fixed-rate FHA, VA or USDA	Alternative government-insured loan	Its own income limits; pairs with DPA
Police and Firemen's Retirement System (PFRS) Mortgage	Fixed-rate	Mortgage for eligible PFRS members	Maximum mortgage tied to Fannie Mae's baseline loan limit; rates set each February and August; not eligible for NJHMFA DPA

Sources: NJHMFA homebuyer program pages and fact sheets (updated 6/17/2026); NJHMFA Seller's Guide; NJHMFA PFRS fact sheet.

NJHMFA Down Payment Assistance: how much you can get

The amount depends on the county where the home is located:

County	DPA amount	With First Generation DPA
Bergen, Essex, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Union	$15,000	$22,000
Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Salem, Sussex, Warren	$10,000	$17,000

How the DPA works

• It's a second mortgage with repayment deferred. NJHMFA doesn't collect monthly installments on it.
• It's forgiven after five years if you live in the home as your principal residence the whole time and don't refinance or transfer the first mortgage.
• You can use it only once.
• It can go toward your down payment and closing costs, but not toward closing costs customarily paid by the seller, and not to cover an appraisal shortfall (when the home appraises below the purchase price).
• It must be paired with an NJHMFA first mortgage.

Bottom line: if you might sell or refinance within five years, ask how repayment would work before you commit.

The First Generation Homebuyer program

If you qualify, NJHMFA's First Generation DPA adds $7,000 on top of the standard DPA, on the same deferred, five-year forgivable terms. You must be a first-time buyer who is also either:

• Someone whose parents or legal guardians don't currently own any residential property (in the U.S. or abroad), and whose spouse or domestic partner and household members haven't owned a principal residence in the past three years; or
• Someone who has at any time been placed in foster care in New Jersey.

Assistance programs depend on funding, so confirm with an NJHMFA participating lender that First Generation funds are currently available when you apply.

NJHMFA income and purchase price limits

Limits for the First-Time Homebuyer Mortgage Program were updated for reservations on or after June 17, 2026. Statewide (non-UTA) limits:

Counties	Max income, 1–2 people	Max income, 3+ people
Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Hudson, Salem, Warren	$134,600	$154,790
Essex, Morris, Sussex, Union	$138,400	$159,160
Bergen, Passaic	$139,100	$159,965
Mercer	$139,800	$160,770
Monmouth, Ocean	$140,600	$161,690
Hunterdon, Middlesex, Somerset	$154,800	$178,020

Maximum purchase prices for a one-unit home range from $566,355 (Cumberland, Mercer, Warren) to $1,306,975 (Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, Union). Two- to four-unit homes have higher limits. If FHA or VA loan limits are lower, those apply instead.

Urban Target Areas have higher income limits (for example, $161,520 for a one- to two-person household in the lowest-limit county group). NJHMFA's online Site Evaluator tells you whether a specific address is in a UTA.

HFA Advantage and Homeward Bound have their own income limits, so check the fact sheet for the program you're considering.

Other options for NJ first-time buyers

NJHMFA isn't the only path. Depending on your income, savings and the home, one of these may be the better fit:

• FHA loans: High loan-to-value financing and flexible credit guidelines. See our FHA loan guide.
• Low-equity conventional loans: Fannie Mae HomeReady and Freddie Mac Home Possible allow loan-to-value ratios up to 97% for eligible buyers, and the mortgage insurance can come off later as you build equity.
• VA and USDA: Financing up to the full value of the home for eligible borrowers. Here's our VA and USDA loan overview.
• Local assistance: Some New Jersey counties and towns run their own programs. Our homebuyer grant programs page links to search tools from Fannie Mae, Freddie Mac and Down Payment Resource.

Above the income limits? A standard loan with a seller credit toward closing costs or a family gift can still keep your cash to close manageable. Here are three keys to understanding closing costs. Shopping at a higher price point? Check your county's conforming loan limits.

How to decide: NJHMFA or a standard loan?

Run both scenarios side by side and compare:

1. Cash to close. DPA can cut it dramatically, which is often the deciding factor.
2. Monthly cost. Compare principal, interest, mortgage insurance, taxes and insurance. New Jersey property taxes can change the math a lot.
3. Rate and fees. NJHMFA rates are set by the agency and change regularly. Compare APRs and Loan Estimates, not just advertised rates.
4. Your time horizon. The DPA is forgiven after five years. If you might move or refinance sooner, know what you'd owe.
5. Property type. NJHMFA allows single-family homes, condos, townhomes, certain manufactured homes and owner-occupied two- to four-unit homes, subject to FHA, VA, USDA or conventional property rules.

Steps to buy your first home in New Jersey

1. Know your numbers. Credit score, monthly debts, savings and a payment you're comfortable with.
2. Check program limits for the county (and UTA status) where you want to buy.
3. Get prequalified so you know your price range before you shop. Start a prequalification.
4. Get competing quotes: one from an NJHMFA participating lender if you're program-eligible, and one from a broker like MortgageCS for FHA, conventional or VA.
5. Plan your timeline. Assistance adds paperwork, so leave room in your contract before closing.

Frequently asked questions

How much is the NJ first-time home buyer down payment assistance?

NJHMFA's Down Payment Assistance is up to $15,000, depending on the county. Bergen, Essex, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset and Union counties are eligible for $15,000. Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Salem, Sussex and Warren counties are eligible for $10,000.

Is NJHMFA down payment assistance a grant?

It works like a forgivable loan rather than a grant. It's a second mortgage with repayment deferred, and it's forgiven after five years if you keep living in the home as your principal residence and don't refinance or transfer the first mortgage.

What is the NJ First Generation Homebuyer program?

It's an additional $7,000 in NJHMFA assistance for first-time buyers who are also first-generation buyers, meaning their parents or legal guardians don't currently own residential property, or who were placed in foster care in New Jersey. Combined with standard DPA, the total is $17,000 to $22,000 depending on county.

Who counts as a first-time home buyer in NJ?

NJHMFA defines a first-time homebuyer as someone who hasn't had an ownership interest in their primary residence during the previous three years. Buyers in Urban Target Areas and qualified veterans may be exempt from that requirement for the First-Time Homebuyer Mortgage Program, but can't own another primary residence at closing.

What are the income limits for NJHMFA programs?

For First-Time Homebuyer Mortgage Program reservations on or after June 17, 2026, statewide income limits range from $134,600 to $154,800 for one- to two-person households and from $154,790 to $178,020 for households of three or more, depending on county. Urban Target Areas have higher limits.

Can I use NJHMFA assistance with any lender?

No. NJHMFA's first mortgages and DPA must be originated through an NJHMFA participating lender, and the DPA must be paired with an NJHMFA first mortgage. MortgageCS is not an NJHMFA participating lender, but we can compare an NJHMFA offer with FHA, conventional or VA quotes we shop across multiple lenders, so you can see which option costs less overall.

Talk to a MortgageCS loan officer

MortgageCS works with New Jersey homebuyers from our home base just across the river in Newtown, PA. Because we're a broker, we shop multiple lenders for you, and we'll gladly put our numbers next to any NJHMFA option you get from a participating lender. Program terms are set by NJHMFA, and every loan is subject to credit approval.

Schedule a quick call with our team, see the New Jersey areas we serve, or call or text (215) 987-2602.

Sources

• NJHMFA: Homebuyer programs (DPA, First Generation, HFA Advantage, First-Time Homebuyer, Homeward Bound, PFRS)
• NJHMFA: First-Time Homebuyer Mortgage Program with DPA fact sheet and limits (updated 6/17/2026)
• NJHMFA: HFA Advantage fact sheet (updated 6/17/2026)
• NJHMFA: Homeward Bound fact sheet (updated 6/17/2026)
• NJHMFA: First Generation Homebuyer fact sheet
• NJHMFA: Police and Fire (PFRS) program fact sheet
• NJHMFA: Mortgage Program Policy and Procedures for Participating Lenders
• HUD: FHA loans
• Fannie Mae: HomeReady