Help For First-Time Homebuyers In The Garden State

Jan 27, 2024 By Susan Kelly

The joy of house hunting is tempered by the reality that the high cost of real estate in New Jersey may make a person feel like they are about to pass out. Many people are moving to suburban areas in the Garden State, driving home prices in places like Princeton, Montclair, and Westfield.

The New Jersey Housing and Mortgage Finance Agency works with reputable lenders to provide attractive loan terms and help with closing costs for first-time and repeat homebuyers. The organization's housing initiatives are outlined below.

Funding options for New Jersey's first-time homebuyers

A Mortgage from the New Jersey Housing and Mortgage Finance Agency for First-Time Buyers

With The Help of The New Jersey Housing and Mortgage Finance

In addition to the down payment assistance provided by the New Jersey Housing Mortgage Finance Agency (NJHMFA), first-time homebuyers in New Jersey can take advantage of attractive interest rates and terms on government-backed 30-year fixed-rate mortgages. All prospective borrowers must achieve the following standards:

  • This is your first time purchasing a house, or you haven't owned a home in the prior three years.
  • Your principal residence must be in New Jersey.
  • Your debt-to-income ratio and credit score must be acceptable.
  • Income and purchase price must meet NJHMFA restrictions.

NJHMFA Mortgage for Police and Firemen

When purchasing a home, NJHMFA is also there to help individuals who work with New Jersey citizens. New Jersey police and fire personnel who have served for at least one year and are members of the Police and Firemen's Retirement System are eligible to apply for a competitive 30-year fixed-rate loan of up to $647,200.

As long as the property will serve as your principal residence, you can use the funds to buy a single-family home, a multi-family unit, a condominium, or even a plot of land.

Besides the usual closing expenses, there are a few fees to consider when applying for this program: a lender charge of $1,500 and an administrative fee of $325. If your down payment is less than 20%, mortgage insurance premiums must be paid.

Help With The Down Payment In The State of New Jersey

To help first-time homebuyers with their down payments and closing expenses, NJHMFA offers the Down Payment Assistance (DPA) program, which can give you up to $10,000. The money is available in the form of a second mortgage forgivable after five years. The loan does not need monthly payments, and no interest is charged. Among the prerequisites that must be met are the following:

  • The first mortgage must be NJHMFA.
  • Buying a home in New Jersey as your principal residence is required.
  • You cannot be a current or former homeowner within the last three years.

Different Loan Programs for New Homeowners

If you're a first-time homeowner, looking at more than just the NJHMFA's offerings is important. If you need help meeting the credit or down payment criteria for a mortgage, you may be able to qualify for a loan sooner if you apply for a government-backed FHA, VA, or USDA loan. The Good Neighbor Next Door program provides an alternative for first-time homebuyers in specific public service positions.

Help For First-Time Homebuyers In New Jersey

New Jersey's statewide DPA program can give up to $10,000 in help with the down payment and closing costs. First, the NJHMFA Down Payment Assistance program is not a grant but a second mortgage of up to $10,000 for 5 years. The loan does not need monthly payments, and no interest is charged.

Even better, it's waived after five years of ownership without sale, refinance, or prepayment. That's right; after five years, the down payment loan will convert into a grant, meaning you won't owe a dime.

To be qualified as a first-time buyer, you must obtain financing through one of the government agencies listed above. In addition, your salary and the value of your property must be within the allowed ranges.

How Much Are New Jersey Mortgages Today?

View New Jersey's current mortgage interest rates right now. Try out a different down payment, interest rate, insurance, and tax scenarios to understand how each variable will affect your mortgage payment.

Get tailored rate estimates from at least three mortgage providers before you begin the house-purchasing process. Avoid relying just on internet rate ads; instead, request preapproval and evaluate the terms given to you. Simply put, that's the only way to ensure you get the greatest rate on your new mortgage.

Related Articles