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New Jersey Homebuyer Incentive Program

$22,000

Housing & HomeownershipFirst Time Homebuyer
New Jersey Homebuyer Incentive Program

About the Program

Buying a home is a big step and it can be hard to know where to start. New Jersey Housing and Mortgage Finance Agency (NJHMFA) provides a variety of programs to assist prospective homebuyers.

Step One

Credit and Credit History
It’s no secret. Your credit history will affect your ability to obtain a mortgage for your home purchase. Lenders want to see a record of how you borrowed, and how timely you repaid money in the past. These money management habits are reflected in your credit score. Credit scores range from 300 to 850 and lenders believe that borrowers with higher scores are more likely to repay their loan.Down

Payments
You will need to make an investment in your new home, called a down payment, in order to obtain a mortgage. A down payment is the upfront portion of a home's purchase price that you pay out of pocket, with the rest financed by a mortgage loan, typically 3% or more thereby reducing the amount borrowed. It shows your commitment to the lender and reduces their risk, making you a less risky borrower. NJHMFA offers a down payment assistance program, which provides eligible first-time homebuyers with up to $22,000 of down payment assistance in the form of a five-year forgivable loan.

Step Two

Fill Out the NJHMFA Lender Request Form

  • NJHMFA works with a number of participating lenders that are authorized to take part in our homebuyer programs. Participating lenders will help you get the homebuying process started, take your mortgage application for both the first mortgage and down payment assistance, and provide guidance on the best program to fit your needs.
  • Complete the Lender Request Form on the NJHMFA website by entering your contact information and answering a few basic questions.
  • NJHMFA will pair you with three loan officers based on your location, contact preferences, and language. Only NJHMFA participating lenders that produce significant volume are included in the program.

Step Three

Work With Your NJHMFA Participating Lender

  • Your lender will work with you to obtain a loan to finance the purchase of your home. The lender will walk you through the homebuying process, help you understand what you can reasonably afford, and be there to answer any questions you might have.
  • Prior to finding your home, you may choose to get prequalified or preapproved for a mortgage:Prequalification
    This is a simple process which can be done over the phone or online, usually without cost. You supply a bank or lender with your overall financial picture, including your debt, income, and assets. After evaluating this information, a lender can discuss with you the mortgage types and amount for which you would qualify.Preapproval
    Completing this stage will help you stay realistic with your expectations while shopping for a home. You’ll know exactly how much you are able to spend, since a lender or bank will now perform an extensive check on your financial background and current credit rating once you provide the necessary documentation and fill out an official mortgage application, for which you will pay a fee.The lender can then tell you the specific mortgage amount for which you are approved and the interest rate you will be charged on the loan. In some cases, you might be able to lock in a specific rate.Armed with this information, you are able to show a potential seller that you are serious and when you make an offer, it’s with the understanding that you are sure it’s what you can afford. Being pre-approved could also prevent you from losing the home to another potential buyer who already has financing arranged.

Step Four

Attend a Homebuyer Counseling Course

  • The Department of Housing and Urban Development sponsors approved housing counseling agencies throughout the country to provide free or low-cost advice on buying a home, renting, default, foreclosure avoidance, credit issues, or reverse mortgages.
  • NJHMFA requires homebuyers attend an education course conducted by a HUD-approved counseling agency.
  • The counseling course is an easy-to-understand class exploring the various aspects of homebuying. The class will cover budgeting for a home, choosing a neighborhood, finding the right home, and learning the definitions of a variety of mortgage types and real estate terms.
  • The course will also cover applying for a mortgage, down payment and closing cost requirements, credit, making an offer, the home inspection, preparing for closing, and post-purchase issues​.
  • Housing counseling agencies are staffed by counselors who are trained and approved to provide tools to current and prospective homeowners and renters that will help them make responsible choices that best match their housing needs with their financial situations.

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