Down Payment Assistance in New Jersey: Programs That Make Homeownership Possible
New Jersey is one of the most expensive states in the country for homebuyers — with a median home price exceeding $550,000 and a competitive market that can feel deeply discouraging for first-time buyers. New Jersey has invested meaningfully in solving this problem. The New Jersey Housing and Mortgage Finance Agency (NJHMFA)
administers one of the most accessible statewide Down Payment Assistance programs in the Northeast — and when layered with federal programs and local assistance, buyers can access $22,000 to $30,000 or more in forgivable or grant-based support.
The Bookspan Baker Team at Guild Mortgage is an approved NJHMFA lender with experience helping New Jersey buyers identify and stack every available resource.
NJHMFA: New Jersey's Primary DPA Agency
The New Jersey Housing and Mortgage Finance Agency (NJHMFA) is the state’s primary source of Down Payment Assistance for first-time homebuyers. NJHMFA DPA is available through a network of approved lenders — including the Bookspan Baker Team — and requires an NJHMFA first mortgage and completion of a HUD-approved homebuyer education course.
NJHMFA Down Payment Assistance Program: Up to $15,000
Amount
Up to $15,000 (amount varies by county; South Jersey counties may receive up to $10,000)
Structure
Zero-interest second mortgage — no monthly payment required
Forgiveness
Forgiven completely after 5 years of owner-occupancy. Sell, refinance, or move before 5 years and a prorated portion is repaid.
Compatible Loan Types
FHA, VA, USDA, and Conventional loans through NJHMFA’s first mortgage program
First-Time Buyer Required
Yes — not owned a primary residence in the past 3 years
Minimum Credit Score
620
Income Limits
Vary by county and household size; generally cannot exceed 140% of Area Median Income
Homebuyer Education
Required — a HUD-approved course must be completed before closing
First Generation Down Payment Assistance: Additional $7,000
For first-time buyers who are also first-generation homeowners — meaning no parent or guardian has owned a home in the past three years — NJHMFA offers a stacked second program adding another $7,000.
Combined with the standard $15,000 DPA, first-generation buyers can receive up to $22,000 in total forgivable assistance — making it one of the most generous statewide first-time buyer programs in the country.
Homebuyer Dream Program (HDP): Grants Up to $30,000
The Homebuyer Dream Program, administered through the Federal Home Loan Bank of New York, provides grants of up to $30,000 for eligible homebuyers through participating member banks and lenders.
Amount
Up to $30,000
Structure
Grant — does not need to be repaid (subject to retention requirements)
Income Limits
Generally 80% to 120% of Area Median Income
Buyer Contribution
A minimum $1,000 personal contribution is required
Availability
Funds are allocated annually and distributed on a first-come, first-served basis — typically in spring
Compatible with NJHMFA
HDP grants can be combined with NJHMFA first mortgages and DPA
When HDP and NJHMFA programs are combined, qualifying buyers can access $37,000–$52,000 in total assistance.
NJ Community Capital (NJCC) Program: Up to $30,000 (Pending 2026 Funding)
NJCC offers a separate statewide DPA program providing up to $30,000. The program was fully committed in 2025 and paused July 15, 2025. Applications are expected to reopen when 2026 funding becomes available. Connect with a participating lender early to be positioned to apply when funding opens.
Local and Municipal Programs
Camden County First Time Homebuyer Program: Up to $25,000 as a 0% deferred loan, fully forgivable after 5–10 years.
Newark: Deferred-payment DPA programs for buyers purchasing within Newark city limits.
Trenton: Up to $15,000 in forgivable loan assistance for low- and moderate-income first-time buyers.
Monmouth County: Deferred second-mortgage DPA for buyers meeting income thresholds.
How NJ DPA Pairs With Each Loan Type
FHA + NJHMFA DPA: The most common combination. FHA’s 3.5% down requirement can be largely or fully offset by NJHMFA DPA funds.
Conventional + NJHMFA DPA: For buyers with stronger credit (620+), pairing a low-down-payment conventional loan with NJHMFA DPA can avoid FHA mortgage insurance while minimizing cash at closing.
VA + NJHMFA DPA: VA Loans already require no down payment. For eligible first-time veteran buyers, NJHMFA DPA can offset closing costs.
What New Jersey DPA Buyers Should Know
NJHMFA DPA is forgivable, not a grant — it converts to a true grant after 5 years, but requires prorated repayment if you sell, refinance, or move before then.
Income limits apply — vary by county and household size; the cap at 140% AMI excludes higher earners in some markets.
HDP funds are first-come, first-served — when annual funding opens in spring, it moves quickly.
Homebuyer education is mandatory for all NJHMFA participants.
NJ has no Mortgage Credit Certificate program.
Frequently Asked Questions: Down Payment Assistance in New Jersey
NJHMFA’s DPA provides up to $15,000 as a zero-interest second mortgage with no monthly payments, forgivable after 5 years of owner-occupancy. It must be paired with an NJHMFA first mortgage and requires a 620 credit score, income within program limits, and HUD-approved homebuyer education.
Yes. First-generation buyers can stack the standard $15,000 NJHMFA DPA with an additional $7,000 First Generation DPA for a total of $22,000 in forgivable assistance.
The HDP is a Federal Home Loan Bank of New York program providing grants up to $30,000 for eligible buyers through participating lenders. It requires a minimum $1,000 buyer contribution, income within program limits, and is funded annually on a first-come, first-served basis.
Not initially — it is a zero-interest second mortgage. It converts to a true grant after 5 consecutive years of owner-occupancy. Selling or refinancing before 5 years triggers prorated repayment.
In many cases, yes. NJHMFA DPA can be combined with HDP grants and some local municipal programs.