New Jersey First-Time Home Buyer: 2023 Programs and Grants

December 14, 2022 - 8 min read

What to know about buying a house in New Jersey

Relatively high real estate prices can make buying your first home in New Jersey a challenge. But there’s plenty of help available. The Garden State has a wealth of special mortgages, down payment assistance, and educational courses for first-time home buyers. Here’s how to get started.

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New Jersey home buyer overview

It’s no surprise that buying in the Garden State may come at a premium. With miles of shoreline, historic cities, and its proximity to New York, New Jersey is an ideal location for many to purchase their first home.

The median sales price for homes in New Jersey was $470,000 in October 2022. That was an increase of 6.8% year-over-year for a single-family home, according to the New Jersey Realtors Association. So first-time buyers in the state may find they want to take advantage of the assistance programs described below.

New Jersey home buyer stats

Average Home Sale Price1$470,000
Minimum Down Payment in NJ (3%)$14,100
20% Down Payment in NJ$94,000
Average Credit Score in NJ2725
Maximum NJ Home Buyer Grant3Up to $40,000 in Jersey City

Down payment amounts are based on the state's most recently available average home sale price. “Minimum” down payment assumes 3% down on a conventional mortgage with a minimum credit score of 620.

If you're eligible for a VA loan (backed by the Department of Veterans Affairs) or a USDA loan (backed by the U.S. Department of Agriculture), you may not need any down payment at all.

First-time homebuyer mortgages in NJ

If you’re a first-time home buyer in New Jersey with a 20% down payment, you can get a conventional loan with a competitive interest rate. And you never have to pay for private mortgage insurance (PMI).

Of course, few first-time buyers have saved enough for 20% down. But the good news is that you don’t need that much. Not by a long shot.

Borrowers can often get into a new home with as little as 3% or even 0% down using one of these low-down-payment mortgage programs:

  • Conventional 97: From Freddie Mac or Fannie Mae. 3% down payment and 620 minimum credit score. You can usually stop paying private mortgage insurance after a few years
  • FHA loan: Backed by the Federal Housing Administration. 3.5% down and a 580 minimum credit score. But you’re on the hook for mortgage insurance premiums (MIP) until you refinance to a different type of mortgage, move, or pay off your loan
  • VA loan: Only for veterans and service members. Zero down payment is required. Minimum credit score varies by lender but often 620. No ongoing mortgage insurance after closing. These are arguably the best mortgages available, so apply if you’re eligible
  • USDA loan: For those on low-to-moderate incomes who are buying in designated rural areas. Zero down payment required. Credit score requirements vary by lender but often 640. Low mortgage insurance rates
  • New Jersey Housing and Mortgage Finance Agency loan programs: May include competitive interest rates and down payment assistance. More information below

Note that government loan programs (including FHA, VA, and USDA home loans) require you to buy a primary residence. That means you can’t use these loans for a vacation home or investment property.

In addition, most programs let you use gifted money or down payment assistance (DPA) to cover your down payment and closing costs. Depending on the mortgage loan you choose, you could potentially get into your new house with minimal cash out of pocket.

If you’re unsure which program to choose for your first mortgage, your lender or real estate agent can help you find the right match based on your finances and home buying goals.

New Jersey first-time home buyer programs

The New Jersey Housing and Mortgage Finance Agency (NJHMFA) provides step-by-step guidance and accessible tools to help you to make the right home purchase decision. A good place to start is to download The Road Home New Jersey: A Guide for the New Jersey Homebuyer from its website. That’s also available in Spanish.

NJMFA’s first-time home buyer assistance programs include:

  • NJMFA First-Time Homebuyer Mortgage
  • HFA Advantage Mortgage Program
  • Homeward Bound Program
  • NJHMFA Police and Firemen Retirement System Mortgage

Here’s a little more detail on each program.

NJMFA First-Time Homebuyer Mortgage

If you’re looking for assistance with your mortgage loan, the NJHMFA can hook you up with one of its approved mortgage lenders. Provided you qualify, the lender should offer you a competitive 30-year fixed-rate mortgage. This will be a government-insured loan backed by the FHA, VA, or USDA (depending on your eligibility for each program).

To qualify, you’ll need to be:

  • A first-time home buyer (haven’t owned a home in the past three years)
  • Within local household income limits
  • Buying a property within purchase price limits
  • Buying the home as a primary residence

This PDF will tell you income and sale price caps are where you want to buy in most of the state. And this one gives similar details if you’re buying in an urban target area.

HFA Advantage Mortgage Program

First-time home buyers in New Jersey who want to finance using a conventional loan may find what they’re looking for with the HFA Advantage Mortgage Program. This is a 30-year fixed-rate HFA loan that is paired with up to $15,000 in down payment assistance.

To qualify, you must purchase either a single-family home, condominium, or planned unit development (PUD). In addition, you’ll need a FICO score of at least 640 and also meet income limits established by Freddie Mac. More details are available in the program’s brochure.

Homeward Bound Program

New Jersey’s Homeward Bound program comes with up to $15,000 of down payment assistance. Aside from that, it’s similar to the First-Time Homebuyer Mortgage; both programs offer flexible underwriting guidelines and a government-backed loan. However, households with higher annual incomes might find the Homeward Bound Program’s higher income limits more agreeable.

NJHMFA Police and Firemen’s Retirement System Mortgage

New Jersey police officers and firefighters who have at least a year of service may be eligible for a 30-year, fixed-rate loan of up to $647,200 (loan limits are subject to change). Plus, there’s no first-time home buyer restriction. In addition to customary closing costs, this program’s loan terms also require additional lender and administrative fees.

New Jersey first-time home buyer grants

New Jersey can provide down payment and closing cost assistance of up to $10,000 through its statewide DPA program.

The NJHMFA Down Payment Assistance program starts off as a second mortgage of up to $10,000 with a 5-year loan term — not a grant. But the loan is interest-free and you don’t make any monthly payments. Better yet, it’s forgiven after you’ve lived in the home for five years without selling, refinancing, or paying off your loan early.

In other words, subject to those conditions, the down payment loan transforms into a grant after five years, and you don’t have to pay back a cent.

As described in the previous section, you’ll have to get an HFA, FHA, VA, or USDA loan as a first-time buyer to be eligible. And you’ll need to be within the income and home price caps.

Keep in mind that this is a statewide DPA program. There are likely other assistance programs available at the local level. So talk to your real estate agent and loan officer about other options where you plan to buy.

Buying a home in New Jersey’s major cities

Home prices in New Jersey cities are rising at fairly similar rates. In both Jersey City and Newark, for example, home prices inched up by 5.9% year-over-year in November 2022. Similarly, statewide residential real estate prices increased 6.8% over the same time period.

Newark first-time home buyers

The median home listing price in Newark was $360,000 in November 2022. That was up by 5.9% year-over-year, according to

If you want to buy a home at that median price, your down payment options might fall between:

  • $10,800 for 3% down payment
  • $72,000 for 20% down payment

Newark itself appears not to have its own home buyer assistance programs. But it is located in Essex county which does. There’s little information available online, but you can call (973) 655-0200 to learn more.

Jersey City first-time home buyers

The median home listing price in Jersey City was $635,500 in November 2022. That was up by 5.9% year-over-year, according to

If you want to buy a home at that median price, your down payment options might fall between:

  • $19,065 for 3% down payment
  • $127,100 for 20% down payment

It’s not evident whether or not Jersey City currently offers any down payment assistance to residents. Still, loan programs and DPAs come and go. Your loan officer will help you explore your options.

Paterson first-time home buyers

The median home listing price in Paterson was $348,900 in November 2022. That was up by flat year-over-year, according to

If you want to buy a home at that median price, your down payment options might fall between:

  • $10,470 for 3% down payment
  • $69,780 for 20% down payment

If Paterson City has a down payment assistance program, the information is not up-to-date online. But you can call (973) 321-1600 to see what’s currently on offer.

Where to find home buying help in New Jersey

All the organizations we’ve listed above should provide advice freely to any first-time home buyer in the state of New Jersey. In addition to our selection, the U.S. Department of Housing and Urban Development (HUD) provides a few lists of statewide, regional, and local resources:

Statewide and regional first-time home buyer resources in NJ

New Jersey first-time home buyer resources by county


What are today’s mortgage rates in NJ?

You can see today’s live mortgage rates in New Jersey here. Experiment with a mortgage calculator to see how down payment, interest rates, homeowners insurance, and property taxes will all affect your monthly mortgage payment.

When you’re ready to start the home buying process, make sure you get personalized rate quotes from at least three mortgage lenders. Don’t just look at advertised rates online; actually apply for preapproval and compare the interest rates and fees you’re offered. Because that’s the only way to know you’re getting the best deal possible on your new home loan.

1Source: New Jersey Realtors Monthly Indicators report

2Source: study of 2021 and 2020 data

3Based on a review of the state's available DPA grants at the time this was written