New Jersey First-Time Home Buyer: 2021 Programs and Grants

Peter Warden
Peter Warden
The Mortgage Reports Editor
July 9, 2021 - 7 min read

What to know about buying a house in New Jersey

Buying your first house can be a challenge. But there’s plenty of help available. The Garden State has a wealth of advice, counseling, and educational courses for first–time buyers.

And you might even be in line for some serious financial help with your down payment and closing costs. New Jersey has plenty of assistance programs for first–time buyers. Here’s how to get started.

Verify your home buying eligibility in NJ (Dec 6th, 2021)

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New Jersey home buyer overview

Home prices in the Garden State shot up by 24% between the first quarters of 2020 and 2021. So first–time buyers in the state may find they want to take advantage of the assistance programs described below.

New Jersey Home Buyer Overview
Average Home Sale Price $500,630
Minimum Down Payment in NJ (3%) $15,020
20% Down Payment in NJ $100,130
Average Credit Score in NJ1 721
Maximum NJ Home Buyer Grant2 Up to $40,000 for down payment and closing cost assistance 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 US 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 low interest rate. And you never have to pay for private mortgage insurance (PMI).

Of course, few first–time buyers have saved enough for 20 percent down. But the good news is, 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 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 until you refinance to a different type of mortgage, move home, 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 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

Depending on the mortgage loan you choose, you could potentially get into your new house with minimal cash out of pocket.

These programs even let you use gifted money or down payment assistance (DPA) to cover the down payment and closing costs.

If you’re not sure which program to choose for your first mortgage loan, your lender can help you find the right match based on your finances and home buying goals.

Find the best first-time home buyer loan for you (Dec 6th, 2021)

New Jersey first–time home buyer programs

The New Jersey Housing and Mortgage Finance Agency (NJHMFA) says it’s “happy to offer step–by–step guidance and accessible tools to enable you to make the right home purchase decision.”

A good place to start is to download the The Road Home New Jersey: A Guide for the New Jersey Homebuyer from its website. That’s also available in Spanish.

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
  • 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.

If you want financial assistance with your down payment and closing costs, you’ll have to use one of the NJHMFA’s participating lenders.

New Jersey first–time home buyer grants

The NJHMFA can provide down payment and closing cost assistance of up to $10,000.

Technically, that starts off as a loan – 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 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, this a statewide DPA program. There are likely other assistance programs available at the local level. So talk to your real estate agent and/or loan officer about other options where you plan to buy.

Verify your home buying eligibility in NJ (Dec 6th, 2021)

Buying a home in New Jersey’s major cities

Home prices in New Jersey cities are rising at very different rates.

In Newark, for example, they’d inched up by only 2.4% year–over–year in May 2021. But in Paterson they’d rocketed by an extraordinary 45.7% over the same period.

Most of us have to move to a particular city for work or family reasons. But, if you have flexibility with work and location, you may want to pick the real estate market you can best afford – perhaps even if it’s a little outside your favorite city.

Newark first–time home buyers

The median home listing price in Newark was $359,000 in May 2021, according to That was up by 2.4% year–over–year.

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

  • $10,770 for 3% down payment
  • $71,800 for 20% down payment

Newark itself appears not to have its own home buyer assistance programs. But it is located in Essex county and that does. Unfortunately, there’s little information available online. But you can call (973) 655–0200 to learn more about Essex county down payment assistance programs.

Jersey City first–time home buyers

The median home listing price in Jersey City was $640,000 in May 2021, according to That was up by 20% year–over–year.

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

  • $19,200 for 3% down payment
  • $128,000 for 20% down payment

The Jersey City Golden Neighborhoods Homeownership Program can provide loans of up to $40,000 toward down payment and closing costs to first–time buyers purchasing in the city.

Its fact sheet looks pretty out of date. But you can call (201) 547–5000 for current information.

Paterson first–time home buyers

The median home listing price in Paterson was $335,000 in May 2021, according to That was up by 45.7% year–over–year.

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

  • $10,050 for 3% down payment
  • $67,000 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 NJ

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 for statewide, regional, and local resources:

Statewide and regional first-time home buyer resources

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.

When you’re ready to start the home buying process, make sure you get personalized rate quotes from at least 3 mortgage lenders.

Don’t just look at advertised rates online; actually apply for preapproval and compare the interest rates and fees you’re offered. That’s the only way to know you’re getting the best deal possible on your new home loan.

Show me today's rates (Dec 6th, 2021)

1 Source: 2021 study of 2020 data

2Based on a review of the state's available DPA grants at the time this was written

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