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

By: Peter Warden Updated By: Ryan Tronier
March 31, 2023 - 8 min read

What to know about buying a house in New Jersey

Purchasing your first home in New Jersey can be difficult due to the state’s relatively high real estate costs. But there is plenty of assistance available. If you’re a New Jersey first-time home buyer, the Garden State offers a wide variety of unique mortgages, down payment aid, and educational programs. Here’s how to start.

In this article (Skip to ...)

New Jersey home buyer overview

Unsurprisingly, purchasing in the Garden State might be more expensive. Many people choose New Jersey as the ideal location to buy their first house because of its miles of shoreline, historic cities, and close proximity to New York.

The median sales price for homes in New Jersey was $440,000 in February 2023. According to the New Jersey Realtors Association, that represented an increase of 2.4% for a single-family home from the previous year. As a result, first-time buyers in the state may wish to take advantage of the assistance programs described below.

New Jersey home buyer stats

Average Home Sale Price1$440,000
Minimum Down Payment in NJ (3%)$13,200
20% Down Payment in NJ$88,000
Average Credit Score in NJ2724
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 have a 20% down payment and are a first-time home buyer in New Jersey, you can get a conventional loan with a competitive interest rate and no 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.

Furthermore, the majority of programs allow you to use gifted funds or down payment assistance (DPA) to cover your down payment and closing costs. Depending on your mortgage loan, you may be able to move into your new home with little money 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 make the right home purchase decision. Downloading The Road Home New Jersey: A Guide for the New Jersey Homebuyer from its website is a good place to start. 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

NJMFA First-Time Homebuyer Mortgage Program

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. Depending on your eligibility for each program, this will be a government-insured loan from the FHA, VA, or USDA.

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
  • Apply for a home loan with a participating lender

If you’re looking to buy in an urban target area, check out the website for more information on income and sale price caps.

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 30-year fixed-rate HFA loan is paired with up to $15,000 in down payment assistance.

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

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. But the Homeward Bound Program’s higher income limits might be more appealing to families who make more money each year.

NJHMFA Police and Firemen’s Retirement System Mortgage

New Jersey police officers and firefighters with at least one year of service may be eligible for a 30-year, fixed-rate loan of up to $726,200 (loan limits are subject to change). Furthermore, there are no restrictions for first-time home buyers. The loan terms for this program require extra lender and administrative fees on top of the usual closing costs.

New Jersey first-time home buyer grants

New Jersey can provide down payment and closing cost assistance of up to $15,000 through its statewide DPA program.

The NJHMFA Down Payment Assistance program starts off as a second mortgage of up to $15,000 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 have not seen much movement in the last twelve months. In both Jersey City and Newark, for example, home prices remained flat year-over-year in February 2023. At the state level, residential real estate prices increased by just over 2% during the same time period.

Newark first-time home buyers

In February 2023, the median listing price for a home in Newark was $350,000. According to, home prices were stable year over year.

If you wish to purchase a home at this median price, your down payment choices may include:

  • $10,500 for 3% down payment
  • $70,000 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

In February 2023, the median list price for a home in Jersey City was $650,000. According to, home prices in this city remained stable year over year, just as they did in Newark.

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

  • $19,500 for 3% down payment
  • $130,000 for 20% down payment

It’s unclear whether Jersey City helps people with their down payments right now. Still, loan programs and DPAs come and go. Your loan officer will help you explore your options.

Paterson first-time home buyers

In February of 2023, the median list price for a home in Paterson was $350,000. According to, home prices actually decreased by 2.6% annually.

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

  • $10,500 for 3% down payment
  • $70,000 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 New Jersey

All the organizations we’ve listed above should provide free advice 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

What are today’s mortgage rates in NJ?

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

When you’re ready to start the home buying process, get personalized rate quotes from at least three mortgage lenders. Instead of looking at advertised rates online, apply for preapproval and compare the interest rates and fees. Because that is the only way to ensure you receive the best possible deal on your new home loan.

1Source: New Jersey Realtors Monthly Indicators report

2Source: study of 2022 and 2021 data

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

Peter Warden
Authored By: Peter Warden
The Mortgage Reports Editor
Peter Warden has been writing for a decade about mortgages, personal finance, credit cards, and insurance. His work has appeared across a wide range of media. He lives in a small town with his partner of 25 years.
Ryan Tronier
Updated By: Ryan Tronier
The Mortgage Reports Editor
Ryan Tronier is a personal finance writer and editor. His work has been published on NBC, ABC, USATODAY, Yahoo Finance, MSN Money, and more. Ryan is the former managing editor of the finance website Sapling, as well as the former personal finance editor at Slickdeals.