New Jersey Down Payment Assistance Programs

New Jersey Down Payment Assistance Programs
New Jersey Down Payment Assistance Programs

There are several support programs in New Jersey that help buyers with finances to purchase a home. You should take advantages of these programs especially if you are a first time buyer who does not have enough money.
Buying a house is a big financial transaction; this needs you to weigh your options first before any decision is made.

Down payment levels vary with different programs. You should check with different New Jersey down payment assistance programs for qualification criteria for particular levels. For most programs, you need to be at least attained the age of 18 years and a residence of New Jersey.

You can get down payment support from any of the following sources:

  1. Nonprofit housing agencies
  2. Federal and bank home loans and mortgage financing
  3. Tax credits
  4. Grants
  5. USDA
  6. Live Where You Work
  7. Affordable Housing
  8. NJ Smart Start
  9. Gifts

Check with NJ Housing Agencies will provide financial support, counseling and guidance on home financing. There are New Jersey down payment assistance programs suitable for any type of home buyer. Being a first time buyer, i.e. you have not bought a home in the last three years; you are more likely to get financial assistance. The first time home buyer program that is funded by NJ Housing and Mortgage Finance Agency (NJHMFA) will give you priority.

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First-Time Homebuyer Program This New Jersey down payment program offers what it describes as below market interest rates with zero points on 30 year loans for single family and multi family homes. New Jersey borrowers are subject to purchase price and income limits. New Jersey borrowers can put as little as 3.5 percent New Jersey down, but the New Jersey down payment funds must come from the New Jersey borrower. However, at least a portion of the closing costs can be gifted or provided from someone other than the New Jersey borrower. The debt to income ratio for housing debt can be as high as 33 percent, and up to as high as 38 percent if counting total debts.

Live Where You Work Program This New Jersey down payment program allows residents to purchase homes in the town in which they work —has been made available statewide. The program offers fixed rate mortgages at low interest rates and New Jersey down payment and closing cost assistance that is forgivable. Expanded DTI ratios to make the loans easier to qualify for. The LWYW program can be used on 1 4 unit properties.

Smart Start Program If you are enrolled in the First Time Home buyer Program you can utilize the Smart Start program to borrow a second mortgage to cover New Jersey down payment and closing costs of up to 4 percent of the first mortgage in Smart Growth Areas across the state.


Regardless of which type of down payment program, you will first need a mortgage. Below are mortgages that require low or no down payments:

No Down Payment Mortgages – mortgages that require no down payment

USDA Rural Loan – the purpose of the Single Family Housing Direct Home Loan is to assist low- and very-low-income applicants obtain decent, safe and sanitary housing in eligible rural areas by providing payment assistance to increase an applicant’s repayment ability. There is no down payment. Payment assistance is a type of subsidy that reduces the mortgage payment for a short time. The amount of assistance is determined by the adjusted family income.

VA Home Loan – VA helps Service members, Veterans, and eligible surviving spouses become homeowners. As part of our mission to serve you, we provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy. There is no down payment as long as the sales price doesn’t exceed the appraised value.

 

Low Down Payment Mortgages – mortgages that require up to 3.5% down payment

FHA Mortgage Loan – the purpose of the FHA Home Mortgage Loan is to provide mortgage insurance for a person to purchase or refinance a principal residence. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, savings and loan association and the mortgage is insured by HUD. A down payment of just 3.5 percent is required and may consist entirely from “gift funds.” The credit score requirement is 580.

Home Possible® Advantage Mortgage – the purpose of the Home Possible® Advantage mortgage by Freddie Mac is to offer low down payments for low- to moderate-income homebuyers or buyers in high-cost or underserved communities. Down Payment can come from a variety of sources, including friends and family, employer-assistance programs and secondary financing.

The HomeReady™ Mortgage – the purpose of the HomeReady™ mortgage by Fannie Mae is to provide flexibility for applicants buy home with down payments as low as 3%, below market mortgage rates, co-borrower flexibility, additional income sources and reduced mortgage insurance costs.

More places to find assistance on down payment:

HUD Programs

The US Department of Housing and Urban Development (HUD) offers the following programs:

Good Neighbor Next Door Program

The Good Neighbor Next Door Program was created by U.S. Department of Housing and Urban Development (HUD) to help law enforcement officers, pre-Kindergarten through 12th grade teachers, firefighters and emergency medical technicians buy homes. The biggest benefit of the Good Neighbor Next Door Program is the 50% discount of the home’s list price. The only catch is that the home owner must commit to live in the property for 36 months as their sole residence.

To learn more about the Good Neighbor Next Door Program, click here.

Section 184 Loan – The Indian Home Loan Guarantee Program

The Section 184 Indian Home Loan Guarantee Program is a mortgage for American Indian and Alaska Native families, Alaska villages, tribes, or tribally designated housing entities. In 1992 Congress created this program to help Native American Communities with homeownership.

Section 184 loans helps borrowers buy homes with a low down payment and flexible underwriting. Moreover, the loan does not need to be used only on properties on native lands. Purchase of an existing home for single-family residences. Also allowed are new construction, rehabilitation, and refinance.

To learn more about Section 184, click here.

New Jersey Housing Agencies

New Jersey housing agencies are your best resource for down payment assistance programs. Through funding from HUD, the purpose of these agencies is to ensure that affordable housing is available for everyone.