First Generation Down Payment Assistance Program

First Generation Down Payment Assistance Program is a forgivable loan for homebuyers in Statewide, New Jersey. Launched in 2024, the NJHMFA First Generation Down Payment Assistance Program is a Smart Start Plus tier that adds $7,000 to the standard NJHMFA Down Payment Assistance Program for qualified first-time homebuyers who are also first-generation homebuyers (defined as borrowers whose parents have never had a present ownership interest in residential real property, OR who have at any time been placed in foster care in New Jersey). The combined assistance totals $17,000-$22,000 depending on county, structured as an interest-free, 5-year forgivable second mortgage with no monthly payment. Must be paired with an NJHMFA first mortgage. During its first full year (2024), first-generation buyers comprised 38% of total NJHMFA DPA loan volume. Provides $7,000 of additional down payment and closing cost assistance to qualified first-time, first-generation homebuyers, on top of the standard NJHMFA Down Payment Assistance Program ($10,000-$15,000 by county). Combined total: $17,000-$22,000. Structured as an interest-free, 5-year forgivable second mortgage with no monthly payment. fully forgiven if the borrower remains in the home for 5 years. Funding comes from State and Bond.

First Generation Down Payment Assistance Program is forgiven after 5 years, so a homebuyer who stays that long does not repay it. Repayment is triggered by Sale, refinance (without approved subordination), transfer of property, or property no longer used as primary residence prior to the 5-year forgiveness period and balance forgiven 1/5 per year and fully forgiven on the 5th anniversary of closing. The assistance is recorded in 2nd Lien position. Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

First Generation Down Payment Assistance Program is open to first-time homebuyers and homebuyers who will live in the home as their primary residence. "First-time" has exceptions here: Borrowers purchasing in an Urban Target Area (UTA) and qualified veterans may be exempt from the 3-year first-time-homebuyer requirement (per NJHMFA first-mortgage rules); foster-care path under (b) waives the parents' ownership test of (a)(1). On credit, the program states: 620 minimum FICO (per NJHMFA first-mortgage product/insurer overlays, FHA/VA/USDA). A homebuyer education course is required, through NJHMFA-approved / HUD-approved homebuyer education and pre-purchase counseling providers; see Find a Counselor at https://www.nj.gov/dca/hmfa/homeowners/counselor. Residency requirement: Property must be located in New Jersey and used as the borrower's primary residence. Citizenship or immigration status: U.S. citizen or qualified non-citizen / lawful permanent resident (per NJHMFA first-mortgage requirements). Must be a first-time homebuyer (not owned a home in past 3 years) AND a first-generation homebuyer, defined as: (a) an individual whose parents or legal guardians do not have any present ownership interest in any residential real property in any U.S. state/territory or outside the U.S., AND whose spouse/domestic partner and household members have not had any present ownership interest in residential real property used as their principal residence during the 3-year period ending upon acquisition; OR (b) an individual who has at any time been placed in foster care in the State of New Jersey. Must be paired with an NJHMFA first mortgage. Pre-purchase homebuyer education required.

First Generation Down Payment Assistance Program limits household income to $176,410. The limit applies to total household income, not only the borrower’s. Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

First Generation Down Payment Assistance Program caps the purchase price at $2.4M. Eligible property types include 1-4 unit owner-occupied dwellings, condominiums, planned unit developments (PUDs) and per NJHMFA first-mortgage program. New construction is eligible. Manufactured homes are eligible.

First Generation Down Payment Assistance Program names veterans, active-duty service members, reservists and National Guard members, and surviving spouses among the groups it serves. Being named here means the program mentions the group, not that membership alone qualifies an applicant — the rest of the eligibility rules still apply.

First Generation Down Payment Assistance Program serves homebuyers purchasing in Statewide, New Jersey. The program targets specific areas: NJHMFA Urban Target Areas (UTAs) - federally designated targeted census tracts in NJ - receive higher purchase price and income limits and waive the 3-year first-time-homebuyer requirement. Includes census tracts in cities such as Trenton, Newark, Paterson, Camden, Atlantic City, New Brunswick, Jersey City, and others.

Applications for First Generation Down Payment Assistance Program go through the administering agency, which publishes the current terms and the application steps on its own site. Funds are reserved through Reserved by NJHMFA Participating Lender at the time of first-mortgage reservation through NJHMFA's lender portal. Hey Prescott is not a lender and does not accept applications; this page describes the program so a homebuyer can take it to a lender or housing counselor.