First Generation Down Payment Assistance Program

What is 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.

Do you have to pay it back?

First Generation Down Payment Assistance Program is forgiven after 5 years, so a buyer 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.

Who qualifies?

First Generation Down Payment Assistance Program is open to first-time homebuyers and buyers who will live in the home as their primary residence.

What are the income limits?

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.

What kind of home can it be used for?

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.

Is there eligibility for specific groups?

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.

Where does it apply?

First Generation Down Payment Assistance Program serves buyers 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.

How do you apply?

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.

1. 1

   Take a homebuyer education course

   Required by the program, 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.

2. 2

   Contact the administering agency to reserve funds

   Funds are reserved through Reserved by NJHMFA Participating Lender at the time of first-mortgage reservation through NJHMFA's lender portal, and are subject to availability.

3. 3

   Work with a lender who handles the program

   Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.