NJHMFA, which stands for the New Jersey Housing and Mortgage Finance Agency, offers this down payment program as a way to help eligible applicants with the down payment and closing costs associated with a real estate transaction.

As much as $10,000 is offered as a 0% second mortgage. This loan has no monthly payments, and can be forgiven completely after the 5-year term as long as the borrower continues to use the property as their primary residence. This program is only available to first time homebuyers who have not owned a house in the prior three-year period.

All applicants have to utilize a participating lender in order to be eligible. The minimum allowed credit score is 620. Further, applicants cannot have the liquid assets available to them to close on a mortgage at 80% loan-to-value or less. Applicants must also fall within certain income limits. The number of people in the household, location, and funding source all affect these limits. However, the income limit will never be more than 140% of the AMI, or area-median-income.

Only primary residences in New Jersey are allowed for this program. The residence can be a single-family house, condominium, townhouse, manufactured, or mobile house. It must be permanently affixed to real property. Two-to-four-unit properties can be allowed as long as one of the units is occupied by the applicant.

Properties will also have to fall within specified purchase price limits.

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