Most first-time buyers in South Jersey walk into the process assuming they need 20% down. On a $350,000 house in Cherry Hill, that's $70,000 — and that number alone stops people from ever calling an agent.

Here's what a lot of them don't know: New Jersey will hand you up to $22,000 toward that purchase, at zero interest, with no monthly payment, and forgive the entire balance if you stay in the house five years.

It's not a scam and it's not a gimmick. It's the NJHMFA Down Payment Assistance Program, run by the New Jersey Housing and Mortgage Finance Agency — a state agency. The money is real. The catch isn't in the fine print; it's that the program requires you to structure your mortgage a specific way, and a lot of buyers find out about it after they've already gone under contract with a lender who never mentioned it.

This is what the program actually covers, who qualifies, and what it looks like on a real South Jersey purchase.

What the program actually is

The NJHMFA Down Payment Assistance Program (usually shortened to "the DPA") gives qualified first-time buyers up to $15,000 toward a down payment, closing costs, or both. The exact amount depends on the county where you're buying.

The structure is what makes it valuable:

• It's a second mortgage, not a grant — but it carries 0% interest
• There is no monthly payment on it, ever
• It's forgiven completely after five years, as long as you live in the home as your primary residence and don't refinance or sell the first mortgage during that window

So functionally, if you stay put for five years, it's free money. If you sell in year three, you pay back the balance at closing — still without having paid a dollar of interest.

That five-year clock is the one condition that trips people up, and it's worth being honest with yourself about before you apply. If there's a real chance you'll be relocated for work in year two, the math changes.

The First Generation supplement: another $7,000

NJHMFA runs a second program stacked on top of the first, called the First Generation Down Payment Assistance Program. It adds $7,000 on the same terms — 0% interest, no monthly payment, forgiven after five years.

Combined, that puts total assistance at $17,000 to $22,000 depending on your county and eligibility.

You qualify as a first-generation homebuyer if you're a first-time buyer and either:

• Your parents or legal guardians don't currently own residential property anywhere — in any state, territory, or country — and neither your spouse, domestic partner, nor anyone in your household has owned a primary residence in the past three years, or
• You were at any point placed in foster care in the State of New Jersey

That foster care provision is worth calling out. It's an automatic qualifier, it doesn't depend on your parents' property ownership, and almost nobody knows it exists.

Who qualifies for the base program

Four requirements:

You're a first-time buyer. New Jersey defines this as not having owned a home in the previous three years. If you owned a house in 2019 and have rented since, you're eligible again. This surprises people constantly — prior ownership doesn't disqualify you permanently.

You're buying in New Jersey as a primary residence. Any county. No investment properties, no second homes.

Your household income falls under the limit. Limits vary by county and by household size. They're recalculated periodically, so any number you find in a blog post — including a range you might see quoted elsewhere — should be confirmed against current figures with a participating lender before you make decisions.

The purchase price falls under the limit. Also set by area. Most South Jersey inventory sits comfortably under these caps, which is exactly why this program works better here than it does in Bergen or Monmouth.

The Urban Target Area advantage most buyers miss

Here's the piece that matters specifically for South Jersey.

NJHMFA designates certain areas as Urban Target Areas (UTAs). Properties inside a UTA qualify for higher income limits than the standard county figure. Same program, same money, more generous eligibility ceiling.

If your income came in slightly over the limit for your county, buying a few blocks in a different direction can put you back inside the program.

South Jersey has UTA-designated areas across our service region. 

This is a genuinely underused strategy. We've seen buyers write off the program entirely on income, without ever checking whether the specific street they're considering carries a different limit.

The catch nobody puts in the headline

The DPA cannot be used with just any mortgage.

It must be paired with an NJHMFA first mortgage — a 30-year fixed-rate government-insured loan (FHA, VA, or USDA) originated through an NJHMFA participating lender. There's also an HFA Advantage option, which is a 30-year fixed conventional loan that can be combined with the DPA.

This is where buyers lose the money. You get pre-approved with a lender who doesn't participate in NJHMFA, you find a house, you go under contract — and only then does someone mention the program. Switching lenders mid-transaction is possible but painful, and in a competitive situation it can cost you the house.

Confirm your lender is an NJHMFA participating lender before you get pre-approved, not after. NJHMFA will match you with up to three participating lenders in your area through their request form, or you can call 1-800-NJHOUSE.

What this looks like on a real South Jersey purchase

The reason this program works better in our market than almost anywhere else in the state is straightforward: our prices are low enough that $17,000–$22,000 is a meaningful percentage of the purchase.

On an FHA loan at 3.5% down, a $300,000 house requires $10,500 down. If your assistance exceeds your required down payment, the surplus rolls to closing costs — title, appraisal, origination. For a lot of South Jersey buyers, this program is the difference between bringing $15,000 to the table and bringing almost nothing.

South Jersey market snapshot: June–July 2026

Four mistakes that cost people the money

Getting pre-approved with a non-participating lender. Covered above. It's the most common and the most expensive.

Assuming you're over the income limit without checking. Limits are by household size and by area, and UTA properties carry higher ceilings. Check the actual number for your actual address.

Not knowing you're first-generation eligible. If your parents rent, or you were in foster care in New Jersey, that's another $7,000 — and nobody will ask you about it unprompted.

Waiting until you find a house. Program approval and the required homebuyer education course take time. Start the mortgage side before you start touring.

How to start

1. Confirm eligibility roughly. First-time buyer status, household income, target price range.
2. Check your target areas in the Site Evaluator to see whether UTA limits apply.
3. Get matched with a participating lender through NJHMFA's request form or by calling 1-800-NJHOUSE.
4. Complete the required homebuyer education course. Online, self-paced.
5. Get fully pre-approved with the DPA attached before touring homes.
6. Then shop. With financing structured correctly, you're a stronger offer, not a weaker one.

Frequently asked questions

Do I have to pay the assistance back? Not if you live in the home as your primary residence for five years and don't refinance or convey the first mortgage during that period. At five years it's forgiven entirely.

What if I sell before five years? The remaining balance is repaid at closing. You never pay interest on it.

Can I use it on a condo or townhouse? Yes, provided the property meets your loan type's requirements and is your primary residence.

Does it affect my monthly payment? No. The DPA is a separate second lien at 0% with no monthly payment. Your monthly obligation is your first mortgage only.

I owned a home before. Am I disqualified? Not if it's been more than three years.

Can I combine this with other assistance? Sometimes. Certain county and municipal programs, and some nonprofit programs, can stack. Availability and funding change during the year — ask your lender what's currently open in your county.

Thinking about buying in South Jersey?

We work with first-time buyers across Camden, Burlington, Gloucester, and Atlantic Counties, and we'll tell you honestly whether this program fits your situation before you spend time on it.

BOOK A CALL →

Or start with what's actually available in your price range — set up a VIP Home Search and we'll send you listings under the NJHMFA purchase price limits in the towns you're considering.

The Agentic Agent Team · 31 Walnut Ave, Bellmawr, NJ 08031 · (856) 888-9986

Program details verified against NJHMFA published materials as of August 2026. Income limits, purchase price limits, and county award amounts are set by NJHMFA and change periodically. Confirm current figures with an NJHMFA participating lender before making financial decisions. We are not a mortgage lender and this is not lending advice.