NJ First-Time Home Buyer Requirements 2025
Complete eligibility checklist for New Jersey first-time buyers. Credit score, income limits, down payment, education requirements, and documents needed.
NMLS 1577754 • Licensed in NJ, NY, PA, CT, MD, OH, GA
Who Qualifies as a First-Time Home Buyer?
The official definition in New Jersey
3-Year No-Ownership Rule
You qualify as a first-time buyer if you, your spouse, or any co-borrower have NOT owned a home (primary residence, second home, or investment property) in the past 3 years.
You Still Qualify Even If:
- You owned a home MORE than 3 years ago
- You inherited a property but never lived in it as primary residence
- Your parents own a home (as long as you're not on the deed)
- You're a single parent who previously owned with ex-spouse 3+ years ago
Credit Score Requirements by Loan Type
FHA Loans
Most popular for first-time buyers. Lower credit requirements and seller can pay up to 6% closing costs.
Conventional Loans
PMI can be removed at 20% equity. Lower rates than FHA for buyers with good credit.
VA Loans
For veterans and active duty military. 0% down, no PMI, competitive rates.
NJHMFA Programs
State programs with down payment assistance. Higher credit requirements for best terms.
Income & Employment Requirements
What lenders look for in your income and job history
General Requirements (All Loans)
- 2 years employment history - same field or industry
- Stable income - verifiable and likely to continue
- Debt-to-income ratio 43% or less (50% max some programs)
- No income limits for FHA, VA, Conventional loans
NJHMFA Income Limits
- Varies by county & household size
- Bergen County limits are higher due to cost of living
- Includes all household income (borrowers + co-borrowers)
Example Bergen County Limits:
1-2 person household: ~$154,000
3+ person household: ~$177,000
(Limits updated annually by NJHMFA)
Down Payment Options
VA Loans & USDA Loans
VA: Veterans, active duty, eligible spouses. USDA: Eligible rural/suburban areas in NJ.
Benefits: No down payment, no PMI (VA only pays 2.15% funding fee)
Conventional 97 Loans
Fannie Mae HomeReady & Freddie Mac Home Possible programs.
Benefits: PMI removable at 20% equity, lower rates than FHA for good credit
FHA Loans
Most popular for first-time buyers. Credit score 580+, gift funds allowed.
Benefits: Low credit requirements, seller can pay up to 6% closing costs
NJHMFA Down Payment Assistance
Up to $15,000 forgivable (forgiven after 5 years) + $7,000 first-generation program.
Requirements: Complete homebuyer education, meet income limits, NJHMFA mortgage
Homebuyer Education Requirements
When you need to complete a homebuyer course
NJHMFA Programs (Required)
If using NJHMFA down payment assistance, you MUST complete an approved 8-hour homebuyer education course.
Course Covers:
- • Budgeting and credit management
- • Mortgage options and loan process
- • Home inspection and appraisal
- • Closing process and homeownership
Cost: $75-$125 • Format: Online or in-person
Other Loans (Recommended, Not Required)
FHA, VA, and Conventional loans do NOT require homebuyer education, but it's highly recommended for first-time buyers.
Benefits of Taking Course:
- • Better understanding of the process
- • Learn to avoid common mistakes
- • May qualify for lender discounts
- • Some grants require completion
Many lenders offer free homebuyer education webinars
Required Documentation Checklist
Documents you'll need to apply for a mortgage
Income Documentation
- 2 years federal tax returns (all pages)
- 2 years W-2 forms
- 30 days recent pay stubs
- Year-to-date profit & loss (self-employed)
Asset Documentation
- 2 months bank statements (all pages, all accounts)
- Retirement account statements (401k, IRA)
- Investment account statements
- Gift letter (if using gift funds)
Personal Identification
- Government-issued photo ID (driver's license, passport)
- Social Security card or number
- Proof of residency (utility bill, lease)
Additional Items
- Explanation of credit issues (if applicable)
- Divorce decree or separation agreement (if applicable)
- Homebuyer education certificate (NJHMFA programs)
Ready to Check If You Qualify?
Get pre-approved in 24 hours. We'll review your situation and help you access all available first-time buyer programs in NJ.
Jimmy Joseph MBA • NMLS 1577754 • jjoseph@cmghomeloans.com