NJ Police and Fire Mortgage (PFRS): How It Works in 2026

What the PFRS mortgage is

The Police and Firemen’s Retirement System lends part of its own fund to its members as home loans. The New Jersey Housing and Mortgage Finance Agency (NJHMFA) runs the program for the PFRS Board of Trustees: a participating lender takes your application and closes the loan under NJHMFA’s rules, then NJHMFA buys it and a servicer it contracts with collects the payments. The terms come from state law, N.J.S.A. 43:16A-16.9 through 16.16, and from section 3-5 of NJHMFA’s Seller’s Guide, effective October 19, 2026.

If you searched for a “PBA mortgage,” note that the PBA is the officers’ union, not a lender: the state-run loan for police officers and firefighters is this one, with money and rules from the pension system. It is also not the same as NJHMFA’s First-Time Homebuyer Mortgage: PFRS has no income limit, no purchase price limit and no first-time buyer rule, but it needs a bigger down payment and can’t carry NJHMFA’s down payment assistance.

Who can use it

From the Seller’s Guide, the PFRS forms and the statute:

• A PFRS member with at least one year of creditable service. The lender proves it with your most recent Member Benefits Online System (MBOS) statement or a current Pension Board letter.
• Employed when you apply by the State, a county, a municipality or another New Jersey public employer, in a PFRS title, and contributing to the plan. Your employer signs a verification of membership, and the employment check is good for four months.
• First-time buyers, trade-up and trade-down buyers all qualify. At least 25% of the funds go to first-time buyers.
• One PFRS loan at a time. No member can have more than one outstanding.
• No income or purchase price limits. Only the maximum loan amount applies.
• You don’t have to live in New Jersey today, but the home must be in New Jersey and become your main home.
• Retired members: the rule looks at employment on the day you apply, so a member who has already retired doesn’t meet it.

What you can buy, and the occupancy rule

• A one-family home, including a condo in a Fannie Mae-approved project, a co-op, a townhome or PUD, or a manufactured home permanently fixed to land you own.
• A two-family home, on a single tax lot, ready to move into.
• An existing or newly built home. The program does not provide construction financing; for new construction the reservation runs 270 days instead of 180.
• You move in within 120 days of closing and live there for the life of the loan. If you sell or stop living there as your main home, the full balance plus interest is due on the 120th day after.
• The loan can’t be assumed by a buyer. On the member’s death it can pass to a surviving spouse who is the sole heir.

The loan terms, from the October 2026 Seller’s Guide

The $832,750 figure is the 2026 one-unit limit in FHFA’s 2026 announcement. Whether the higher two-unit figure applies to a two-family home is not stated in the guide; ask the lender.

How the PFRS mortgage rate is set

This is the part most people search for, and the part most pages get vague about. The lender doesn’t pick the PFRS rate. State law sets the formula and NJHMFA applies it:

1. The base: the weekly average yield on 10-year U.S. Treasury securities at constant maturity, as published by the Federal Reserve. You can see that series yourself in the Fed’s H.15 Selected Interest Rates release.
2. Plus 1%. That margin is in the statute (P.L.2001, c.293, which replaced the older one-year Treasury plus 2% formula).
3. Reset twice a year, on February 15 and August 15.
4. Locked when the loan is reserved: 180 days for an existing home, 270 days for new construction. An extension costs $250 per 30 days.
5. Fixed for the life of the loan once you close.

NJHMFA publishes the current PFRS rate in its Lender Portal, which only lenders can open. To hear today’s figure, ask a PFRS participating lender or call NJHMFA at 1-800-NJ-HOUSE. This page doesn’t print it: it changes every six months, and the only rate that matters is the one in force on the day your loan is reserved.

Two things that move your real cost besides the rate: the $30 monthly servicing fee (added to the payment, not to the rate) and mortgage insurance if you put down less than 20%. A Loan Estimate on the PFRS loan next to one on a regular conventional loan shows which costs less for your file.

Fees

• $1,500 flat fee to the lender, in addition to the lender’s standard fee. Up to half can be collected at application; that part is non-refundable unless the loan is denied for credit or property reasons.
• $325 NJHMFA fee at closing.
• $30 a month servicing fee, collected with your payment. NJHMFA may review it in the 61st month and every year after.
• Rate-lock extension: $250 per 30 days.
• Normal closing costs, prepaid items and escrows for taxes and insurance.

Older numbers you may still see

The PFRS cap moves every year with Fannie Mae’s limit, and several pages haven’t caught up:

• $766,550 is the 2024 limit. NJHMFA’s own program list page still shows it (checked October 24, 2026).
• $806,500 is the 2025 limit.
• $832,750 is the 2026 limit, and the Seller’s Guide ties the PFRS maximum to it.

The fact sheet dated 10.30.25 describes the lender fee as “a fee of $1,500 to the mortgage lender.” The newer Seller’s Guide says the $1,500 is in addition to the lender’s standard fee, so ask for both on your Loan Estimate.

Down payment help and second loans

NJHMFA’s down payment assistance, including the first-generation supplement, can’t be combined with PFRS. Other second loans are allowed on a purchase under Fannie Mae rules, as long as they sit behind the PFRS mortgage. If you need more than 85% financing and want NJHMFA’s assistance, the First-Time Homebuyer loan is the one built for that.

The tax notice you’ll sign

Because the money comes from a pension fund, you sign form PFRS-006 when you apply. It says the State Treasurer relies on a tax-counsel opinion that it is reasonable to treat these loans as not taxable, but that IRS employees have said informally the loans could be premature distributions under Internal Revenue Code section 72(p). If that view were applied, you could owe income tax and penalties on the loan amount. Ask a tax adviser before you rely on either reading.

How to apply, step by step

1. Pull your MBOS statement to show at least one year of creditable service.
2. Talk to a PFRS participating lender and get pre-approved. Ask for the current PFRS rate and both fees in writing.
3. Sign the contract on a home that fits the loan cap and the 15% down rule; in New Jersey that starts the attorney review period.
4. The lender reserves your loan with NJHMFA, which locks the rate, and you sign the PFRS-006 tax notice and the PFRS-007 disclosure with your Loan Estimate.
5. Your employer verifies membership on form PFRS-005, and the lender underwrites the file through Fannie Mae’s Desktop Underwriter.
6. Close and move in within 120 days. At closing you sign the PFRS mortgage rider, the non-assignability notice and the applicant certification.

Documents NJHMFA’s PFRS checklist (revised 10/2026) asks the lender to collect from you:

• Pay stubs for the most recent 30 days and a written verification of employment
• Your MBOS statement or a Pension Board letter
• Tax returns when they apply, and bank or asset statements for the most recent 60 days
• The paper trail for your earnest money, and a gift letter if family is helping
• The fully signed contract of sale and the homeowners insurance declarations page
• Divorce or child-support papers, if they apply to you

Who lends it

NJHMFA lists its PFRS lenders in order of loans sold to the agency in the previous six months and updates the list every quarter. On the list updated October 1, 2026:

Jimmy Joseph is a loan officer with CMG Mortgage, Inc., dba CMG Home Loans. Whoever you talk to, these questions sort out the lenders who close PFRS loans often:

1. Are you on NJHMFA’s current PFRS lender list?
2. What is the PFRS rate in force today, and when does it reset?
3. What is your standard lender fee on top of the $1,500 PFRS fee?
4. Will my down payment reach 15%, and will I need mortgage insurance?
5. Can I see a PFRS Loan Estimate next to a regular conventional one?

Frequently asked questions

Related guides

• NJHMFA First-Time Homebuyer Mortgage→The FHA, VA or USDA loan that carries NJHMFA's down payment assistance.
• NJHMFA Down Payment Assistance→The $10,000 or $15,000 second loan, and why it can't sit on PFRS.
• Teacher Mortgages in NJ→Home loan options for New Jersey teachers and school staff.
• Military and Veteran Home Loans NJ→VA loans and New Jersey benefits for service members and veterans.

Sources

• NJHMFA, Mortgage Program Policy and Procedures for Participating Lenders (Seller's Guide), effective October 19, 2026: section 3-5, PFRS Mortgage Loan Program
• NJHMFA, Police and Firemen's Retirement System Mortgage Program fact sheet, updated 10.30.25
• NJHMFA, Participating Lender List, updated October 1, 2026: PFRS section
• P.L.2001, c.293, amending N.J.S.A. 43:16A-16.11 (PFRS mortgage rate and terms), New Jersey State Library
• NJHMFA, PFRS-007 Statutory Requirements Disclosure (occupancy, sale, servicing fee)
• NJHMFA, PFRS-002 Mortgage Rider
• NJHMFA, PFRS-006 Notice of Potential Tax Consequences
• NJHMFA, Lender Submission Checklist, PFRS, revised 10/2026
• New Jersey Division of Pensions and Benefits, PFRS Mortgage Loan Program
• NJHMFA, Homebuyer FAQs
• Federal Housing Finance Agency, conforming loan limit values for 2026 (November 25, 2025)
• Federal Reserve, Selected Interest Rates (H.15): 10-year Treasury constant maturity
• Consumer Financial Protection Bureau, What is a Loan Estimate?

Equal Housing Opportunity. Jimmy Joseph, MBA is a loan officer, NMLS #1577754, with CMG Mortgage, Inc., dba CMG Home Loans, NMLS #1820. The PFRS Mortgage Loan Program is funded by the Police and Firemen’s Retirement System, administered by the New Jersey Housing and Mortgage Finance Agency, subject to funding set by the PFRS Board of Trustees, and its rules can change without notice; confirm current rules when you apply. This page is information, not a commitment to lend, and does not quote rates. Tax questions belong with a tax adviser.