New Jersey HomeSeeker Program - $16,000 for First Time Home Buyer

[Sunny Burns]

This is an amazing program for first time home buyers. This State run program will essentially give you $16,000 at closing to use towards your down payment and closing costs. 

The house in question must be a 1-4 Family home, and be located in Essex, Passaic, Union, Atlantic, Camden, or Gloucester County.

Restrictions on Applicants

• Must be First Time Home Buyer (Not have owned a home in 3-years)
• Must have a minimum credit score of 620
• Excluding Retirement Funds(IRA & 401k) applicant must not have more than 20% of loan amount in liquid funds
• Maximum Income Limit of $127,000-$135,000 depending on county
• Must live in the property and stay for a full 5 years!
• For a Single Family Property can be no more than $437,000, 2-4 units are up to $559,000

Mortgage Restrictions if using HomeSeeker Program

• Must use one of 3 Mortgage Options
• FHA Mortgage: Requiring 3.5% down
• VA Mortgage: Requiring 0% down (Military only)
• USDA Mortgage: 0% (Rural Areas)
• You cannot use conventional financing
• The FHA interest Rate through HomeSeeker is lower(3.875%) than regular FHA(4.125%) interest rate

What this means!

-If going FHA, and only putting 3.5% down, you can essentially buy a $457,000 house and not have to pay any down-payment! Of course, if you want to pay nothing out of pocket at all for the house you probably only want to buy a $250,000($8,750) house, that way you get all your down payment and ~closing costs($7,250) covered. How awesome is that!

-If you're really smart you will use this program to buy a 4-Family House Hack, get leases for the other 3 units before closing, and they will consider 75% of the potential income as your income. Done right, you will have bought a cash-flowing property that you can live in all with no money out of pocket!

Find out more: http://www.njhousing.gov/dca/hmfa/homeownership/bu...

• If interested in a similar program that is a little less generous but works for other counties in certain areas of New Jersey look into the "Smart Start" program.
• Received a lot of this information from Ron at Cross Country Mortgage in Montvale, NJ. Very knowledgeable and helpful, give him a call.
• Thanks to @Jennifer Escobar for first bringing this program to my attention

[Amanda R.]

I had considered this program but was being outright rejected in my offers for having FHA financing...even if my offer was the highest. May be tough to secure if you're looking in highly competitive towns. If you can swing it then great! Because the state must review the application, there could be delays in receiving the funds so don't rely on having the grant in time for your down payment. Also, keep in mind that this considered income and you will have to pay taxes on it. Other than those considerations, lots of opportunity for the grant for people getting into home-buying.