First-Time Home Buyer Programs in Union County & NJ (2026)

If you're comparing first-time home buyer programs in NJ for 2026, start with the New Jersey Housing and Mortgage Finance Agency (NJHMFA). Its statewide Down Payment Assistance Program provides up to $15,000 toward your down payment and closing costs as an interest-free, five-year forgivable second loan with no monthly payment. First-generation buyers can add another $7,000, for a total of $22,000 in Union and Middlesex counties. The catch: the assistance must be paired with an NJHMFA first mortgage from a participating lender. For step-by-step, bilingual guidance, see first-time home buyer help in Rahway and Union County.

Most of my sales are in Rahway and nearby Union and Middlesex County towns, so the figures below focus on those two counties, and each one links to its official source.

First-time home buyer programs in NJ for 2026: the DPA basics

The Down Payment Assistance (DPA) amount depends on the home's county. Per NJHMFA's First-Time Homebuyer fact sheet (updated 06.17.26):

• $15,000 in Bergen, Essex, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset and Union counties, which puts homes in Rahway (Union County) and throughout Middlesex County in the higher tier.
• $10,000 in Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Salem, Sussex and Warren counties.

How forgiveness works

The loan is forgiven if you live in the home continuously as your principal residence for five years from the closing date and don't refinance or otherwise convey the first mortgage. You must move in within 60 days of closing, and you can use the DPA only once. Under NJHMFA's lender guide, if you sell, refinance or stop living in the home as your principal residence before then, the unforgiven balance is due from your net equity proceeds.

What DPA can't pay for

DPA funds may not cover closing costs customarily paid by the seller, or an appraisal shortfall (when a home appraises for less than the purchase price).

First-Generation Down Payment Assistance: up to $22,000

NJHMFA's First Generation Down Payment Assistance Program adds $7,000 on top of the regular DPA, for a total of $17,000 to $22,000 depending on county ($22,000 in Union and Middlesex). It works the same way: interest-free, forgivable after five years, no monthly payment, and paired with an NJHMFA first mortgage.

Per the First Generation Homebuyer fact sheet (also available in Spanish), you qualify if you're a first-time homebuyer and either:

• your parents or legal guardians have no present ownership interest in residential property in the U.S. or abroad, and your spouse or domestic partner and every household member have had no ownership interest in a principal residence in the three years before purchase; or
• you have at any time been placed in foster care in New Jersey.

NJHMFA's lender guide (effective July 1, 2025) words the definition slightly differently and also includes individuals who were emancipated youth or were designated homeless, unaccompanied youth under the federal McKinney-Vento Act, so confirm your eligibility with a participating lender.

Who counts as a first-time homebuyer?

NJHMFA defines a first-time homebuyer as someone who has not had an ownership interest in their primary residence during the previous three years.

There are exceptions. Under the First-Time Homebuyer Mortgage Program, buyers purchasing in an Urban Target Area (UTA), and Qualified Veterans, don't need to be first-time buyers, though they can't own another primary residence at closing. And per NJHMFA's Homebuyer FAQs, you don't have to be a New Jersey resident to apply; the home must be in New Jersey and be your principal residence.

NJHMFA first mortgage programs

The DPA can be paired with the First-Time Homebuyer, Homeward Bound or HFA Advantage loans below. It can't be used with the PFRS program.

First-Time Homebuyer (FTHB) Mortgage Program

A 30-year, fixed-rate, government-insured loan (FHA, VA or USDA). Eligible homes: single-family houses, condominiums, townhomes, and manufactured or mobile homes permanently affixed to land you own. Two- to four-family homes qualify if you occupy one unit as your principal residence.

Homeward Bound Mortgage Program

Also a 30-year, fixed-rate, government-insured loan for buyers who meet the first-time definition. The Homeward Bound fact sheet notes that "FHA requires 3.5% downpayment. VA, and USDA may allow for no downpayment."

HFA Advantage Mortgage Program

A 30-year, fixed-rate conventional loan with "affordable mortgage insurance and low down-payment." Per the HFA Advantage fact sheet, down payment requirements follow Freddie Mac's HFA Advantage guide, which "typically allow for a 3% downpayment," and you'll need a FICO score of 620 or higher. The first-time buyer requirement is waived if you don't use the DPA, and lower-cost mortgage insurance may be available at incomes at or below $101,920 in both counties.

PFRS Mortgage Program (not combinable with DPA)

For active members of the NJ Police and Firemen's Retirement System with at least one year of creditable service. NJHMFA describes a 30-year fixed-rate loan with rates set twice a year, in February and August, and its FAQs say there are no income or purchase-price limits, though there is a maximum mortgage amount. The PFRS fact sheet (updated 10.30.25) ties that maximum to Fannie Mae's limit (excluding high-balance and jumbo loans), caps loan-to-value at 85%, covers one- or two-family homes and condominiums, and states that NJHMFA's DPA program cannot be used with PFRS.

2026 income and price limits: Union and Middlesex counties

NJHMFA limits effective 06.17.26:

Sources: NJHMFA fact sheets above and HUD's FHA Mortgage Limits lookup (FHA Forward, CY2026). The FHA figure is a maximum mortgage amount, not a price cap; NJHMFA notes FHA and VA maximum mortgage amounts prevail if more restrictive.

Is your address in an Urban Target Area?

UTA addresses qualify for higher limits. In Union County, the FTHB fact sheet lists Elizabeth, Hillside, Linden and Plainfield; in Middlesex County, it lists Cranbury, New Brunswick, North Brunswick, Old Bridge, Perth Amboy and South Amboy. Rahway is not on the list. NJHMFA cautions that "Entire municipalities may not be a designated Urban Target Area," so check the exact address with NJHMFA's advisory Site Evaluator map or a participating lender.

How to apply, step by step

1. Read the guide. NJHMFA encourages buyers to review The Road Home New Jersey: A Guide for the New Jersey Homebuyer, available in English and Spanish on its Find a Lender page, before contacting a lender.
2. Find a participating lender. NJHMFA's Lender Request Form pairs you with up to three lenders in your area, and a printable list of participating lenders is posted too.
3. Complete homebuyer education. NJHMFA's homebuying roadmap states that it "requires homebuyers attend an education course conducted by a HUD-approved counseling agency." NJHMFA says free pre-purchase counseling and homebuyer education for first-time buyers, one-on-one and in group workshops, is slated to launch in October 2026. To reach a HUD-approved housing counselor, HUD lists (800) 569-4287.
4. Gather your documents. The same roadmap lists NJHMFA-required documentation, including three years of signed federal tax returns or tax transcripts, 30 days of pay stubs, two years of W-2s and two months of bank statements.
5. Set your budget. Try our mortgage calculator, then browse homes for sale near Rahway within your program's limits.

Fine print to know before you commit

NJHMFA's lender guide (effective July 1, 2025) adds several DPA terms:

• The minimum credit score is 620, and with a score below 660, your debt-to-income ratio may not exceed 45%.
• If your liquid assets exceed 20% of the sales price, you're not eligible for DPA. Gift funds count as liquid assets; 401(k)s, IRAs and 529 plans don't. Per NJHMFA Lender Bulletin 2026-2 (February 11, 2026), a buyer who fails this asset test can't reapply for either DPA program for six months, regardless of lender.
• The standard DPA doesn't permit gifts of equity over 3% of the sales price. The First-Generation DPA doesn't permit gifts of equity at all, and the guide prohibits transactions between family members under that program.
• Every occupying borrower must complete housing counseling through a HUD-approved agency, with the certificate issued less than a year before closing. HFA Advantage borrowers may complete Freddie Mac CreditSmart Homebuyer U instead.

Also from the Homebuyer FAQs: NJHMFA isn't offering refinance transactions at this time. And under the FTHB Program, federal Recapture Rules require a portion of the gain on a sale in the first nine years to be recaptured by the U.S. Treasury if both the property value and your income have increased significantly. Ask a tax professional how that could apply to you. NJHMFA's hotline is 1-800-NJ-HOUSE (654-6873).

You don't have to sort through this alone. I work with buyers in English and Spanish across Rahway and Union and Middlesex counties. Reach out to Angela to talk through your home search, your timeline and how the buying process works.

For general education only; not legal, tax or financial advice. Program terms and limits change; confirm current details with NJHMFA and a participating lender, and consult a qualified professional. Figures reflect sources available as of September 29, 2026.

Frequently asked questions