NJ First-Time Home Buyers


The End of NJ First Time Buyer Mortgages for Buyers Below 620 FICO Scores

The End of NJ First Time Home Buyer Mortgages for Buyers Below 620 FICO Scores

by Steve Kappre, NJ Loan Officer

It was a nice run while it lasted, and over the last 6-12 months we were effectively able to put quite a few NJ first time home buyers into homes. As of March 15, 2010, NJ HMFA (Smart Start, Tax Prefund, and other options) will not allow a borrower to have a middle credit score below 620.

Credit Scores below 620Another tightening of guidelines will no longer allow buyers to use alternative credit and have no credit score. In the past, a lender could fund such a loan by placing 4 trade-lines that were not already on a credit report (i.e. cell phone bill, auto insurance, gym membership). Now if this is done and there still is no credit score, the loan can not be approved per NJ HMFA guidelines.

It is another blow in the world of mortgage financing.

There ARE some good buyers out there that have credit scores slightly below 620 that would make solid home owners. It is unfortunate that these guidelines restrict otherwise solid home owners. But the line has to be drawn somewhere. This makes the knowledge and understanding of credit scores and reports more important than ever!

With the end of NJ first time home buyer programs for buyers with credit scores below 620, it is more important than ever to work with a highly qualified, local mortgage loan officer. If your credit is marginal or below 620, call today for advice on how to raise your score to qualify for the Smart Start, Tax Prefund, or other HMFA program.


Credit Links

Credit Scoring - What Makes Up My Credit Score? (1 of 6)

Credit Scoring - Payment History (2 of 6)

Credit Scoring - Balances (3 of 6)

Credit Scoring - History (4 of 6)

Credit Scoring - Mix of Accounts (5 of 6)

Credit Scoring - Inquiries (6 of 6)


Steve Kappre is a mortgage loan officer in New Jersey. For more info or questions feel free to contact Steve.

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Comment balloon 3 commentsStephen Kappre • March 13 2010 09:16AM


Thanks for updte.  We learn a lot from Active Rain blogs.  Best Regards,

Posted by Edward & Celia Maddox, EXPERIENCE & INTEGRITY - WE TAKE THE HIGH ROAD (The Celtic Connection Realty) almost 10 years ago

Steve I know it is better for both our businesses in the short term when more people can get loans but in the long term there are plenty of people that have gotten loans with marginal scores that should not be home owners.

Posted by Bill Gassett, Metrowest Massachusetts Real Estate (RE/MAX Executive Realty) almost 10 years ago

Bill - There has to be a line. I agree. But I've had some pretty solid borrowers: LONG work history at current job, decent assets, etc. that just didn't understand credit scoring. I have buyers right now that got bumped out of this program that now need to work on their credit and may miss the tax credit. This works directly against the purpose of the credit - to get first time buyers to buy homes.

Posted by Stephen Kappre, Helping You Home (KW Hometown) almost 10 years ago

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