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NJ Police & Firemen: Take Advantage of this Excellent Mortgage Program

New Jersey police officers and firefighters who are buying a home can take advantage of an excellent mortgage program through the Police and Firemen’s Retirement System Mortgage Program. The current rate is only 2.83% (compared to a conventional 30-year mortgage today at 6.699%) so we encourage any first responder who’s on the market for a new primary residence to take advantage of this program, which offers highly favorable mortgage interest rates compared to conventional mortgages for the rest of the borrowing public.

Who qualifies?
The mortgages are available to any currently employed member of a New Jersey police, fire, or EMT department who:

  • Is a member of the Police and Firemen’s Retirement System
  • Has a minimum of one year of creditable service
  • Has paid into the pension for at least one year
  • Is buying an owner-occupied house or condo (no investment property or homes larger than a two-family)

The program is backed by the Police and Firemen’s Pension Program, underwritten through the State of New Jersey Housing & Mortgage Finance Agency (NJHMFA), and is administered through private lenders.

Low rate for qualified first responders to buy or refinance
This mortgage program offers police, fire, and EMT personnel very favorable rates that are set twice a year. The rate, which is set at only 1% over the 10-year Treasury bill index, is adjusted twice a year; the next reset will be on August 15. It is less than half of a conventional 30-year fixed rate today and will remain much lower than any prevailing rate available in today’s market for the foreseeable future.

As with any conventional mortgage program, applicants must qualify for the preferential mortgage rate. According to Jeff Greenberg, vice president of mortgage lending at Guaranteed Rate, a participating NJHMFA lender:

  • You must have a credit score of at least 620
  • You may put down as little as 3%, although Greenberg said that a 5% down payment is more realistic.
  • Household income cannot exceed 140% of the yearly median income for your county.

Regarding the last point, Greenberg said that “Some two-income families in New Jersey earn above the threshold, so this program is not for everyone. However, we encourage first responders who are buying a primary residence to consider it because of the great rate and flexibility. It is an excellent loan program for younger, first-time buyers.”

Greenberg added that although many lenders do not include refinancing in the police and firemen’s mortgage program, Guaranteed Rate is extending that ability to first responders who qualify, under certain circumstances.

What to be aware of
-If the homeowner leaves the force (by quitting or termination), he or she must pay off the loan in full because they no longer qualify for the preferential rate. In these cases, the homeowner usually refinances with another lender to pay off the Police and Firemen’s mortgage.

-Retirees with an existing loan may continue to pay it down according to their established schedule without penalty, but they may not apply for a new loan under the program.

-Borrowers will see a $35 monthly service fee as a line item on the monthly statement. This service fee is usually worked into the rate of a conventional mortgage instead of showing up as an extra charge due to the way the program is administered.

-Borrowers pay a loan origination fee $1825; $1500 goes to the lender and $325 to the state.

Beat the rate adjustment if you’re on the market for a home
If you are a member of a New Jersey police, fire, or emergency services department, have at least one year of service, and have paid into the pension program for at least one year, we encourage you to apply for this mortgage program. Although the rate is going up in mid-August (by 1-1.5%), it will still be considerably lower than the current conventional rate at this time. You can contact Jeff Greenberg with questions at or 973-939-8667, or apply here.

As always, the team at Cedarcrest Realty is here to help you find the perfect home in the area you want, within your budget. We are specialists in Essex and Passaic counties and work with buyers and sellers throughout northern NJ. Come into our Caldwell or Little Falls office, or call us at 973-228-1050 to start your home buying journey.