July 16, 2026

Lender Bulletin 2026-10

Early Payment Default Policy & Invoicing Reminder

Effected Programs: All

Attention Lenders:

As a reminder, NJHMFA’s Mortgage Purchase Agreement and the Seller’s Guide include policies regarding Early Payment Default (EPD).

EPD occurs when any of the first six (6) mortgage payments become sixty (60) calendar days or more delinquent. With Early Payment Default loans, NJHMFA may, in its sole discretion, require the Lender to repay the full premium amount of 2.75 points of the purchased Unpaid Principal Balance (UPB) plus a $2,000 EPD fee.

Police and Fire loans are subject to the $2,000 EPD penalty only and repurchase as applicable.

All loans which fail the GSE/Insurer’s EPD policy may be subject to immediate repurchase.

Common reasons for Early Payment Default include borrower financial instability due to job loss, unforeseen events including medical emergencies, intentional misrepresentation by the borrower, or insufficient loan review quality by the Lender.

NJHMFA monitors loans for EPDs to mitigate risk. If an EPD is determined, NJHMFA’s Audit Division may perform a QC review of the file to determine additional risks and/or loan quality trends which may lead to immediate repurchase by the Lender.

Additional EPD Pre and Post-Purchase requirements:

NJHMFA tracks all pre-purchase and post purchase delinquencies. If any mortgage payments made prior to purchase by the Agency, or the first mortgage payment due to the Agency is delinquent whereby the delinquency is greater than or equal to thirty (30) calendar days, the Lender shall be subject to a $2,000 first payment delinquency fee. In addition, the Lender shall be obligated to indemnify the Agency for two (2) years from all liabilities, obligations, losses, damages, penalties, fines, forfeitures, court costs, and reasonable attorneys’ fees, judgements, suits, and any other cost or fees directly or indirectly resulting from delinquency of the loan. If the Lender does not accept the indemnification obligation requirement, immediate repurchase shall be required. If a loan has not been purchased by the Agency, the loan will not be purchased without the executed indemnification.

Beginning in August 2026, Lenders will receive invoicing on a monthly basis for all purchased loans that fall into the above policy criteria for EPD or first payment delinquency.

Wiring of payments is preferred and instructions will be provided on the invoice, however, checks may also be sent for payment. 

If sending checks, please make check payable to NJHMFA and mail to:

New Jersey Housing and Mortgage Finance Agency

Attn: Single Family, Finance - EPD

637 South Clinton Avenue

Trenton, New Jersey 08611-2085

In addition to the monthly invoicing, NJHMFA will utilize net funding for any outstanding amounts due for EPDs on a quarterly basis. A Lender Bulletin will be provided with further detail prior to the effective date of the net funding process.