May 29, 2025

Lender Bulletin 2025-10

Seller's Guide Update Notice

Updates to Policies and Procedures for Participating Lenders

Effective Programs: All Programs

Effective Date: Reservations on or after July 1, 2025

Attention Lenders:

This bulletin provides details to updates made to the NJHMFA Mortgage Program Policies and Procedures for Participating Lenders (“Seller’s Guide”). The updated Seller’s Guide is available to review on the Agency’s website. The updates to the Seller’s Guide will take effect for new reservations on July 1, 2025, and will apply to all loans reserved with NJHMFA on or after this date, unless noted otherwise below.

Loans reserved prior to July 1, 2025 will be reviewed in accordance with the version of the Seller’s Guide dated February 5, 2025. This retired version will remain available on the Agency’s website for use with pipeline loans reserved prior to July 1, 2025.

The following highlights key changes that impact Participating Lenders. For the full list of changes, see the Introduction Section of the Guide. 

• Credit Score and Debt to Income Ratio (“DTI”): Borrowers with credit scores between 620 and 659 will be capped at a 45% DTI ratio under the First-Time Homebuyer, Homeward Bound, and HFA Advantage programs. The PFRS program remains unchanged at 36/45.

• Down Payment Assistance Allowable Expenses: It is now permissible to utilize Down Payment Assistance to pay buyer real estate commissions, up to the lesser of 1.5% of the sales price or the amount specified on the Buyer/Agency Agreement.



• First Generation Down Payment Assistance: Gifts of equity and non-arm’s length transaction will be excluded from eligibility to focus assistance to those with no intergenerational wealth from family-owned property.

• Homeward Bound Program Income Limits: The Homeward Bound Program income limits will apply even when Down Payment Assistance is not used. This change better aligns with the Agency’s mission of serving low-to-moderate income borrowers.

• Tradelines: Credit accounts that have been closed within the past year may now be included in the count of tradelines. This is a revision from the prior requirement that accounts must be open or have been closed within the past six months.

• MISMO File Upload: Fannie Mae DU or MISMO XML files must be uploaded at the time of initial Underwriting submission for all loans. Loans not submitted with Fannie Mae DU or MISMO XML will not move forward in the process and will be moved to “submission incomplete” status. Note that this change is effective for all initial underwriting submissions on or after July 1, 2025, not just new reservations as of this date.

• Seasoned Loans: A Seasoned Loan is a closed loan that is being serviced by the originating Lender and has had three or more payments due. See Guide for applicable fees and eligibility.

• GSE / Insurer Exceptions or Indemnifications: Participating Lender must notify the Agency of any loan level exception waiver or indemnification received from a GSE/Insurer, to be reviewed for possible allowance from the Agency.

• Return To Work: Added language to specify that NJHMFA Return-To-Work guidelines apply whether returning to an existing employer or starting with a new employer.



• PFRS MBOS Requirements: Added language to reinforce the requirement that the MBOS provided prior to closing must already show 12 months of creditable service. It is not acceptable for the MBOS to show fewer months with an assumption that by closing the borrower will have reached 12 months.

Loans reserved prior to July 1, 2025 that need additional flexibility offered under the updated Seller’s Guide in order to qualify should not re-reserve loans for qualification purposes. Lenders may escalate to NJHMFA Single Family leadership via email to SFLenders@njhmfa.gov for possible loan level allowance to use the new guidelines.

All loans must meet all underlying GSE/Insurer requirements.

A summary of the full list of new changes for 2025 can be accessed directly here.

The updated version of the 2025 Seller’s Guide is available under our Lender’s Resource Tab or directly here.

Lenders may view the updated Seller’s Guide by accessing the NJHMFA website under Lender Resource Site and Lender Policy and Procedures. (Seller’s Guide).