This bulletin is to inform lenders that NJHMFA’s Down Payment Assistance Program (DPA), the Smart Start DPA, is permitted to be used only to cover the buyer’s down payment and/or closing costs, escrows, and prepaid items typically covered by the buyer for real estate transactions in New Jersey. If there are remaining funds, the borrower can make a larger down payment or a principal reduction may be applied at closing. Limited cash back funds may be provided to borrowers at closing, strictly to reimburse the borrower for eligible closing costs or Earnest Money Deposit (EMD) paid by the borrower prior to closing. See Chapter 9 of the Guide for more detail regarding cash back at closing.