Under a program announced Monday, applicants can receive up to $50,000 in interest-free mortgages from the state.
Community Affairs Commissioner Richard Constable says the state wants to encourage low and moderate-income people affected by last year's storm to buy if they can in communities where the storm has led to higher rents. He says the program could also stimulate the market for new and restored homes.
Those who stay in their homes for five years and meet other requirements can have the loans forgiven.
Only would-be purchasers with relatively high credit scores but incomes no more than 80 percent of the area's median can apply.
Initially, only those who live in New Jersey's nine most-affected households can apply. But after Oct. 25, anyone who meets the guidelines can apply, so long as they buy in one of the affected counties.
The $25 million program could help up to 500 homebuyers.
The funding is part of a $1.8 billion federal grant to help New Jersey recover from the storm. Other housing provisions are helping people repair damaged homes and buying out some in particularly flood-prone areas.