2022 Delaware First-Time Homebuyer Assistance Programs
First-time homebuyers in Delaware can get assistance from state and local agencies when applying for a mortgage. They can provide different down payment loans and resources if you need help covering additional costs in the homebuying process. The Delaware State Housing Authority DSHA offers mortgage financing for Delaware homebuyers at or below-market interest rates. All mortgages are 30-year fixed-rate loans. Borrowers can also use DSHA’s Preferred Plus program for the down payment and closing cost help.
Delaware State Housing Authority DSHA Homeownership Loan Program
The Delaware State Housing Authority’s (DSHA) Homeownership Loan Program offers a mix of 30-year fixed-rate conventional, FHA, VA and USDA loans, all with competitive interest rates. These are available to both first-time and repeat homebuyers, and can be combined with the agency’s down payment and closing cost assistance. However, there’s no limit on the purchase price of the home. If you get a DSHA Homeownership Loan, you also might be eligible for down payment assistance from the state agency. You can get from 2% to 5% of your mortgage in the form of a 0% interest forgivable loan. These funds can be applied toward the down payment or closing costs. The loan must be repaid upon the sale, transfer, or refinance of the home, or when it is no longer the borrower’s primary residence.
Maximum household income must be at or below the following limits:
- New Castle County. 1-2 people: $113,400.00. 3 or more people: $141,750.00.
- Kent & Sussex County. 1-2 people: $99,600.00. 3 or more people: $124,500.00.
- Minimum credit score of 620.
- Maximum loan amount is $417,000.00. There is no purchase price limit.
Delaware State Housing Authority DSHA Preferred Plus
In addition to our homeownership loan programs, DSHA also has down payment and closing cost assistance available for homebuyers through the Delaware State Housing Authority DSHA Preferred Plus. This program offers homebuyers a no-interest second mortgage in the amount of 2-5 % of their overall loan amount. It needs to be repaid when you move out, sell your home, refinance your first mortgage or when the home otherwise isn’t your primary residence any more. To qualify for Preferred Plus, you must meet all requirements for a Homeownership Loan, mentioned above.
Delaware State Housing Authority DSHA First-Time Homebuyer Tax Credit
Delaware also has a special tax credit for first-time homebuyers that can help make your home more affordable. You can claim part of the annual interest paid on your mortgage (35% of the interest) as a special federal tax credit, up to $2,000.00 a year. The credit simply reduces your federal tax owed – a dollar-for-dollar savings! And you can use the tax credit along with our down payment and closing cost program.
Eligibility Requirements for the First-Time Homebuyer Tax Credit:
- Buyer must purchase a home within the State of Delaware.
- Buyer(s) cannot have owned a home in the past three years as his or her primary residence unless purchasing a home in a Targeted Area or the homebuyer is utilizing the Qualified Veteran Exemption.
- Household income and the purchase price must not exceed the maximum limits set by the Program.
- Buyer must occupy the home as his or her primary residence.
- Buyer must complete all tax credit documents at time of closing.