Unlock Homeownership in New Castle County with Settlement Assistance
The New Castle County Department of Community Services is dedicated to turning the dream of homeownership into a reality for first-time homebuyers through its Down Payment Settlement Program. This initiative is designed to provide crucial financial support in the form of a deferred payment loan, specifically aimed at easing the burden of down payment and closing/settlement costs when purchasing a new home.
Enhanced Financial Assistance for Homebuyers
The Down Payment Settlement Program offers loans ranging from a minimum of $1,000 to a maximum of $5,000. The exact amount allocated to each borrower is determined based on an assessment by a housing counselor. The loan features an 8-year term, divided into two distinct periods:
- Period 1: The initial 3 years, during which 3 percent simple interest accrues. During this deferral period, borrowers have the option to make payments.
- Period 2: The subsequent 5 years, where monthly payments become mandatory. Notably, if the loan is fully repaid within the first 3 years, all accrued interest is waived. The loan must be fully repaid if the property is sold or ownership is transferred.
Eligibility Criteria for Applicants
To qualify for the Down Payment Settlement Program, applicants must meet several requirements:
- They must be first-time homebuyers, defined as individuals who have not owned a principal residence in the past 3 years.
- A minimum contribution of $500 in cash is required from the applicants.
- The annual household income must be at or below 80 percent of the area median income for New Castle County, with adjustments made for family size as per HUD Guidelines.
- Completion of a Homeownership Education Program approved by New Castle County and HUD is mandatory.
Property Eligibility and Price Caps
Eligible properties under this program must be the buyer’s primary residence for the duration of the loan. The program includes existing residential structures or new constructions located in New Castle County, excluding the City of Wilmington. The maximum purchase price for a single dwelling structure under this program is set at $379,500.
Income Limits for Household Eligibility
The program sets specific income limits based on household size:
- 1 person household: $45,450
- 2 person household: $51,950
- 3 person household: $58,450
- 4 person household: $64,900
- 5 person household: $70,100
- 6 person household: $75,300
- 7 person household: $80,500
- 8 person household: $85,700
The Down Payment Settlement Program by the New Castle County Department of Community Services represents a significant step towards making homeownership more accessible and affordable, offering a blend of financial assistance and educational resources to empower individuals in their pursuit of owning a home.
