Homeownership Loans

A DSHA mortgage is a 30-year, fixed-rate loan with interest rates at or below the standard market rate for qualified buyers. That means you get a better deal! Our loans work through standard mortgage programs, including conventional, VA, FHA and USDA mortgages. And it doesn’t matter if you’re buying for the first time or have owned a house before.

Welcome Home:
First-Time Homebuyer Program

  • MUST be a first-time homebuyer to qualify for this program. A first-time homebuyer is someone who has not had ownership of a primary residence in the previous three years.
  • The First-Time Homebuyer Tax Credit Program cannot be used with Welcome Home Programs.
  • Minimum credit score of 620. (Applicants with credit scores of 659 or below must participate in housing counseling).
  • Maximum Sales Price:
    • New Castle County: $539,250
    • Kent & Sussex County: $481,176
  • There are 4 programs available under Welcome Home:
    • Smart Start
      • Unassisted first mortgage – No down payment or closing cost assistance.
    • Home Sweet Home Limited funding is available. Once funding is exhausted, the program will come to an end.
      • Maximum sales price of homes is $285,000.
      • $12,000 for down payment and closing costs.
      • Forgivable loan after 10 years. Each year the borrower resides in the home as a primary residence, 10% of the balance will be forgiven. Residency will be verified and confirmed each year and at the end of 10 years.
    • Delaware Diamonds – Limited funding is available. Once funding is exhausted, the program will come to an end.
      • Occupations eligible: Public and Private School employees, Hospital Employees employed by Bayhealth, Beebe, Nemours, St. Francis, The VA Hospital, and Christiana Care, First Responders, Active Military and Veterans, and State Employees (including state corporations, such as DSHA).
      • Must be actively employed for at least 6 months at time of application.
      • Verification of employment required.
      • $10,000 for down payment and closing costs.
      • Forgivable loan after 10 years. Each year the borrower resides in the home as a primary residence, 10% of the balance will be forgiven. Residency will be verified and confirmed each year and at the end of 10 years.
    • First State Home Loan
      • 3% of the final loan amount for down payment and closing costs.
      • Principal will be deferred until the following events: refinance, sale, transfer of title, property is no longer the borrower(s) primary residence (whichever comes first).

Maximum household income for eligibility is as follows:

CountyArea1 or 2 Person Households3 or More Person Households
New Castle CountyNon Targeted Areas$114,700$131,905
Targeted Areas$137,640$160,580
Kent & Sussex CountiesNon Targeted Areas$106,300$122,245
Targeted Areas$127,560$148,820

 

Home Again:
Repeat and First-Time Homebuyer Program

  • If a borrower exceeds income limits for Welcome Home, this program is an option for them.
  • Borrowers can use the First-Time Homebuyer Tax Credit Program; however Welcome Home income limits apply.
  • Minimum credit score of 620. (Applicants with credit scores of 659 or below must participate in housing counseling).
  • Maximum Sales Price:
    • New Castle County: $539,250
    • Kent & Sussex County: $481,176
  • There are 4 programs available under Home Again:
    • Smart Start
      • Unassisted first mortgage No down payment or closing costs assistance.
    • Home Sweet Home – Limited funding is available. Once funding is exhausted, the program will come to an end.
      • Maximum sales price of $285,000
      • $12,000 for down payment and closing costs assistance
      • Forgivable loan after 10 years. Each year the borrower resides in the home as a primary residence, 10% of the balance will be forgiven. Residency will be verified and confirmed each year and at the end of 10 years.
    • Delaware Diamonds – Limited funding is available. Once funding is exhausted, the program will come to an end.
      •  Occupations eligible: Public and Private School employees, Hospital Employees employed by Bayhealth, Beebe, Nemours, St. Francis, The VA Hospital, and Christiana Care, First Responders, Active Military and Veterans, and State Employees (including state corporations, such as DSHA).
      • Must be actively employed for at least 6 months at time of application.
      • Verification of employment required.
      • $10,000 for down payment and closing costs.
      • Forgivable loan after 10 years. Each year the borrower resides in the home as a primary residence, 10% of the balance will be forgiven. Residency will be verified and confirmed each year and at the end of 10 years.
    • First State Home Loan
        • 3% of the final loan amount for down payment and closing costs.
        • Principal will be deferred until the following events: refinance, sale, transfer of title, property is no longer the borrower(s) primary residence (whichever comes first).

Eligibility

  • Maximum household income must be at or below the following limits:
County1 or 2 Person Households3 or More Person Households
New Castle County$137,640$172,050
Kent & Sussex Counties$127,560$159,450
  • Minimum credit score of 620. (Applicants with credit scores of 659 or below must participate in housing counseling).
  • Maximum Sales Price:
    • New Castle County: $539,250
    • Kent & Sussex County: $481,176

For First-Time Homebuyers Tax Credit

Delaware 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 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. Just apply through one of our participating lenders.

Here’s how it works. If you borrow $265,000 at a 6.00% interest rate, you will pay about $15,81.48 in mortgage interest in the first year. With the tax credit, you can reduce your federal income tax liability by $2,000 for the year.

See below for eligibility requirements, additional property qualifications and targeted areas for the Delaware First-Time Homebuyer Tax Credit.

If you are a first-time homebuyer, when you reach out to a participating lender, let them know you are interested in using DSHA’s homeownership programs and taking advantage of the First-Time Homebuyer Tax Credit. You must use a DSHA participating lender in order to take advantage of the tax credit.

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 their 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.

Maximum household income for eligibility is as follows:

CountyArea1 or 2 Person Households3 or More Person Households
New Castle CountyNon Targeted Areas$114,700$131,905
Targeted Areas$137,640$160,580
Kent & Sussex CountiesNon Targeted Areas$106,300$122,245
Targeted Areas$127,560$148,820

Property Qualifications for Delaware First-Time Homebuyer Tax Credit

To qualify for the Delaware First-Time Homebuyer Tax Credit, a property’s purchase price cannot exceed the below limits for each county.

County1 Unit2 Unit3 Unit4 Unit
New Castle$539,250$690,321$834,461$1,037,011
Kent$481,176$616,111$744,679$925,491
Sussex$481,176$616,111$744,679$925,491

Targeted Areas
Income limits and purchase price limits are higher for homes purchased in targeted areas. The first-time homebuyer requirement is also waived, allowing repeat buyers who purchase a primary residence in a targeted area to apply for the Delaware First-Time Homebuyer Tax Credit. Check if the property you want to purchase is located in a targeted area here.

  • Targeted areas include the following Census Tracts:
    • New Castle County:
      0006.12 0019.02 0021.00
      0023.00 0029.00 0030.02
    • Kent County:
      0425.00
    • Sussex County:
      0505.03                  0507.11

Homebuyers who meet the above requirements can apply for the First-Time Homebuyer Tax Credit by contacting a participating lender.
LENDERs