How We Can Help

So you want to buy a home – that’s great! Last year, 1,534 Delaware families just like yours used the programs at Delaware State Housing Authority to buy a home. We have options for first-time and repeat homebuyers alike so if you’re just starting on your homeownership journey or if your family has recently expanded and you need a bigger house – we can help!

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).
  • Note: Welcome Home Loan Program income calculation will be used for those on the Note and/or Mortgage only. Income limits are based on household size.
  • Purchase Price Limits for Single Family Homes:
    • Non-Targeted Areas 1 Unit:
      • New Castle County: $571,946
      • Kent & Sussex Counties: $510,939
    • Targeted Areas 1 Unit:
      • New Castle County: $699,045
      • Kent & Sussex Counties: $624,481
  • Programs available under Welcome Home:
    • Smart Start
      • Unassisted first mortgage – No down payment or closing cost assistance.
    • 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).
    • Diamond in the Rough
      • 5% 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).
      • Must qualify for FHA 203(k) Limited Program.
      • Note: For Welcome Home FHA 203(k) limited loans, total acquisition & rehabilitation amount may not exceed these purchase prices.

Maximum household income for eligibility is as follows:

CountyArea1 or 2 Person Households3 or More Person Households
New Castle CountyNon Targeted Areas$119,400$137,310
Targeted Areas$143,280$167,160
Kent & Sussex CountiesNon Targeted Areas$108,800$125,120
Targeted Areas$130,560$152,320

 

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).
  • Purchase Price Limits for Single Family Homes:
    • Non-Targeted Areas 1 Unit:
      • New Castle County: $617,241
      • Kent & Sussex Counties: $544,232
    • Targeted Areas 1 Unit:
      • New Castle County: $754,406
      • Kent & Sussex Counties: $665,173
  • Here are the programs available under Home Again:
    • Smart Start
      • Unassisted first mortgage – No down payment or closing costs assistance.
    • 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$143,280$179,100
Kent & Sussex Counties$130,560$163,200
  • Minimum credit score of 620. (Applicants with credit scores of 659 or below must participate in housing counseling).

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$119,400$137,310
Targeted Areas$143,280$167,160
Kent & Sussex CountiesNon Targeted Areas$108,800$125,120
Targeted Areas$130,560$152,320

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$571,946$732,173$885,068$1,099,900
Kent$510,939$654,187$790,752$992,742
Sussex$510,939$654,187$790,752$992,742

Targeted Areas
Income limits and purchase price limits for homes located in targeted areas are significantly higher than the limits for homes in “non-targeted” areas.  Also, the first-time homebuyer requirement is not applicable for homes in targeted areas, which allows repeat buyers to purchase homes in targeted areas. Check if the home you want to purchase is located in a targeted area here.

  • Targeted areas include the following Census Tracts:
    • New Castle County:
      0006.02 0019.02 0021.00
      0023.00 0029.00 0030.02
    • Kent County:
      0425.00
    • Sussex County:
      0505.03                  0507.11
Product
Interest Rate
Freddie Mac, Smart Start5.625%
Freddie Mac, First State Home Loan6.000%
FHA, VA, RD Smart Start5.625%
FHA, VA, RD First State Home Loan5.75%

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