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.

Eligibility

  • Maximum household income must be at or below $97,900.
  • Minimum credit score of 620. (Applicants with credit scores of 659 or below must participate in housing counseling.)
  • Maximum loan amount is $417,000. There is no purchase price limit.

To get started, find a participating lender here:

LENDERs

Down Payment Assistance and Closing Cost Help

Buying a house can be a big deal with lots of money required upfront. If saving enough for a down payment and closing costs have kept you from buying a home of your own, DSHA’s Preferred Plus program may be able to help.

All applicants using a DSHA Homeownership Loan can use our flexible, customized Preferred Plus assistance, which provides a no-interest second mortgage loan of 2 percent to 5 percent of your overall loan amount. You can apply that amount toward 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 your primary residence.

To qualify for Preferred Plus, you must meet all requirements for a Homeownership Loan, outlined above.

For First-Time Homebuyers

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 $150,000 at a 3.75% interest rate, you will pay about $5,625 in mortgage interest in the first year. With the tax credit, you can reduce your federal income tax liability by $1,968 for the year.

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

Maximum household income for eligibility is as follows:

CountyArea1 or 2 Person Households3 or More Person Households
New Castle CountyNon Targeted Areas$83,200$95,680
Targeted Areas$99,840$116,480
Kent & Sussex CountiesNon Targeted Areas$74,900$86,135
Targeted Areas$89,880$104,860

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 County$349,411$447,283$540,690$671,938
Kent County$248,098$317,655$383,962$477,135
Sussex County$291,176$372,752$450,552$559,933

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 by clicking on the link below.

  • Targeted areas include the following Census Tracts:
    • New Castle County: 6.01, 6.02, 9, 16, 21, 22, 23, 26, 27, 29, 30.02, 156
    • Kent County: none at this time
    • Sussex County: 505.03
    • To see if your selected property is in a qualified targeted area census tract, please click here.

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

Learn More

Are you interested in buying a home in Delaware? Are you a first-time or repeat buyer? Enter your information and we’ll help you with identifying our lending partners that will be able to assist you with obtaining a DSHA loan. We can also answer questions and send you our home-buying tips.