It’s no wonder why Delawareans and their visitors find delight spending time in the First State. Situated on the Atlantic coastal plain, this region showcases all four seasons and cultivates a rich history. Its coastal location and features make Delaware an ideal place to purchase a home.
Delaware offers several programs to promote homeownership in the state. Most of these programs are offered for both first-time and repeat buyers, but some are exclusive promotions for first-timers. These programs can help individuals and families close the financial gap between what they can afford and the list price, allowing homeowners a smoother closing process. Here are several first-time buyer programs that can help you seal the deal and invest in your new Delaware home.
Who qualifies as a first-time homebuyer in Delaware?
In the state of Delaware, an individual may qualify as a first-time homebuyer if he or she has not owned a home in the past three years as a primary residence. There are some exceptions to this, such as homeowners purchasing in a Targeted Area and some qualified veterans. When reviewing the guidelines for each program, check the specific requirements for exceptions.
Statewide First-Time Buyer Programs
Delaware Statewide First-Time Homebuyer Tax Credit
While most Delaware programs are available to both first-time and repeat buyers, there is a special tax credit opportunity exclusively for first-timers. This tax credit can help make your home more affordable and can be used alongside other loan assistance programs offered by the Delaware State Housing Authority (DSHA).
Delaware’s statewide first-time homebuyer tax credit allows buyers to claim 35% of the annual interest paid on their mortgage as a special federal tax credit of up to $2,000 per year. Be sure to check the official website for a list of participating lenders, additional qualifications, and targeted areas.
Statewide Non First-Time Buyer Programs
DSHA Homeownership Loans
The Delaware State Housing Authority (DSHA) offers several programs through its “Kiss Your Landlord Goodbye” initiative. DSHA offers a 30-year, fixed-rate mortgage with interest rates at or below the standard market rate for qualified first-time and repeat buyers. DSHA homeownership loans work through standard mortgage programs, including conventional, VA, FHA, and USDA mortgages. Income limits and credit requirements may apply, so be sure to check out the DSHA website for details.
DSHA Down Payment and Closing Cost Assistance
To assist with down payment and closing costs, DSHA offers its Preferred Plus program which can be used simultaneously with a DSHA Homeownership Loan. The DSHA customizable Preferred Plus Assistance program provides a no-interest second mortgage loan of 2–5 percent of the overall loan amount to be applied toward down payment or closing costs. Qualified applicants must meet all requirements for the DSHA Homeownership Loan as outlined on their website.
DSHA Homes for Grads Program
If you are a recent post-secondary graduate and have earned a four-year degree or higher within the last three years, you may qualify for DSHA’s Homes for Grads program to receive a reduced mortgage rate when participating in one of the above loan programs. See DSHA website for details and to contact a participating lender.
Homebuyer Programs by Location
In addition to statewide programs, there are often homebuyer assistance programs based in different cities and regions of a state. In Delaware, buyers in New Castle County have an opportunity to take part in a special program exclusively for first-time homebuyers.
New Castle County
First-time homebuyers who are considering a purchase in New Castle County may be interested in the New Castle Down Payment and Settlement Assistance Program. This program assists eligible low-to-moderate income borrowers to help cover the cost of a down payment and/or settlement expenses in the form of a low-interest loan. Other restrictions may apply. See website for details and how to apply.
First State, First Home
Whether you’re just getting ready to make the leap from renting to homeownership or you’re moving into a new house, be sure to check out these Delaware programs that provide financial assistance and support for eligible homebuyers. The path to your dream home in Delaware is closer than you know!
The links on this site were researched by NewHomeSource. This is as cohesive a list as possible. Individual homebuyers should contact entities to fully understand requirements and processes.