First-Time Home Buyer Programs in Delaware

Delaware State Housing Authority (DSHA) Programs:

Welcome Home First-Time Homebuyer Program:

Eligibility: First-time buyers (no homeownership in past 3 years), veterans, or buyers in targeted areas.
Offerings: 30‑year fixed-rate mortgage (FHA, VA, USDA, or conventional) at competitive rates through participating lenders; can be paired with down payment assistance.
Requirements:

• Income must not exceed county limits (e.g., ≤ $131,905 for a 3+ person household in New Castle County). View 2025 DSHA Program Notice (PDF).
• Minimum credit score of 620 (659+ if no counseling) .
• Debt-to-income ratio capped at 45%.
• Homebuyer education required.

Down Payment & Closing Cost Assistance:

First State Home Loan (formerly Preferred Plus): Provides 3% of the first mortgage amount as a 0% interest second loan, deferred until sale/refinance.
Diamond in the Rough: Offers up to 5% of the first mortgage amount in second loan assistance for eligible buyers including veterans and targeted-area residents.

Home Sweet Home Program:

Description: Forgivable second loan up to $12,000 for down payment/closing costs; forgiven 10% per year over 10 years, or on sale/refinance. Eligibility for both first-time and repeat buyers; income and sales price cap ($285,000).

Delaware Diamonds Program:

Benefits: $10,000 forgivable assistance for essential workers (state employees, teachers, healthcare, first responders, veterans); forgiven after 10 years.

Local Programs:

Wilmington

First Start Homebuyer Program: Offers $1,000–$5,000 as low-interest deferred loan (paid over 8 years or forgiven monthly) for first-time buyers ≤ 80% AMI within city limits.

New Castle County (outside Wilmington)

First-Time Homebuyer Program: Up to $5,000 as 0% deferred loan, due on sale/refinance; income ≤ 80% AMI, must be outside Wilmington city limits.

Dover

Dover Down Payment & Settlement Assistance: Up to $12,000 forgivable loan (fully forgiven after 10 years) for buyers ≤ 80% AMI with counseling.

Delaware First-Time Homebuyer Tax Credit:

Federal tax credit of 35% of annual mortgage interest (up to $2,000/year) for first‑time buyers using a DSHA mortgage. Fee: $350 closing; 120-day reservation window.

Additional Information:

• USDA and VA Loans: 0% down for rural and veteran buyers.
• Delaware Tax Credit details: Learn more at DSHA’s official site.
• Down payment loan page: See details at DSHA Lender Resources.