First time buyers in Delaware can take advantage of affordable mortgages that the state offers through lender partnerships with the Delaware State Housing Authority. The real estate finance agency has both home loans and one Advance payment assistance Program that can make it easier for you to buy a home anywhere in the state.
First-time home loan programs in Delaware
DSHA Home Ownership Loan Program
The Delaware State Housing Authority (DSHA) home loan program offers a mix of conventional 30 year fixed rate, FHA, VA, and USDA loans at competitive rates. These are available to both first-time buyers and returning home buyers and can be combined with the down payment and support of the agency’s closing costs. The maximum loan amount that you can get is $ 417,000.
To qualify for a home loan, you must have a credit score of at least 620. If your score is 659 or less, you must also undergo housing counseling – a program requirement. If your credit score is less than 620, the DSHA can connect you to free financial coaching to improve your standing. If your score is 699 or less, your Debt to Income Ratio (DTI) cannot exceed 45 percent.
You must also respect household income limits, which are based on the county:
- New Castle County – No more than $ 115,920 for a one or two person household or $ 144,900 for a three or larger household
- Kent Counties and Sussex Counties – No more than $ 98,280 for a one- or two-person household or $ 122,850 for a three-person or larger household
DSHA Homes for Graduates
Delaware homebuyers who have earned a four-year degree (or higher) in the past three years can qualify for DSHA’s Homes for Grads program, which offers a discounted rate of one-half percent (or 50 basis points) is. . To qualify, you must meet the eligibility requirements for the Homeownership Loan Program.
Delaware Down Payment Assistance
DSHA Preferred Plus
The DSHA Preferred Plus Down Payment Support and Closing Costs Program offers homebuyers a second mortgage equal to 2 to 5 percent of your total loan amount. This interest-free second mortgage must be paid back when you move out, sell your home, refinance your first mortgage, or when the home is no longer your primary residence. To qualify, you must meet the eligibility requirements for a home ownership loan.
Other Delaware homebuyer assistance programs
Tax credit for first-time buyers
Delaware offers one Federal tax credit For first-time buyers, up to 35 percent of your annual mortgage interest up to $ 2,000 per year. You can apply for credit alongside the DSHA’s mortgage and down payment assistance program.
To qualify, you must be a first time home buyer (or have not owned a home in the last three years), or you must be purchasing a home in a specific “destination” or veteran. The price of the home must also be within the county’s purchase limits, which range from $ 294,600 for a single family home in Sussex County to $ 696,656 for a four-unit home in New Castle County. Your income must also be within the household income limits, which differ depending on the district and household size and regardless of whether you shop in a target area or a non-target area.
Other first-time buyer loan programs
First time buyers in Delaware can consider other government sponsored loan programs such as FHA, VA, or USDA loans. These programs are popular with people who have lower credit scores or who cannot afford a large down payment. Fannie Mae and Freddie Mac also support conventional loans with down payments as low as 3 percent, which can be another option for first-time buyers. To learn more about these types of loans and more, take a look at Bankrate’s Loans and Programs for First Time Buyers to lead.
For more Delaware home ownership programs, including by city or county, see HUD.gov.
When reaching out to mortgage lenders and considering your loan options, consider the Delaware State Housing Authority loan and assistance program as it can help you get a home sooner and for less upfront. You can also connect with a partner of the agency Lender to start the process. Whichever offer you ultimately choose, be sure to compare offers from at least some lenders to ensure you get the best results Mortgage rates.