Down Payment Assistance Programs for First-Time Homebuyers in Delaware

Delaware, also called “The First State,” has a rich history. It is known for its beautiful beaches, and vibrant cities with The Delaware Beaches along with historic New Castle, and the scenic Brandywine Valley being the exciting attractions.

The housing sector of Delaware is facing significant challenges which require an immediate response. The state is dealing with a shortage of more than 20,000 housing units for median and low-income residents. Approximately one-third of workers cannot afford a one-bedroom apartment in the state, making it tough for first-time homebuyers to find affordable options.

This is where down payment assistance programs are playing their role in making home ownership accessible. The initiatives offered by the Delaware State Housing Authority and organizations provide financial support in the form of loans and grants to eligible applicants, turning their dream of homeownership into reality.

Looking for Assistance in a Specific Part of Delaware?

Do you want to buy a home or property in Delaware but are worried about the down payment and closing costs? Well, you are not alone as many people are finding it difficult to afford. Here is an in-depth look into some payment assistance programs available throughout the state.

Down Payment Assistance in Delaware

Delaware is facing an affordable housing crisis of its own with median home price reaching approximately $360,800. The surging cost of homes also means that homebuyers have to pay high amounts down payments.

Delaware State Housing Authority offers several down payment assistance programs that provide relief to low- to moderate-income families who want to purchase a house but can’t due to high upfront costs. Here is an overview of the initiatives.

Delaware Diamonds Home Loan Program

The Delaware Diamonds Home Loan Program is an initiative designed to support essential workers (state employees, healthcare workers, school employees (public and private), first responders (paramedics, police officers, firefighters), active duty military, and qualified veterans) in achieving homeownership.

• Assistance Type: Zero-interest, forgivable second mortgage loan
• Sponsor: Delaware State Housing Authority
• Assistance Amount: $10,000 (at maximum)

Eligibility Requirements

• The purchased house should serve as the applicant’s primary residence.
• Applicants should have a minimum score of 620.
• Applicants have to meet specific household income limits based on the county and household size.
• Borrowers have to complete a HUD-approved homebuyer education course, especially if their credit score is lower than 660.

Home Sweet Home Loan Program

The Home Sweet Home loan program is a valuable resource for both first-time and repeat homebuyers in Delaware which helps them alleviate the financial hurdles that emerge when you achieve your goal of becoming a homeowner.

Fundamentals

• Assistance Type: Zero-interest forgivable second mortgage
• Sponsor: Delaware State Housing Authority
• Assistance Amount: $12,000 (at maximum)

Eligibility Requirements

• The purchased property should serve as the applicant’s primary residence.
• The household income of the applicant should not exceed 80% of the area median income (AMI) for the county where the house is located.
• Application of the borrowers with a minimum credit score of 620 will not be entertained.
• The assistance will not be provided on houses with a sales price of higher than $285,000.
• Applicants may be required to complete an 8-hour HUD-approved homebuyer counseling course, especially if their credit score is lower than 660.
• The first mortgage should only be secured via a DSHA-approved lender using the DSHA Smart Start Mortgage Loan.

Delaware Down Payment Assistance Programs FAQs

How can you get the loan acquired through the Home Sweet Home program forgiven?

The loan is forgivable over a period of 10 years. For each year the borrower lives in the home as their primary residence, 10% of the loan balance is forgiven. After 10 years, the remaining balance is fully forgiven, provided the borrower can verify continued occupancy.

How much assistance can I receive via the Delaware Diamonds Home Loan Program?

Eligible applicants can receive up to $10,000 which can be used for down payment and closing costs.

Disclaimer: This article is for informational purposes only and should not be considered as legal or financial advice. Please consult an attorney, mortgage lender, or CPA for guidance on your specific situation.