Introduction: Why Delaware First-Time Homebuyers Have a Unique Advantage
Buying your first home can feel overwhelming, but if you’re house-hunting in Delaware, there’s good news. The state offers several programs that can make the process easier and more affordable. From down payment assistance to federal tax credits, Delaware first-time homebuyer programs are designed to lower both upfront costs and long-term financial strain.
Thinking of putting down roots in Wilmington, Dover, or elsewhere in the First State? Knowing your options could be the key to opening the door to homeownership.
Key Delaware First-Time Homebuyer Programs
DSHA Welcome Home Program
The Delaware State Housing Authority (DSHA) offers the Welcome Home Program, featuring a 30-year, fixed-rate mortgage plus help with down payment and closing costs.
Eligibility:
- First-time homebuyer (haven’t owned a home in the last 3+ years).
- Minimum credit score: 620–640.
- Income and purchase price limits vary by county and household size.
- Completion of a HUD-approved homebuyer education course.
Benefits:
- Competitive interest rates.
- Access to additional down payment assistance.
Home Sweet Home Down Payment Assistance Program
The Home Sweet Home program offers a forgivable loan of up to $12,000 to help cover your down payment and closing costs.
Eligibility:
- Available to both first-time and repeat buyers.
- Must meet program income limits.
- Homebuyer education is required.
Benefits:
- Loan forgiveness once residency requirements are met.
- Reduces out-of-pocket expenses at closing.
Delaware Diamonds Program
The Delaware Diamonds program provides up to $10,000 in forgivable down payment assistance — specifically for essential workers.
Eligibility:
- Open to veterans, healthcare workers, teachers, first responders, grocery employees, and Delaware state employees.
- Must live in the home as a primary residence for a set period.
Benefits:
- No repayment if residency conditions are met.
- Supports essential workers aiming to buy a home.
First State Home Loan
The First State Home Loan gives eligible buyers a second mortgage of up to 3% of the primary loan amount to help cover down payment and closing costs.
Eligibility:
- Open to first-time and repeat buyers.
- Income and purchase price limits apply.
Benefits:
- Repayment is deferred until you sell, refinance, or move out.
- Helps ease upfront financial pressure.
Delaware First-Time Homebuyer Tax Credit
This program offers a federal tax credit of up to $2,000 per year, letting you claim a portion of your mortgage interest.
Eligibility:
- Must be a first-time homebuyer (exceptions for targeted areas).
- Income and purchase price limits must be met.
- Must use a DSHA-participating lender and complete the necessary tax credit paperwork.
Benefits:
- Lowers your federal tax bill every year.
- Can be combined with down payment assistance programs.
How to Apply for Delaware First-Time Homebuyer Programs
Applying for Delaware’s first-time homebuyer programs involves a few important steps:
Step 1: Work with a DSHA-Approved Lender
You’ll need to work with an approved lender. Contact Federal Hill Mortgage to get personalized guidance from a team that knows these programs inside and out.
Step 2: Prepare Required Documentation
Gather these documents early:
- Proof of income (recent pay stubs, W-2s, tax returns).
- Credit reports.
- Asset statements (checking, savings, retirement accounts).
Step 3: Complete Homebuyer Education
Finish a HUD-approved homebuyer education course — it’s a must for DSHA program eligibility.
Step 4: Submit Your Application
Your lender will handle your application and help you select the right mortgage and assistance programs based on your eligibility.
Step 5: Close on Your New Home
Once approved, you’ll move forward to closing — and officially become a homeowner in Delaware!
Spotlight on Wilmington: The Wilmington First Start Homebuyer Program
If you’re buying in Wilmington, check out the Wilmington First Start Homebuyer Program:
- Offers down payment and closing cost help.
- Available to first-time buyers purchasing within city limits.
- Income and price limits apply.
- Requires completion of homebuyer education.
You can also combine this local program with DSHA assistance for even more savings.
Why Work with Federal Hill Mortgage?
At Federal Hill Mortgage, we bring over 20 years of experience helping first-time homebuyers in Delaware. Here’s what sets us apart:
- Tailored Loan Options: We match you with the best-fit programs for your needs.
- Streamlined Process: We make applying simple and stress-free.
- Trusted Guidance: We stay current with DSHA and local program updates to maximize your savings.
Want a faster, easier way to get preapproved? Try our Mortgage Pre-Qualification with Soft Credit Pull — it won’t affect your credit score.
Delaware First-Time Homebuyer Programs: FAQs
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What is the minimum credit score for DSHA programs?
Typically between 620 and 640, depending on the program.
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Can repeat buyers qualify for any programs?
Yes! Both the Home Sweet Home and First State Home Loan programs are open to qualifying repeat buyers.
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Is homebuyer education mandatory?
Yes — it’s required for most DSHA programs.
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Can the tax credit be used with other assistance programs?
Absolutely. You can pair the Delaware First-Time Homebuyer Tax Credit with down payment assistance programs.
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Are there special programs for Wilmington residents?
Yes — the Wilmington First Start Homebuyer Program offers added support for those buying within city limits.
Take Control of Your Mortgage Journey Today.
Ready to Take the First Step?
Let’s get you into your first home. Contact Federal Hill Mortgage today to find out which Delaware first-time homebuyer programs you qualify for — and get expert guidance through every step.
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