Are you a first-time homebuyer in Delaware looking for assistance to make your dream of homeownership a reality? You’re in luck! The Delaware State Housing Authority (DSHA) offers several programs designed to help first-time buyers like you get into your first home.
In this comprehensive guide, we’ll explore the top programs and how they can benefit you, as well as provide additional resources to support your homebuying journey.
DSHA Homeownership Loan Program
The DSHA Homeownership Loan Program is the primary first-time homebuyer assistance program in Delaware. It offers 30-year fixed-rate mortgages at competitive interest rates, which can help you save money on your monthly payments or purchase a more expensive home compared to other loan options.Key features of the DSHA Homeownership Loan Program include:
- Eligibility for conventional, FHA, VA, or USDA loans
- Potential for down payment assistance
- Loan amount limit of $417,000
- Minimum credit score of 620 (659 if your score is below 659, you’ll need to complete a housing counseling course)
- Household income limits that vary by county and household size
To qualify for the program, you must be a first-time homebuyer, defined as someone who has not owned a home in the past three years. Additionally, you must meet certain income and purchase price limits, which are set by the U.S. Department of Housing and Urban Development (HUD) and vary by county and household size.
DSHA Preferred Plus Down Payment Assistance
The DSHA Preferred Plus program provides down payment loans ranging from 2% to 5% of your mortgage amount. This “silent second mortgage” doesn’t require monthly payments or interest, but you’ll need to repay the borrowed amount when you refinance, sell the home, move out, or finish paying down your mortgage.
To be eligible for the Preferred Plus program, you must be a first-time homebuyer, meet income and purchase price limits, and be using the DSHA Homeownership Loan Program. The down payment assistance can be used for a conventional, FHA, VA, or USDA loan.
DSHA First-Time Homebuyer Tax Credit
The Delaware First-Time Homebuyer Tax Credit allows you to reduce your federal tax bill by up to 35% of your annual mortgage interest, up to a maximum of $2,000. This tax credit can be used in addition to the DSHA mortgage and down payment assistance programs.
To qualify for the tax credit, you must be a first-time homebuyer or purchase in a “targeted area.” Income and home purchase price limits also apply, which vary by county and household size. The tax credit is available for the life of the loan, as long as you continue to own and occupy the home as your primary residence.
Other Homebuyer Assistance Programs
In addition to the DSHA programs, there are other resources available to first-time homebuyers in Delaware:
Habitat for Humanity
Habitat for Humanity is a non-profit organization that builds and rehabilitates houses for families in need through volunteer labor and donations. To qualify for a Habitat home, you must meet certain income guidelines, be willing to contribute “sweat equity” hours, and complete homebuyer education courses.
Habitat homes are sold to partner families at no profit and financed with affordable, no-interest loans. This program provides an opportunity for low-income families to achieve homeownership and build equity in their homes.
U.S. Department of Agriculture Rural Housing
The U.S. Department of Agriculture (USDA) offers homebuyer programs in rural communities across Delaware. The USDA Single Family Housing Guaranteed Loan Program provides 100% financing for low- to moderate-income borrowers in eligible rural areas. The USDA Direct Loan Program offers subsidized loans for very low- and low-income applicants.
To qualify for USDA homebuyer assistance, you must meet income limits, have an acceptable credit history, and be purchasing a home in a designated rural area. The USDA programs can be used in conjunction with the DSHA Homeownership Loan Program and other assistance options.
Homebuyer Education and Counseling
Regardless of which homebuyer assistance program you choose, it’s essential to complete a homebuyer education course. DSHA requires all first-time homebuyers to attend a course to ensure they understand the responsibilities and risks of homeownership.
Homebuyer education courses cover topics such as budgeting, credit, the mortgage process, home maintenance, and fair housing laws. Many courses are available online or in-person through approved housing counseling agencies.In addition to education, individual housing counseling can provide personalized guidance on your homebuying journey. Counselors can help you assess your financial situation, create a budget, improve your credit, and navigate the homebuying process.
Conclusion
As a first-time homebuyer in Delaware, you have access to a variety of assistance programs that can make your homeownership dreams more achievable. By taking advantage of the DSHA Homeownership Loan Program, Preferred Plus Down Payment Assistance, and First-Time Homebuyer Tax Credit, as well as other resources like Habitat for Humanity and USDA Rural Housing, you can overcome financial barriers and become a proud Delaware homeowner.
Remember to complete a homebuyer education course and consider individual housing counseling to ensure you’re well-prepared for the responsibilities of homeownership. With the right knowledge and support, you can navigate the homebuying process with confidence and make your dream home a reality.
