First Time Home Buyer Delaware State Housing Authority (DSHA) Programs

Delaware State Housing Authority First Time Home Buyer Programs

Are you planning to buy a home in Delaware? If you are a first time homebuyer, there are several down payment assistance programs available that could make financing more affordable for you. These programs offer benefits like low-interest loans, down payment assistance, and tax credits. In this blog, we will discuss some of the most popular programs and how to apply for them.

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Delaware State Housing Authority Smart Start Home Loan

The Smart Start Home Loan is a mortgage program that offers a 30-year fixed interest rate. This program, previously known as “DSHA unassisted,” provides competitive interest rates that are below market standards, resulting in potential savings for borrowers throughout the loan’s duration. The loan option is open for both conventional and government-backed loans and is accessible to residents of Kent and Sussex counties in Delaware.

Delaware State Housing Authority Home Sweet Home Loan

The Home Sweet Home Loan Down Payment Assistance Program, offered by DSHA, provides financial assistance of up to $12,000 to eligible homebuyers in Delaware. This program is available to both first time and repeat buyers with a household income that is 80% or less than the area median income (AMI), and who are planning to purchase a home in Delaware with a maximum sales price of $285,000.

Delaware Diamonds Home Loan

The DSHA Delaware Diamond DPA program offers a forgivable second mortgage loan of $15,000 to help essential workers in Delaware with closing costs and down payments. Eligible individuals include veterans, those working in education, the medical field, first responders, grocery store employees, general & wholesale merchandise retailers, and Delaware State employees.

Furthermore, the loan is forgivable, but only if the property is used as the primary residence for at least 10 years. If you sell or refinance the property before the 10-year mark, you will need to repay a prorated portion of the $15,000 loan. The amount owed will decrease by 10% for each year of residence.

Delaware State Housing Authority First State Home Loan

The DSHA First State Home Loan, previously known as “Preferred Plus,” is a second loan that is forgivable and comes with zero interest. Its main objective is to assist homebuyers by covering a 4% down payment and closing costs, depending on the final loan amount. Additionally, borrowers are not required to make any principal repayments until one of the following events occurs: refinance, sale of the property, transfer of title, or when the property is no longer being used as a primary residence – whichever happens first. This loan program provides significant financial assistance to homebuyers, allowing them to purchase a home with little out-of-pocket expenses.

Go Direct FHA 100% Financing

Direct Mortgage Loans is proud to bring the Go Direct FHA 100% Financing program to homebuyers in Delaware, offering a powerful path to homeownership with no down payment required. 

This innovative program combines a standard FHA loan with a second mortgage of up to 3.5% (based on the lesser of the sales price or appraised value) to fully cover the required down payment. The second mortgage features a 10-year term and offers both amortized and forgivable repayment options, making homeownership more accessible than ever. 

Key Benefits of the Go Direct FHA 100 for Delaware Homebuyers 

Buying a home in Delaware could feel out of reach for many, especially when saving for a down payment. The Go Direct FHA 100% Financing program is designed to change that. It offers a straightforward and accessible path to homeownership by eliminating the need for a down payment and providing flexible qualification options. Whether you’re a first-time buyer or not, this program is built to support a wide range of financial situations and credit profiles. 

• No Down Payment Required: 100% financing through a first and second mortgage. 
• Not Just for First-Time Buyers: Open to all eligible borrowers. 
• Credit-Friendly: Minimum credit score of 620; welcomes those with less-than-perfect credit. 
• Flexible Qualification: No maximum debt-to-income (DTI) ratio. 
• Non-Occupant Co-Borrowers Allowed: No restrictions for family or others helping you qualify. 
• Wide Property Eligibility: Includes single-family homes, townhomes, condos, PUDs, and manufactured homes. 

Go Direct FHA 100% Financing Requirements 

To qualify in Delaware, you must: 

• Have a minimum credit score of 620. 
• Maintain a maximum DTI ratio of 45%. 
• Complete a Homebuyer Education course (at least one borrower). 
• Adhere to FHA loan limits and HUD county limits applicable in Delaware. 
• Use the home as your primary residence. 

How To Apply For The Go Direct FHA 100 Financing In Delaware 

1. Apply with Direct Mortgage Loans: Start your application online or with a local Loan Officer. 
2. Verify Eligibility & Obtain Pre-Approval: We can assist you in verifying eligibility and obtaining pre-approval if you qualify for the program. 
3. Complete Homebuyer Education: A required step to ensure you’re prepared for homeownership. 
4. Close on Your New Home: Once approved, you’re ready to move into your new Delaware home! 

Delaware First Time Home Buyer Tax Credit

If you are a first time homebuyer in the state of Delaware, you could be eligible to claim a tax credit of up to 35% of the annual mortgage interest paid. The maximum benefit you can receive is $2,000 per year. This credit reduces your federal tax owed by a direct dollar-for-dollar amount. You can also combine this tax credit with a down-payment program to save even more.

First Time Home Buyer Tax Credit Eligibility Requirements

To qualify for the DSHA First State Home Loan, you must purchase a home in Delaware and not have owned a primary residence in the last three years, except when buying in a targeted area or utilizing the Qualified Veteran Exemption. Your household income and the property’s purchase price must stay within the program’s specified limits. Additionally, you must reside in the purchased home as your primary residence and complete all necessary tax credit documents during the closing process.

Benefits of Delaware State Housing Authority Mortgage Assistance Programs

The Delaware State Housing Authority down payment assistance program offers several benefits to homebuyers in Delaware. These programs can provide up to $15,000 in financial assistance to help eligible homebuyers cover the down payment and closing costs on a home purchase. This assistance can significantly reduce the upfront costs of homeownership and can help homebuyers make a larger down payment. As a result, you could save money on your mortgage payments over the life of the loan. Additionally, by making a larger down payment, you will build equity faster. This means that you will have more ownership of your home sooner and could be able to sell your home for a profit if the market value increases.

How to Apply for First Time Home Buyer Delaware State Housing Authority Programs

If you are interested in applying for the DSHA Down Payment Assistance Program, here are the steps you need to take:

Step 1: Verify that you meet income and credit requirements

To be eligible for the DSHA Down Payment Assistance Program, you must meet certain income and credit requirements. You can find the specific income limits for your area on the DSHA website.

Step 2: Apply for a Mortgage through a participating lender

Once you have verified that you meet the income and credit requirements, you can apply for a mortgage through a participating lender.

When you apply for a mortgage, be sure to let your lender know that you are interested in the DSHA Down Payment Assistance Program. We can help you determine if you are eligible for the program and how much assistance you can receive.

Step 3: Find a Home and Finalize your mortgage application

After you have been approved for a mortgage, you can start shopping for a home. Once you have found a home you want to purchase, you will need to work with your lender to finalize your mortgage application. If your loan is approved, you will be able to close on your home and start enjoying the benefits of homeownership!

First Time Home buyer Delaware State Housing Authority FAQ’s

Are there any restrictions on the type of property I can purchase through the program?

The DSHA down payment assistance program has restrictions on eligible property types. These include rental properties, second homes, cooperative housing units, non-warrantable condos, and properties for investment purposes. Additionally, buyers must meet household income limits based on the county they are purchasing in. These limits consider the number of people in the household, accounting for all incomes, whether they are on the mortgage loan.

Can I combine the program with other assistance programs?

You have the option to combine the DSHA first time home buyer tax credit with other assistance programs, such as the Preferred Plus loan. This allows borrowers to merge the Preferred Plus loan with a federal tax credit, potentially receiving up to 35% of their yearly mortgage interest, capped at a maximum of $2,000 per year.

Are there any penalties or repayment requirements if I decide to refinance my mortgage in the future?

Should you opt to refinance your mortgage down the line, it’s important to be aware of potential penalties and repayment obligations. In particular, the DSHA Delaware Diamond DPA program requires a prorated repayment of the $15,000 loan in the event of a property sale or refinance before the 10-year threshold. The repayment amount decreases by 10% for each year of residency.

Down payment programs subject to additional eligibility requirements that may vary. Eligibility and approval is subject to completion of an application and verification of home ownership, occupancy, title, income, employment, credit, home value, collateral and underwriting requirements. Loan products described here may not be available at the time of application. All products are subject to eligibility and availability. Speak with a qualified mortgage professional to determine which programs may be available to you. Direct Mortgage Loans, LLC NMLS ID# is 832799 (www.nmlsconsumeraccess.org). Direct Mortgage Loans, LLC office is located at 11011 McCormick Rd Suite 400 Hunt Valley, MD 21031. Equal housing lender.