With the booming housing market in Delaware, first-time homebuyers will find it more difficult than ever to purchase their first home.
The Delaware State Housing Authority (DSHA) has programs to help first-time homebuyers with down payment and closing cost assistance, save money on insurance, and get lower than market interest rates on a mortgage.
Get Pre-Approved for a Mortgage and Check Rates
DSHA defines a first-time home buyer as someone who has not owned a home in the last three years.
See how much house you can afford with our calculator
National First-Time Homebuyer Loan Programs
FHA Loans
FHA loans are a government-backed home loan that is guaranteed by the Federal Housing Administration that requires a 580 credit score and 3.5% down. Debt-to-income ratios up to 50% are allowed making them perfect for low-income borrowers.
Conventional Loans
Conventional loans are not guaranteed by the governent but by private mortgage insurance companies and require a 620 credit score and a 5% to 20% down payment. If you have a 20% down payment mortgage insurance will not be required.
USDA Loans
USDA mortgage loans are for low-to-median income borrowers buying a home located in a USDA-eligible rural area. They provide 100% financing with a 620 or higher credit score. Mortgage insurance is required but the rate is the lowest of any type of mortgage program available.
VA Loans
Veterans of the U.S. military may be eligible for a VA home loan. No down payment or mortgage insurance is required and veterans with a 580 to 620 credit score are eligible.
HomeReady and Home Possible Loans
Freddie Mac and Fannie Mae created the HomeReady and Home Possible loan programs for low-income first-time homebuyers whose income does not exceed 100% of the area median income requiring just a 3% down payment and a 620 credit score.
Get Pre-Approved for a Home Loan Today
Helpful Resources
- How to buy a house with no money down
- First-time homebuyer grants
- How to qualify as a first-time homebuyer
- Bad credit home loan programs
DSHA Highlights and Eligibility Requirements
Benefits
- Provides down payment and closing cost assistance
- A tax credit of up to $2,000 for first-time homebuyers
Eligibility
Household income must be at or below the income limits:
- New Castle County – 1-2 people: $115,920 – 3+ people: $144,900
- Kent & Sussex County – 1-2 people: $98,280 – 3+ people: $122,850
Requirements
- Minimum 620 credit score (Housing counseling required for borrowers with a < 660 score)
- The maximum debt-to-income ratio (DTI) is 45% for borrowers with a FICO score below 700.
Statewide and Regional Programs
- Delaware State Housing Authority -Downpayment and closing cost assistance
- Habitat for Humanity – Builds and rehabilitates houses for families in need through volunteer labor
- U.S. Department of Agriculture Rural Housing – Rural homebuyer programs
