Delaware Mortgage Guides
Delaware First-Time Home Buyer Guide 2026
DSHA’s Welcome Home and Open Door programs, the five assistance loans, income and purchase price limits by county, and the step-by-step path to buying your first home in Delaware.
In This Guide
Welcome Home Program
Welcome Home is DSHA’s first-time buyer track. It pairs a below-market 30-year fixed first mortgage with a choice of five assistance loans, and opens the full menu including Take5 and Diamond in the Rough.
| Feature | Detail |
|---|---|
| Assistance amount | 3%, 4% or 5% of the first mortgage amount, depending on which second you choose |
| Repayment | Deferred — no monthly payment; due on refinance, sale, transfer of title, or when the home stops being your primary residence |
| Eligible first mortgage | DSHA 30-year fixed — conventional, FHA, VA or USDA |
| Min credit score | 620 |
| Purchase price / income limits | $659,385 in New Castle; $566,354 in Kent and Sussex; income limits vary by household size |
| First-time buyer required? | Yes — Welcome Home is first-time buyers only |
| Homebuyer education | Housing counseling required for applicants with credit scores of 659 or below |
| Owner occupancy | Required — primary residence only |
Welcome Home opens all five DSHA assistance loans, including Take5 at 5% of the first mortgage amount and Diamond in the Rough for homes needing minor repairs. Open Door, by contrast, offers three. If you are a first-time buyer, Welcome Home is almost always the wider door.
Open Door Program
Open Door serves both first-time and repeat buyers, with higher income limits than Welcome Home and a narrower set of assistance loans.
| Feature | Detail |
|---|---|
| DPA amount | 3%, 4% or 5% of the first mortgage amount — First State, Keys4You or Take5 |
| Structure | Zero-interest second mortgage with no monthly payment |
| Forgiveness | None — deferred rather than forgiven; repaid on refinance, sale, transfer of title, or loss of primary residence status |
| Eligible first mortgages | DSHA 30-year fixed — conventional, FHA, VA or USDA |
| Min credit score | 620 |
| First-time buyer | Not required — open to first-time and repeat buyers |
The Five DSHA Assistance Loans
All DSHA assistance comes as a second mortgage behind a DSHA first. None carry interest and none require a monthly payment.
- Smart Start Home Loan: a DSHA first mortgage with no down payment or closing cost assistance attached — the option for buyers who have their own funds.
- First State Home Loan: zero-interest second worth 3% of the first mortgage amount, for down payment and closing costs.
- Keys4You Home Loan: zero-interest second worth 4% of the first mortgage amount.
- Take5 Home Loan: zero-interest second worth 5% of the first mortgage amount — the largest standard assistance loan.
- Diamond in the Rough: zero-interest second worth 5% of the first mortgage amount, for homes needing minor repairs. Requires qualifying for the FHA 203(k) limited program.
These programs have specific income limits, purchase price limits, and geographic restrictions that vary by county. Check with a DSHA-participating lender for current program availability and terms in your specific county.
Income and Purchase Price Limits
| Program | Income Limit | Purchase Price Limit | Geography |
|---|---|---|---|
| Welcome Home | $122,700 (1–2 person) / $141,105 (3 or more) | $659,385 | New Castle County |
| Welcome Home | $111,400 (1–2 person) / $128,110 (3 or more) | $566,354 | Kent & Sussex |
| Open Door | $147,240 (1–2 person) / $184,050 (3 or more) | $659,385 | New Castle County |
| Open Door | $133,680 (1–2 person) / $167,100 (3 or more) | $566,354 | Kent & Sussex |
| Welcome Home — targeted areas | $147,240 (1–2 person) / $171,780 (3 or more) | $805,916 | New Castle County |
| Welcome Home — targeted areas | $133,680 (1–2 person) / $155,960 (3 or more) | $692,211 | Kent & Sussex |
Delaware Down Payment Assistance Eligibility Requirements
To qualify for Welcome Home, Open Door, or any of the DSHA assistance loans, buyers generally need to meet all of the following:
- Credit score: Minimum 620 for all DSHA programs.
- Housing counseling: Required for applicants with credit scores of 659 or below.
- Owner-occupancy: Must live in the home as your primary residence.
- Income limits: Household income at or below the DSHA limit for your county and household size.
- Purchase price limits: $659,385 in New Castle, $566,354 in Kent and Sussex — higher inside targeted areas.
- First-time buyer status: Required for Welcome Home; not required for Open Door.
Targeted areas are specific Census tracts DSHA designates to expand homeownership. Buying inside one raises both the income limit and the purchase price cap, and can relax other program requirements. DSHA publishes the tract lists by county at destatehousing.com.
Step-by-Step Buying Process for Delaware First-Time Buyers
| Step | What to Do | Notes |
|---|---|---|
| 1 | Check your credit score | 620 is the DSHA minimum; below 660 you will also need housing counseling |
| 2 | Find a DSHA-participating lender | DSHA loans are originated by approved lenders, not by DSHA directly |
| 3 | Complete housing counseling if required | Mandatory at credit scores of 659 or below |
| 4 | Get pre-approved | Confirms your income falls under the Welcome Home or Open Door limit for your county |
| 5 | Make an offer | Purchase price must fall under the county cap — higher inside a targeted area |
| 6 | Complete the inspection period | Homes needing minor repairs may qualify for Diamond in the Rough with FHA 203(k) limited |
| 7 | Close on your home | Assistance is recorded as a deferred second mortgage; budget for the realty transfer tax |
Delaware First-Time Home Buyer FAQs
How much down payment assistance can I get in Delaware?
DSHA assistance is calculated as a percentage of your first mortgage amount, not the purchase price. First State provides 3%, Keys4You 4%, and Take5 5%. On a $350,000 purchase with an FHA loan and 3.5% down, Take5 works out to roughly $16,888 — more than the $12,250 down payment.
Do I have to repay DSHA down payment assistance?
Yes, eventually. The assistance loans carry no interest and no monthly payment, but they are deferred rather than forgiven. Repayment is triggered by refinancing, selling, transferring title, or the home ceasing to be your primary residence.
What is the income limit for a first-time buyer in Delaware?
It depends on your county, household size and program. Welcome Home limits are $122,700 for a 1–2 person household in New Castle County and $111,400 in Kent and Sussex, rising to $141,105 and $128,110 for households of three or more. Open Door limits are higher, and buying in a targeted area raises them further.
Do first-time buyers get a break on the Delaware realty transfer tax?
Yes. Delaware Code § 5402(c) reduces the tax by 0.5% multiplied by the lesser of the property’s value or $400,000, for transactions entered into on or after August 1, 2017. The reduction applies to the grantee’s — the buyer’s — portion only and does not relieve the seller of their half. Counties that levy their own transfer tax must also exempt first-time buyers up to at least the lesser of the property value or $400,000.
