Delaware First-Time Home Buyer Programs 2026

Delaware Home Buyer Programs Compared (2026)

Delaware buyers have 5 DSHA assistance options and 4 local programs to weigh, and only the local ones can disappear without repayment. Here they are as of November 3, 2026.

Sources: DSHA homeownership loans and interest rate pages (checked November 3, 2026); City of Wilmington First Start page; City of Dover Community Development page and Settlement Assistance Guidelines; New Castle County DPS brochure (June 2026); Sussex County Housing Trust Fund Homebuyer Assistance page.

Read the DSHA rows carefully: the "assistance" is a lien sized to your loan, and the bigger percentages come with higher interest rates. Dover and Sussex are the only programs here that can be wiped out by staying put.

DSHA Income and Purchase Price Limits by County (2026)

DSHA sets limits for just 2 areas, New Castle County and Kent plus Sussex, with higher figures in 9 targeted census tracts. According to DSHA's homeownership loans page, limits depend on household size and the county where you buy.

Source: DSHA, Homeownership Loans (opens in a new tab), checked November 3, 2026; no effective date is printed. Targeted tracts are 0006.02, 0019.02, 0021.00, 0023.00, 0029.00 and 0030.02 in New Castle, 0425.00 in Kent, and 0505.03 and 0507.11 in Sussex. DSHA links to the FFIEC geocoding map to check an address.

Local programs use much lower, HUD-based limits. New Castle County's DPS caps a family of four at $98,150 (80% of median, June 2026), Wilmington's First Start allows $98,150 under its federal pot or $122,700 under its city-funded pot (effective June 1, 2026), and Sussex County allows $123,840 for four (120% of median, effective May 1, 2026). Dover requires income between 60% and 80% of Kent County's median: $64,680 to $86,200 for four, effective June 1, 2026.

How Far 3%, 4% and 5% Go in Delaware

Grantsights analysis of DSHA's assistance percentages against U.S. Census Bureau QuickFacts median home values (2020-2024 ACS) finds that First State's 3% falls short of a 3.5% FHA down payment in every area, and only Keys4You or Take5 cover it. That's because DSHA sizes help to the loan, not the price, and an FHA loan is 96.5% of the price.

Calculation: median value times 96.5% for the FHA loan amount (before any upfront mortgage insurance), times each DSHA percentage. The 3.5% minimum is according to HUD's loans page (opens in a new tab). Medians trail 2026 sale prices, especially in coastal Sussex.

Sussex has the highest median of the three counties at $382,600, yet the lower Kent and Sussex price cap of $566,354 still leaves room. The bigger constraint there is the interest rate cost of the larger assistance, covered below.

Local Help in Wilmington, Dover, New Castle County and Sussex County

Delaware's 4 main local programs differ more than the state options do: one is a true repayable loan, two are forgiven after 10 years, and Wilmington's page doesn't say.

Wilmington: the lesser of $15,000 or 6% of the price

According to the City of Wilmington's First Start Homebuyer Program page (opens in a new tab), the program is "Accepting Applications," with $300,000 in federal CDBG funds (80% of median income) and $200,000 in city general funds (100% of median income). Each buyer can get the lesser of $15,000 or 6% of the purchase price, based on demonstrated need. Key rules:

• A single-family home inside city limits, kept as your main residence; you don't have to live in Wilmington now.
• No home owned in the last 3 years, unless you're a single parent or displaced homemaker.
• At least $1,000 of your own money, not counting gifts, plus a certified housing counseling course.
• A fixed-rate first mortgage of 30 years or less. Prepaid fees aren't covered.
• Your lender or housing counselor submits the full application through the city's Neighborly portal; incomplete applications are rejected, not held.

The page doesn't say whether the assistance is a grant or a lien, so ask your counselor what you'd sign at closing. On a $200,000 Wilmington rowhouse, 6% is $12,000, which is under the $15,000 cap.

Dover: up to $20,000, forgiven after 10 years

The City of Dover's Community Development page (opens in a new tab) showed $72,769.57 available for its first-time homebuyer program as of October 23, 2026. The city's Settlement Assistance Guidelines describe help for up to $20,000 of settlement costs, with no more than 50% of the lender's required down payment covered, secured by a second mortgage. If you sell, transfer or move out within 10 years, a percentage comes due; after 10 years it's fully forgiven. You'll need a 620 credit score, $1,000 of your own cash, no more than $20,000 in assets, HUD-approved counseling, and income between 60% and 80% of median. When the money runs out, Dover puts qualified buyers on a wait list for the next CDBG round.

New Castle County (outside Wilmington): up to $10,000, repaid monthly

New Castle County's Down Payment Settlement (DPS) brochure, dated June 2026, offers $1,000 to $10,000 at 0% interest for homes outside the City of Wilmington priced up to $594,550. This one isn't deferred for long: it's a 15-year loan with 2 optional-payment years followed by 13 years of monthly payments, and the balance is due if you sell. You put in at least $500, finish homeownership education, and apply through a county-recognized HUD-approved counseling agency.

Sussex County: $20,000 for closing costs

The Sussex County Housing Trust Fund's Homebuyer Assistance page (opens in a new tab) says round 5 funding is available as of July 1, 2026, first-come, first-served until exhausted. The $20,000 is a 0% prorated soft second mortgage, repayable only on sale or transfer and considered satisfied after 10 years. It covers closing and settlement costs only, with no cash back. You must earn under 120% of median ($123,840 for four), hold no more than $15,000 in liquid assets, and complete 8 hours of HUD-approved pre-purchase counseling. It's open to repeat buyers too.

FHA, VA and USDA Loans in Delaware

DSHA's rate sheet lists 3 government loan types, FHA, VA and USDA, alongside conventional loans, and its Welcome Home government rate started at 7.000% on November 3, 2026.

• FHA in Delaware: HUD's loans page (opens in a new tab) puts the FHA down payment as low as 3.5% of the price, on 1 to 4 unit homes. DSHA's Diamond in the Rough option adds a small repair budget through FHA's 203(k) limited program.
• VA: eligible veterans and service members may buy with no down payment when the price doesn't exceed the appraised value, per the VA purchase loan page (opens in a new tab), which also notes a funding fee may apply.
• USDA: much of Kent and Sussex is rural. According to USDA Rural Development's direct loan page (opens in a new tab), the Section 502 direct rate effective November 1, 2026 is 6.25%, payment assistance can lower it to as little as 1%, and no down payment is typically required. Delaware is served by USDA's combined Delaware and Maryland office.

For a side-by-side of these loan types, see the national first-time buyer guide; for USDA repair loans and grants, see our USDA housing grants guide.

What DSHA Doesn't Tell You About Its Down Payment Loans

Grantsights compared DSHA's rate sheet against its assistance options and found 4 things a buyer should weigh before choosing a percentage.

1. Bigger assistance costs a higher rate. On November 3, 2026, Welcome Home government loans were 7.000% with no assistance, 7.250% with First State, 7.500% with Keys4You and 8.000% with Take5. On a $300,000 loan, monthly principal and interest is $1,995.91 at 7.000% and $2,201.29 at 8.000%, a difference of $205.39 a month. Take5 brings $15,000, but the higher rate eats that in about 73 months, roughly 6 years, and you still repay the $15,000 at sale. First State's $9,000 costs $50.62 a month more, which takes nearly 15 years to equal the help. For buyers who plan to stay long-term, the honest answer is that the smallest percentage is often the best value.
2. Targeted tracts carry much lower rates. In DSHA's 9 targeted tracts, Welcome Home government rates were 5.500% to 6.500% on the same day. If you're buying near a targeted tract, check the FFIEC map before choosing a house.
3. No dates are printed. DSHA's limits and rate tables don't show an effective date. Ask your loan officer for the rate lock date and the limits in effect when you apply.
4. The transfer tax break is separate. DSHA doesn't mention it, but 30 Del. C. § 5402(c) (opens in a new tab) reduces a first-time buyer's share of realty transfer tax by 0.5% of the lesser of the price or $400,000. That's up to $2,000, claimed on Delaware's transfer tax forms at settlement. The state definition requires that you've never held a direct legal interest in residential real estate anywhere, which is stricter than DSHA's.

DSHA's buy-a-home page reports 1,704 Delaware families bought a home with its help in 2025, with $498.5 million in first mortgages and $12.6 million in down payment and closing cost assistance. That averages about $7,400 of assistance per family, closer to First State's 3% than to Take5's 5%.

Common Mistakes and Red Flags for Delaware Buyers

Delaware's programs fail buyers most often over 3 details: rate, repayment and timing. Here's what to watch.

• Choosing the largest percentage by reflex. A common mistake is picking Take5 because it's the biggest number. As the rate math above shows, the 1-point rate premium can cost more than the help within about 6 years.
• Treating New Castle County's DPS as deferred. Buyers underestimate this one. After 2 years, it becomes a monthly payment on top of your mortgage for 13 years. Build that payment into your budget before you commit.
• Expecting cash back. Sussex County and Dover both say no cash goes back to the buyer at settlement. Unused money is returned to the program.
• Holding too much savings. Sussex limits liquid assets to $15,000 and Dover to $20,000. Moving money around to qualify can look like hiding assets; ask your counselor first.
• Paying for grant access. A red flag is anyone charging a fee to find or unlock Delaware homebuyer grants. The FTC's grant scam guidance (opens in a new tab) says real government grants require an application and are always for a specific purpose, and that agencies never ask for payment by gift card, cash reload card, wire or cryptocurrency. DSHA's help comes through participating lenders; the local programs through HUD-approved counselors.

If repairs are what's holding you back after you buy, our guide to home repair grants for low-income homeowners lists federal and local options.

How to Apply in Delaware, Step by Step

Getting DSHA and local help usually takes 6 steps, and the counselor step comes first because 3 of the 4 local programs require it before an application is accepted.

1. Pick your county row. Compare your household income against DSHA's limit and, if you want local help, the lower HUD-based limit for your city or county.
2. Book housing counseling. DSHA keeps a housing counselor list (opens in a new tab). It's required below a 659 credit score, and Dover, Sussex, Wilmington and New Castle County all require a counseling or education certificate.
3. Get pre-approved by a DSHA participating lender. Use DSHA's lender list (opens in a new tab) and ask for a quote on Smart Start, First State, Keys4You and Take5 side by side.
4. Have your counselor or lender file the local application. Wilmington takes complete applications only, Dover won't reserve funds until you're approved for a mortgage, and Sussex's counselor submits income verification on your behalf.
5. Make an offer under the limits. Stay under DSHA's cap, New Castle County's $594,550 DPS cap if you're using it, and the 6% math for Wilmington.
6. Settle. Make sure your title company applies the first-time buyer transfer tax reduction if you qualify.

For example, a couple in Dover earning $62,000 a year buys a $240,000 home with a Welcome Home FHA loan. They're inside Dover's 60% to 80% band for two people ($51,720 to $69,000) and well under DSHA's $111,400 Kent County limit. Their FHA loan is $231,600, specifically leaving an $8,400 down payment. Keys4You's 4% adds $9,264 as a deferred loan at a 7.500% first-mortgage rate, covering the down payment. Dover's First Start can cover settlement costs up to $20,000, though no more than 50% of the required down payment ($4,200) can go to the down payment itself. And because neither has owned a home, the transfer tax reduction saves them $1,200 (0.5% of $240,000). If they stay 10 years, the Dover lien is forgiven; the $9,264 DSHA loan is still due when they sell or refinance. Before relying on both, ask the city and the lender to confirm they'll layer.

What to Do If Funds Run Out or You're Denied

Two of Delaware's local programs post their money: Dover had $72,769.57 left on October 23, 2026, and Sussex is in round 5 of its July 1 funding year. Here's what to do if you miss out.

• If Dover's funds run out: the city places qualified buyers on a wait list for the next CDBG round. DSHA's First State and Keys4You don't depend on that money.
• If Sussex's round is exhausted: the county says funds are typically replenished each July 1. Check its page before you sign a contract with a closing date near that cutoff.
• If you're over the Welcome Home limit: look at Open Door, which runs about 20% higher, or check whether the home sits in a targeted tract.
• If your credit is under 620: a HUD-approved counselor can build a plan, and DSHA's announcement notes it offers financial counseling through these counselors. Our guide on how to apply for grants as an individual helps separate real programs from fee-based offers.
• If you need to keep renting: our rental assistance programs guide and HUD income limits guide explain help for renters, and the HUD HOME program guide covers the federal money behind many county homebuyer programs.

For a quick sort of which public programs fit your situation, try the free eligibility checker. It only points you toward official routes and never awards grants or applies for you.

Sources

• Delaware State Housing Authority, Homeownership Loans: Delaware Mortgage Program (opens in a new tab) (checked November 3, 2026)
• DSHA, Interest Rates (opens in a new tab) (as displayed November 3, 2026)
• DSHA, DSHA Enhances, Rebrands Single-Family Mortgage Lending Products (opens in a new tab) (April 16, 2026)
• DSHA, Buy a Home (opens in a new tab) (2025 program results), Housing Counselors (opens in a new tab) and Lenders (opens in a new tab)
• Delaware Code, Title 30, Chapter 54, Realty Transfer Tax (opens in a new tab) (§ 5401 definitions, § 5402(c) first-time buyer reduction)
• City of Wilmington, First Start Homebuyer Program (opens in a new tab) (income limits effective June 1, 2026)
• City of Dover, Community Development (opens in a new tab) (funding as of October 23, 2026), Settlement Assistance Program Guidelines (opens in a new tab) and FY 2026 income limits (opens in a new tab) (effective June 1, 2026)
• New Castle County Department of Community Services, Down Payment Settlement (DPS) Program brochure (opens in a new tab) (June 2026)
• Sussex County, Sussex County Housing Trust Fund: Homebuyer Assistance (opens in a new tab) (round 5 as of July 1, 2026; income limits effective May 1, 2026)
• USDA Rural Development, Single Family Housing Direct Home Loans (opens in a new tab) (Delaware and Maryland office; rate effective November 1, 2026)
• HUD, Loans (FHA) (opens in a new tab)
• VA, VA purchase loan (opens in a new tab)
• U.S. Census Bureau, QuickFacts: Delaware, New Castle, Sussex and Kent counties, Wilmington and Dover (opens in a new tab) (median value of owner-occupied homes, 2020-2024)
• FTC, Government Grant Scams (opens in a new tab)