First State Home Loan — 3% DPA
Provides 3% of the loan amount as a deferred, 0% interest second mortgage. Repayable only at sale, refinance, or if the home is no longer your primary residence. Works with FHA, VA, USDA, and conventional loans.
The Short Answer
Delaware First-Time Homebuyer Programs: What's Available in 2026
Delaware's State Housing Authority (DSHA) offers down payment assistance of 2%–5% of the loan amount, available in all three counties, with no monthly payments on the second mortgage.
In 2025, 1,593 Delaware families used DSHA programs to purchase homes. The assistance comes as a deferred second mortgage at 0% interest — meaning you don't pay it back monthly. It's due only when you sell, refinance, or move out. First-time buyers who qualify for the Diamond in the Rough program can receive a fully forgivable $15,000 if they stay in the home for 10 years.
DSHA Program Lineup
The Four Main DSHA Down Payment Assistance Programs
All programs are deferred second mortgages at 0% interest — no monthly payments.
Keys4You — 4% DPA
Provides 4% of the loan amount under the same deferred 0% structure. Welcome Home loan program. Available in all three Delaware counties with income limits based on household size.
Take5 — 5% DPA
The maximum DSHA assistance at 5% of the loan amount. Paired exclusively with the Welcome Home loan program. Same deferred, 0% interest terms. Best for buyers who need maximum down payment help.
Diamond in the Rough — Up to $15,000 Forgivable
For essential workers: veterans, education, medical, first responders, grocery workers, and state employees. Provides a $15,000 second mortgage that is fully forgivable at 10 years. Can also pair with an FHA 203(k) renovation loan.
By The Numbers
Key Numbers for Sussex & Kent County Buyers
Income and purchase price limits as of 2026 — verify current figures at destatehousing.com
0
Delaware Families Helped in 2025
DSHA official site
0
Welcome Home Income Limit (1–2 person)
Sussex & Kent, 2026
0
Max Purchase Price
Sussex & Kent non-targeted areas
0
Mortgage Tax Credit (Max)
35% of annual interest, every year
County-Level Assistance
Sussex County Housing Trust Fund: Extra Help for Local Buyers
A separate county-level program that can be stacked on top of DSHA assistance.
The Sussex County Housing Trust Fund provides a soft second mortgage at 0% interest for buyers earning less than 120% of the Area Median Income (AMI) for Sussex County. Unlike some grants, repayment is prorated — meaning you only pay back a portion if you sell before a set period.
The fund is replenished annually on July 1 and is available first-come, first-served. Round 4 funding was available as of July 1, 2025. Buyers who act shortly after July 1 each year have the best chance of accessing funds.
- Must earn less than 120% AMI for Sussex County
- 0% interest soft second mortgage
- Prorated repayment only if sold before program term ends
- Funds replenish annually on July 1 — first-come, first-served
- Can be stacked with DSHA state programs
Do You Qualify?
Requirements to Access DSHA Programs
Most buyers are surprised how accessible these programs are — the biggest barriers are credit score and income limits.
Credit Score
Minimum 620 to qualify. Scores below 649 require completion of 8 hours of HUD-approved housing counseling before closing. PRMI Empower has no income limits and is more flexible on credit profiles.
Income Limits
Welcome Home: $108,800 for 1–2 person households; $125,120 for 3+ person households (Sussex & Kent, 2026). PRMI Empower has no income limits. Open Door has higher limits — check DSHA for current figures.
Common Denial Reasons
Income exceeds program limits; credit score below 620; purchase price exceeds $544,232; property doesn't meet HUD requirements; borrower not using a DSHA-approved lender. Must use an approved lender to access all programs.
Common Questions
First-Time Homebuyer Program FAQ
Yes, in most cases — but not monthly. The assistance is a deferred second mortgage at 0% interest, repayable only when you sell the home, refinance, or it is no longer your primary residence. The Diamond in the Rough program is fully forgivable if you stay 10 years.
Yes. DSHA programs are designed to be paired with FHA, VA, USDA, and conventional loans. The first mortgage and the DSHA second mortgage work together. Your DSHA-approved lender will coordinate both.
Targeted areas are designated census tracts with higher income limits and higher purchase price limits. If the home you want to buy is in a targeted area, you may qualify even if your income is above the standard limit. Ask your lender to check the specific address.
The MCC is a federal tax credit of up to 35% of your annual mortgage interest, with a $2,000/year maximum. Unlike a deduction, it's a direct credit off your federal tax bill — every year you hold the mortgage. It can be combined with DSHA down payment assistance.
Only for borrowers with credit scores below 649. You must complete 8 hours of HUD-approved housing counseling before closing. This is actually useful — many buyers find it helps them understand the process and avoid common mistakes.
You must be purchasing a Delaware home as your primary residence. You don't need to currently live in Delaware, but the home must become your principal residence after closing.
Contact Us
We'd love to hear from you. Send us a message and we'll respond as soon as possible.
Program Eligibility Review
We'll match you to the right DSHA program — First State, Keys4You, Take5, or Diamond in the Rough — based on your income, credit score, and target price range.
Real Payment Estimates
See what your monthly payment actually looks like with DPA stacked — including principal, interest, taxes, insurance, and any HOA fees.
Homes That Fit Your Budget
We search active Sussex County listings filtered to your DSHA-eligible price range, so you're looking at homes you can actually buy.