For many homebuyers across Delaware, qualifying for a mortgage isn’t the hardest part of buying a home; it’s coming up with the cash needed for the down payment and closing costs. Even buyers with steady income and solid credit often find that upfront costs delay their plans for homeownership.
The First State Home Loan from the Delaware State Housing Authority helps solve that problem by offering below-market fixed-rate mortgages paired with down payment assistance that reduces the upfront cash needed to buy a home.
What This Program Offers
The First State Home Loan provides financial assistance specifically designed to lower the cash required at closing while offering competitive mortgage terms.
Key program benefits include:
- 30-year fixed-rate mortgage with interest rates at or below market rates
- 3% of the final loan amount available for down payment and closing costs
- Assistance is structured as a deferred second loan
- No monthly payments required on the assistance
- Repayment is deferred until sale, refinance, transfer, or when the home is no longer a primary residence
- Compatible with conventional, FHA, VA, and USDA loans
Because the assistance is deferred, buyers can reduce their upfront costs without increasing their monthly payment burden.
Who This Program Is Designed For
The First State Home Loan is designed for buyers who are ready to purchase a home but need support covering upfront expenses.
This program may be a good fit for:
- First-time homebuyers (through the Welcome Home program)
- Repeat buyers (through the Home Again program)
- Households with moderate income levels
- Buyers who want to minimize upfront costs while maintaining manageable monthly payments
The program is available statewide, with expanded flexibility in designated targeted areas.
Eligibility Snapshot
While exact limits vary depending on location and household size, typical program guidelines include:
- Minimum credit score of 620 (housing counseling required for scores below 660)
- Meeting household income limits based on county and household size
- Meeting purchase price limits based on location (higher limits in targeted areas)
- Purchase of a primary residence in Delaware
- Eligibility for both first-time and repeat buyers depending on program structure
In targeted areas, income and purchase price limits are higher, and first-time buyer requirements may not apply.
Who Should Take Action
Buyers who are financially prepared to purchase a home but want to reduce upfront costs without increasing monthly payments should consider exploring this program.
For many households, having access to deferred assistance, combined with below-market interest rates, can make homeownership more affordable and achievable.
What to Do Next
If you’re considering buying a home in Delaware, ask a participating lender about the First State Home Loan from the Delaware State Housing Authority. A lender can help you determine eligibility, explain how the deferred assistance works, and identify whether you qualify under the Welcome Home or Home Again programs.
The First State Home Loan is one of several programs available through DSHA. Depending on your financial situation and where you’re buying, there may be additional assistance options that can further reduce your upfront costs.
Visit HomebuyerWallet.com to explore other homebuyer programs that may be available to you.
