Delaware First-Time Home Buyer Programs of 2021

By NerdWallet 
Edited by Alex Richards

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Buying a home is expensive, but first-time home buyers can use programs from the Delaware State Housing Authority, or DSHA, to put home ownership within reach.

First-time home buyers in Delaware can also take advantage of several national loan programs that feature relaxed credit score requirements or a lower minimum down payment. Explore all the options available for buying your first home in Delaware.

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National first-time home buyer programs

Available through many mortgage lenders, these loans allow a lower credit score and smaller down payment, which can be helpful for first-time home buyers.

Conventional mortgage

Best for:

Low down payments, limited mortgage insurance premiums

What you need to know:

A conventional mortgage is a home loan that isn’t guaranteed or insured by the federal government. Conventional mortgages that conform to the requirements set forth by Fannie Mae and Freddie Mac allow down payments as low as 3% for first-time buyers or lower-income home buyers. Unlike FHA loans, conventional loans allow borrowers to eventually cancel their mortgage insurance or avoid mortgage insurance altogether if they put at least 20% down.

VA loans

Best for:

Military, low down payments

What you need to know:

The U.S. Department of Veterans Affairs helps service members, veterans and surviving spouses buy homes. VA loans are especially generous, providing competitive interest rates, often requiring no down payment or mortgage insurance. Although there is no official minimum credit score, most VA-approved lenders require scores of at least 640.

FHA loans

Best for:

Low credit score, low down payments

What you need to know:

This is the go-to program for many first-time home buyers with lower credit scores. The Federal Housing Administration allows down payments as low as 3.5% for those with credit scores of 580 or higher. The FHA will insure loans for borrowers with scores as low as 500 but requires a 10% down payment for a score that low. Mortgage insurance is required for the life of an FHA loan and cannot be canceled.

USDA loans

Best for:

Low down payments, rural home buyers

What you need to know:

A USDA home loan is a zero-down-payment mortgage for eligible rural and suburban home buyers. USDA loans are issued by the U.S. Department of Agriculture through the USDA Rural Development Guaranteed Housing Loan Program. There are income limitations, which vary by region. Applicants with credit scores of 640 or higher receive streamlined processing. Those with scores below that must meet more stringent underwriting standards.

DSHA highlights and eligibility requirements

Qualified Delaware residents, including current homeowners, can use DSHA programs to make home buying more affordable.


  • Open to repeat and first-time home buyers.

  • All loans feature 30-year, fixed-rate terms.

  • Down payment and closing cost assistance available.

  • Tax credit available to first-time home buyers.


  • Household income and loan limits apply.

  • 620 minimum credit score.

  • Housing counseling required for some borrowers.

DSHA first-time home buyer loan programs

Preferred Plus loan

Best for:

Low mortgage rates, down payment assistance, closing cost assistance

What you need to know:

This program helps buyers finance a home purchase in the state of Delaware. With a Preferred Plus loan, borrowers get a competitive interest rate on an FHA, VA, USDA or conventional mortgage.

Borrowers who qualify for a Preferred Plus loan can also get help with their down payment and closing costs. Assistance is provided in the form of a no-interest second mortgage for up to 5% of the total mortgage amount. This loan doesn’t need to be paid back unless the borrower refinances the primary mortgage, sells the property or no longer lives in the home. Accepting down payment assistance through the program will typically result in a higher mortgage interest rate.

First-time home buyer tax credit

Best for:

Tax credits

What you need to know:

This program provides a federal tax credit of up to $2,000 per year to buyers who haven’t owned a home in the past three years. Veterans and those who purchase in certain areas may be exempt from the three-year requirement. Borrowers using this tax credit may incur an application or issuance fee.

Explore mortgages today and get started on your homeownership goals
Get personalized rates. Your lender matches are just a few questions away.
Won’t affect your credit score

Summary: 2021 Delaware first-time home buyer programs

  • Preferred Plus loans with down payment and closing cost assistance.

  • An annual tax credit of up to $2,000 for first-time home buyers.

Now that you’ve been introduced to a few of the first-time home buyer programs available in Delaware, it’s time to take action. Visit the DSHA's "kiss your landlord goodbye" website to get more details on how these programs can help you.

Keep in mind that DSHA doesn’t approve loans or lend money directly; it relies on a network of participating lenders for that. When you’re ready to apply, reach out to one of these lenders to get started.

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