Delaware First Time Home Buyers have many options to choose from in 2024 when it comes to selecting a mortgage loan and a mortgage lender to help them obtain financing to purchase a home in Delaware. There are also various Delaware Down Payment Programs to help first time buyers with the required down payments and closing costs. Call 302-703-0727 to Apply for a First Time Home Buyer Program or for more information. You can also APPLY ONLINE today.
Delaware First Time Home Buyers Mortgage Loan Programs for 2024
First Time Home Buyers in Delaware have four basic mortgage loan products to choose from when purchasing a home in Delaware. The best first time home buyer mortgage loan to select depends on several factors such as:
- Credit Score
- House Hold Income
- Debt to Income Ratio
- How much money you have for down payment
- Monthly Payment that fits your budget.
These factors together help to determine which Delaware Mortgage Loan will be the best option for you to choose. The four basics mortgage loan programs to choose from our as follows:
- Delaware FHA Loan
- Delaware USDA Rural Housing Loan
- Delaware Veterans Loan
- Delaware Conventional Loan
How Much Down Payment Does a First Time Home Buyer Need?
If you are looking for a 100% financing then the only two options available are the Veterans Loan and the USDA Rural Housing Loan. They both require $0 down from the borrower and if you have a good Delaware Real Estate Agent, then you should be able to get the seller to pay most of your closing costs so you may be able to purchase a home with as little as $1,000 to $1,500 out of pocket.
The next best option for spending the least amount of money on a down payment for the purchase of a home is the FHA Loan or the 97% Conventional Loan. The FHA Loan only requires a minimum down payment of 3.5% of the purchase price. For example, if you are purchasing a home for $200,000 then you would be required to put down 3.5% of the purchase price which is a $7,000 down payment. The FHA Loan allows your real estate agent to negotiate up to 6% from the seller toward your closing costs and pre-paid items.
The 97% Conventional Loan has two options for Delaware First Time Home Buyers: FNMA Home Ready Program and the FRMC Home Possible Program. The HomeReady and the Home Possible both only require a 3% down payment so if you are purchasing a home for $200,000 then your will only need $6,000 for the down payment. The 97% Conventional Loan only allows your real estate agent to negotiate 3% from the seller toward closing costs pre-paid items.
What Delaware Down Payment Assistant Programs are Available for First Time Home Buyers in 2024?
First Time Home Buyers in Delaware have several Down Payment Assistance Programs (DPA) to choose from when purchasing a home. Delaware DPA Programs have different requirements depending on which program you choose. The available depend on the county in which the property your are purchasing is located. The first time home buyer programs in Delaware can run out of money so you must check to make sure the program you are interested in using still has funds available. Call 302-703-0727 to apply for a Delaware Down Payment Assistance Program or APPLY ONLINE
New Castle County Delaware Down Payment Assistance Programs:
- New Castle County DPS
- New Castle County IDEA (No Longer Available)
- New Castle County Revamp (No Longer Available)
- New Castle County VHAP (No Longer Available)
- PRMI Welcome Home Down Payment Program
- PRMI Dream Maker Down Payment Program
- PRMI DPA Advantage 6.5% Grant Program
- City of Wilmington First Start Homebuyer Program
- City of Wilmington Employee Home Buyer Assistance Program
- City of Newark DPA
- City of Newark POOH Program
- DSHA First State Home Loan DPA Program
- DSHA Delaware Diamond DPA Program
- DSHA Home Sweet Home DPA Program (Currently Out of Funds)
- DSHA Homes for Grads Program (Currently Suspended)
- DSHA Preferred Plus Down Payment Program (Program NO LONGER AVAILABLE!)
- DSHA SMAL Loan Program (Program NO LONGER AVAILABLE!)
- DSHA Advantage 4 Grant Program (Program NO LONGER AVAILABLE!)
Kent County Delaware Down Payment Assistance Programs:
- PRMI Welcome Home Down Payment Program
- PRMI Dream Maker Down Payment Program
- PRMI DPA Advantage 6.5% Grant Program
- City of Dover First Start Program
- Dover NSP Program
- DSHA First State Home Loan DPA Program
- DSHA Delaware Diamond DPA Program
- DSHA Home Sweet Home DPA Program (Currently Out of Funds)
- DSHA Homes for Grads Program (Currently Suspended)
- DSHA Preferred Plus Down Payment Program (Program NO LONGER AVAILABLE!)
- DSHA SMAL Loan Program (Program NO LONGER AVAILABLE!)
- DSHA Advantage 4 Grant Program (Program NO LONGER AVAILABLE!)
Sussex County Delaware Down Payment Assistance Programs:
- Sussex County Housing Trust Fund DPA
- PRMI Welcome Home Down Payment Program
- PRMI Dream Maker Down Payment Program
- PRMI DPA Advantage 6.5% Grant Program
- DSHA First State Home Loan DPA Program
- DSHA Delaware Diamond DPA Program
- DSHA Home Sweet Home DPA Program (Currently Out of Funds)
- DSHA Homes for Grads Program (Currently Suspended)
- DSHA Preferred Plus Down Payment Program (Program NO LONGER AVAILABLE!)
- DSHA SMAL Loan Program (Program NO LONGER AVAILABLE!)
- DSHA Advantage 4 Grant Program (Program NO LONGER AVAILABLE!)
The down payment assistance programs require Delaware First Time Home Buyers to complete 8 hours of HUD approved home buyer counseling with a HUD approved counseling agency by attending a Delaware First Time Home Buyer Seminar.
Can a First Time Home Buyer Purchase a Home that needs repairs in Delaware?
First Time Home Buyers in Delaware can purchase homes that require repairs or renovations in order to meet minimum property eligibility guidelines using a renovation loan program. There are two options for purchasing homes that needs repairs in Delaware: FHA 203k Rehab Loan and Conventional HomeStyle Renovation Loan. These loan programs will lend you the money to purchase the home and to fix it up all in one mortgage loan. There is still a required down payment on each loan type but down payment is based on purchase price plus the rehab amount not just the purchase price.
Are there First Time Home Buyer Tax Credits in Delaware?
The Delaware Mortgage Credit Certificate Program through Delaware State Housing Authority (DSHA) provides a Delaware First Time Home Buyer Tax Credit of up to $2,000 a year for every year that you have the mortgage. You must enroll in the program through a Delaware approved mortgage company such as Primary Residential Mortgage. If you use an out of state lender or an internet lender you will not be eligible for the program and you CANNOT enroll in the program after you have already bought your house. You must enroll with your lender during the mortgage process of purchasing your first home. Call 302-702-0727 to speak to a First Time Home Buyer Tax Credit Specialist.
Can a Delaware First Time Home Buyer Finance Their Closing Costs?
A home buyer cannot finance the closing costs into their loan because the maximum loan is based on a percentage of the purchase price. For Example: FHA will allow home buyers to finance up to 96.5% on a purchase of their first home. So if home is being bought for $100,000 and the closing costs are $5,000 then the FHA home buyer can borrower $96,500. The home buyer will need the $3,500 down payment plus the $5,000 closing costs.
Now a way to “finance” the closing costs is to increase the purchase price and have the seller pay that amount toward the buyer’s closing costs. This process is called Seller Paid Closing Costs. For our example above the buyer could offer the seller $105,000 as the sale price and have the seller pay $5,000 toward the buyer’s closing costs. This would allow the buyer to only have to come up with their 3.5% down payment and the closing costs are now essentially included in the higher loan amount based on 96.5% of the $105,000 purchase price.
There is one exception to this rule, a buyer using a USDA Rural Housing Loan can finance the closing costs if the property appraises for more than the purchase as USDA will allow you to borrower up to 100% of the purchase or appraised value if higher. For example if purchasing home for $100,000 and the home appraised for $105,000 then the buyer could borrower $105,000 and essentially finance their closing costs.
4 Common Myths About Home Buying
Myth 1 – It is impossible to buy a home today with less than perfect credit (False)
Myth 2 – 30 Year Fixed Rate Mortgages are always the best (False – Depends on Your Situation)
Myth 3 – The Lender with the Lowest Interest Rate is always the best choice (False)
Myth 4 – Affordable means anything that keeps your debt to income ratio below 36% (False)
