Delaware DSHA Preferred Plus Program

The Delaware State Housing Authority (DSHA) Preferred Plus Program offers financial assistance to help homebuyers in Delaware reduce the upfront costs of purchasing a home. By providing support for down payments and closing costs, this program makes homeownership more attainable for eligible individuals and families.

Benefits

Offers financial assistance of up to 5% of the total loan amount, which can be used toward down payment and closing costs.
Assistance is provided as a second mortgage, with deferred payments until the home is sold, refinanced, or the primary mortgage is paid off.
Can be combined with DSHA mortgage programs that feature competitive fixed interest rates, ensuring affordable monthly payments.
Available to both first-time and repeat homebuyers who meet program requirements.

Eligibility Requirements

Applicants must qualify for a DSHA first mortgage to access the Preferred Plus assistance.
Income limits apply, varying based on household size and the location of the property being purchased.
The property must be located in Delaware and used as the buyer’s primary residence.
A minimum credit score of 620 is typically required, along with adherence to lender-specific underwriting criteria.
Completion of a DSHA-approved homebuyer education course is mandatory to prepare participants for the responsibilities of homeownership.

Additional Information

The DSHA Preferred Plus Program is a valuable resource for Delaware residents looking to overcome financial barriers to homeownership. Administered by the Delaware State Housing Authority, the program offers vital support to ensure that eligible homebuyers can achieve their dream of owning a home while maintaining financial stability and building long-term equity.

Frequently Asked Questions About Our Program

What is the Delaware State Housing Authority (DSHA) Preferred Plus Program?

The DSHA Preferred Plus Program is a down payment and closing cost assistance initiative that provides eligible homebuyers with a zero-interest second mortgage loan. This loan offers assistance ranging from 2% to 5% of the overall loan amount, helping to make homeownership more accessible.

Who is eligible for the Preferred Plus Program?

Eligibility requires applicants to meet DSHA's income limits, which vary by county and household size. Additionally, a minimum credit score of 620 is necessary, and the maximum loan amount is $417,000. While the program is often utilized by first-time homebuyers, repeat buyers may also qualify.

How does the Preferred Plus assistance work?

The assistance is provided as a zero-interest second mortgage loan, offering 2% to 5% of the total loan amount. These funds can be applied toward the down payment or closing costs, reducing the upfront financial burden for homebuyers.

When is the Preferred Plus loan repaid?

The loan must be repaid upon the sale, transfer, or refinance of the home, or if the property ceases to be the borrower's primary residence. There are no monthly payments or interest charges associated with this loan.

Are there income limits for applicants?

Yes, maximum household income limits apply and vary by county and household size. For example, in New Castle County, the limit is $113,400 for 1-2 person households and $141,750 for households of three or more. In Kent and Sussex Counties, the limits are $99,600 and $124,500, respectively.

Is there a minimum credit score requirement?

Yes, applicants must have a minimum credit score of 620. Those with credit scores below 660 are required to participate in housing counseling to ensure they are well-prepared for homeownership responsibilities.

What types of properties are eligible?

Eligible properties include single-family homes, townhomes, and agency-approved condominiums for FHA, VA, or USDA loans. The property must be located in Delaware and serve as the borrower's primary residence.

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Is homebuyer education required?

Yes, all applicants are required to complete eight hours of HUD-approved homebuyer counseling. This education ensures buyers understand the home-buying process and the responsibilities of homeownership.

Can the Preferred Plus Program be combined with other DSHA programs?

Yes, the Preferred Plus Program can be combined with DSHA's first mortgage programs, such as conventional, FHA, VA, and USDA loans, to provide comprehensive assistance to homebuyers.

Are there any fees associated with the Preferred Plus loan?

Standard loan fees, such as origination and processing fees, may apply. It's advisable to discuss all potential fees with your lender to understand the total cost of the loan.

Is there a purchase price limit for homes?

While there is no specific purchase price limit, the maximum loan amount is $417,000. Buyers should ensure that their desired property's price aligns with this loan amount limit.

Can I use the Preferred Plus Program for a second home or investment property?

No, the program is intended for primary residences only. Applicants must occupy the purchased property as their primary residence.

What happens if I refinance my home?

If you refinance your home, the outstanding balance of the Preferred Plus loan becomes due and payable. It's important to consider this when making decisions about refinancing your property.

Are there specific debt-to-income (DTI) ratio requirements?

While DSHA does not specify exact DTI ratio requirements, individual lenders may have their own criteria. It's essential to consult with your lender to understand the specific DTI requirements applicable to your situation.

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Is mortgage insurance required?

Depending on the type of first mortgage loan and the loan-to-value ratio, mortgage insurance may be required. Your lender can provide specific details based on your loan scenario.

How do I apply for the Preferred Plus Program?

To apply, you must work with a DSHA-approved lender who will guide you through the application process, including verifying eligibility, assisting with necessary documentation, and explaining program requirements.

Is there a deadline to apply for the program?

There is no specific deadline to apply for the Preferred Plus Program. However, program availability is subject to funding, so it's advisable to begin the application process as soon as you are ready to purchase a home.

Are non-occupant co-borrowers allowed?

No, all borrowers must occupy the property as their primary residence. Non-occupant co-borrowers and co-signers are not permitted under this program.

What are the repayment terms for the Preferred Plus loan?

The Preferred Plus loan is a zero-interest, no monthly payment second mortgage. The full amount is due upon sale, transfer, refinance, or if the property ceases to be your primary residence.

Can I use the Preferred Plus Program if I have owned a home before?

Yes, the program is available to both first-time and repeat homebuyers, provided they meet all other eligibility criteria, including income limits and credit score requirements.