Delaware Homeownership Loan Program

What is the Delaware Homeownership Loan Program?

The Delaware Homeownership Loan Program, offered by the Delaware State Housing Authority (DSHA), provides affordable 30-year fixed-rate mortgages to low- and moderate-income homebuyers in Delaware. This program aims to make homeownership more accessible by offering competitive interest rates and various loan options.

Who is eligible for the Homeownership Loan 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. Both first-time and repeat homebuyers may qualify, provided they meet these criteria.

What types of loans are available through this program?

The program offers various loan products, including FHA, VA, USDA, and conventional 30-year fixed-rate loans. This variety allows borrowers to choose the option that best fits their financial situation and homeownership goals.

Are there income limits for applicants?

Yes, income limits apply and vary by county and household size. For example, in New Castle County, the limit is $114,700 for a 1-2 person household and $131,905 for households of three or more. In Kent and Sussex Counties, the limits are $106,300 and $122,245, respectively.

Is there a maximum loan amount?

Yes, the maximum loan amount for DSHA mortgages is $417,000. This cap ensures that the program assists in financing moderately priced homes suitable for low- to moderate-income buyers.

What credit score is required to qualify?

Applicants must have a minimum credit score of 620. Those with credit scores below 660 are required to complete housing counseling to better prepare for successful homeownership.

Is homebuyer education mandatory?

Yes, all borrowers are required to complete a HUD-approved homebuyer education course. This education provides valuable insights into the home-buying process and the responsibilities of owning a home.

Can the Homeownership Loan Program be combined with down payment assistance?

Yes, borrowers can combine the Homeownership Loan Program with DSHA's down payment and closing cost assistance programs, such as the 'Home Sweet Home' and 'First State' DPA programs, to reduce upfront costs.

Are there specific property eligibility requirements?

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.

Is mortgage insurance required?

Depending on the loan type and down payment amount, mortgage insurance may be required. For example, conventional loans with less than a 20% down payment typically require private mortgage insurance (PMI).

Are there any fees associated with the program?

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.

Can I use this program for a second home or investment property?

No, the Homeownership Loan 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, any associated down payment assistance loans may become due and payable. It's important to review the terms of your assistance programs and consult with your lender before refinancing.

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.

How do I apply for the Homeownership Loan 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 Homeownership Loan 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 current interest rates offered?

Interest rates are posted daily by 10:00 AM Delaware time and are subject to change. It's recommended to check the current rates with your DSHA-approved lender or on the DSHA lender portal.

Can I use the program if I have owned a home before?

Yes, the 'Home Again' program is available for repeat homebuyers who do not meet the first-time homebuyer criteria, provided they meet all other eligibility requirements.