How much does Delaware down payment assistance actually cost?
Delaware's DSHA programs give first-time buyers a zero-interest second loan worth 3%, 4%, or 5% of their mortgage — but every tier raises the interest rate on the first mortgage. On a $240,000 Wilmington home, the full 5% through Take5 puts $11,580 in your pocket at closing and costs about $148 more per month, or roughly $53,000 over thirty years, compared with the no-assistance Smart Start loan. Whether that's a good trade depends entirely on whether you have the cash sitting in savings right now.
By David Sordelet | September 1, 2026
Here's something most Delaware buyers don't find out until they're already sitting across from a lender: the state will help you with your down payment, and that help isn't free.
It isn't a scam, and it isn't a catch buried in fine print. It's a straightforward trade — cash today in exchange for a higher rate for thirty years. But almost nobody explains it that way, so buyers pick the biggest number on the menu and never find out what it cost them.
Let's fix that.
The menu, in plain English
DSHA rebranded everything in April 2026. What used to be "Kiss Your Landlord Goodbye" is now the Delaware Mortgage Program, split into two tracks: Welcome Home for first-time buyers and Open Door for repeat buyers.
Under each track, you pick one option:
- Smart Start — no assistance at all, and the lowest rate of the group. This is the one loan officers used to call "the unassisted loan."
- First State — a second loan worth 3% of your mortgage.
- Keys4You — 4%.
- Take5 — 5%. First-time buyers only.
- Diamond in the Rough — 5% plus FHA 203(k) renovation financing, for a home that needs work.
Every one of those second loans carries zero interest and requires no monthly payment. That part is genuinely great.
But read this next sentence twice, because people get it wrong constantly: those second loans are deferred, not forgiven. You pay them back when you sell, refinance, or stop living in the home. The money is patient. It is not a gift.
Now here's the part nobody shows you
Each step up the assistance ladder costs you rate. As of this writing, DSHA's published rates for first-time buyers using FHA, VA, or USDA financing look like this:
| Option | Rate | Assistance |
|---|---|---|
| Smart Start | 5.375% | none |
| First State | 5.625% | 3% |
| Keys4You | 5.875% | 4% |
| Take5 | 6.375% | 5% |
Take5 costs a full percentage point more than Smart Start. So let's put real numbers on it.
The median home sold in the City of Wilmington over the past year went for $240,000 — that's 828 closed sales, moving in a median of 17 days at 100% of asking. With FHA financing at 3.5% down, you're borrowing $231,600.
- Smart Start at 5.375%: $1,297 a month in principal and interest. No help with your down payment.
- Take5 at 6.375%: $1,445 a month. But $11,580 toward your down payment and closing costs.
That's $148 more every month. Over the full thirty years, about $53,000 — to borrow $11,580 today.
Put that way, Take5 sounds like a bad deal. Sometimes it is. If you've got $20,000 in savings and a stable job, take Smart Start and keep the lower rate. That's the honest answer, and it's the one I give clients regularly. (Still building that cushion? Here's where to keep your down payment savings while you do.)
But flip it around. If you don't have that cash, your alternative isn't Smart Start — it's renting for another two or three years while you save. In a market where New Castle County prices rose 4% year over year, waiting has a price too. Take5 isn't competing with a better loan. It's competing with not buying at all.
That's the actual decision. Not "which program is best," but "what does waiting cost me?"
What this looks like across Delaware
Where you buy changes the math more than most people expect — and probably not in the direction you'd guess.
| Market | Median sold | Sales | Local program on top of DSHA | Forgivable? |
|---|---|---|---|---|
| New Castle County, outside Wilmington | $410,000 | 4,643 | County DPS — up to $10,000 | No — repaid over 15 years |
| City of Wilmington | $240,000 | 828 | First Start — 6% of price, up to $15,000 | Yes, at 10 years |
| Kent County | $345,000 | 2,232 | Dover First Start — up to $20,000 | Yes, at 10 years |
| Sussex County | ~$450,000 | 5,856 | Housing Trust Fund — $10,000 to $30,000 | Yes, at 10 years |
Look at those first two rows. They're the same county.
The median home in New Castle County outside the city sold for $410,000. Inside Wilmington city limits, $240,000. Same county, same year, a $170,000 gap — the city is 41% cheaper than everything around it.
In monthly terms, at the same Smart Start rate, that's roughly $2,216 a month versus $1,297. Nine hundred and nineteen dollars, every month, for crossing a municipal line.
And the city is where the most generous local program in northern Delaware happens to be. Wilmington gives you $15,000 that's forgiven; the surrounding county gives you $10,000 you have to pay back over fifteen years.
That's not me telling you where to live. Plenty of people want a yard, a garage, and a shorter commute to somewhere the city doesn't serve, and those are good reasons. But if the number is what's stopping you, you should at least know the number.
Then there's Kent. Kent County's median is more than $100,000 above the City of Wilmington's. If your plan was to head south to find something affordable, the numbers don't support it — I dug into that comparison in New Castle County vs. Kent County: which gives you more house for your money.
Sussex is a different animal entirely. Across 5,856 closed sales over the past year, the median landed near $450,000 — and it barely moved between the busy season and the quiet one, which tells you demand down there isn't just summer traffic.
Here's where I have to be straight with you about Sussex. A $450,000 purchase with Take5 financing runs about $2,709 a month in principal and interest, and closer to $3,400 once you add taxes, insurance, and mortgage insurance. DSHA's income limit in Kent and Sussex is $111,400 for a one-to-two person household.
Do that math and you'll see the problem: a household earning right at the ceiling can just barely reach the median Sussex home, and only by stretching. In Sussex, these programs work below the median, not at it. Think Seaford, Laurel, Georgetown, and Milford rather than Lewes or Bethany.
That's not a knock on the programs. It's just what the numbers say, and you deserve to know it before you fall in love with a coastal listing.
New construction is a big part of what's happening down south right now, and it complicates how you should read that number. A new build settles when the builder finishes it, not when buying season peaks — so a stretch of strong winter closings may reflect a wave of homes coming out of construction more than it reflects a surge of winter demand. Either way, the takeaway for you is the same: waiting for a soft off-season in Sussex is a strategy that hasn't paid off lately.
That matters for your financing in two ways. DSHA loans can be used on new construction, and builders in Sussex are often willing to contribute toward closing costs, which pairs unusually well with Smart Start: let the builder cover the cash gap and keep the lower rate for yourself, instead of buying assistance with a full point. It's worth asking about before you commit to a tier.
The catch is that new construction tends to price above the resale median, which pushes coastal communities further out of range for a buyer working inside the income limit. The inland side of the county is where new construction and these programs actually meet.
The local layer is where the real money is
The state program is only half of it. Each county has its own assistance that stacks on top of DSHA — and the stacking is the part that surprises people.
Read the terms, though, because they are not all the same animal. Wilmington, Dover, and Sussex all forgive their assistance after ten years of living in the home. New Castle County's Down Payment Settlement program does not — its $10,000 is a deferred loan you repay over fifteen years after an initial two-year deferral. Still useful, still cheap money. Just not free money, and the difference is worth knowing before you sign.
Most assistance programs also can't be combined, because every lender wants second lien position and there's only one to go around. Wilmington's First Start and Dover's First Start will both accept third position. That's a technical detail with a very unglamorous name and a very real consequence: it means you can layer them under a DSHA second loan.
On that median $240,000 Wilmington home, stacking Take5 with First Start looks like this:
- DSHA Take5: $11,580
- Wilmington First Start: $14,400
- Total: $25,980
You'd need roughly $15,600 to close on that house. The assistance covers it with about $10,000 to spare — and $14,400 of it is forgiven outright after ten years of living there.
That is not a rounding error. That's most of a down payment, on a home selling at full asking price in about two weeks.
The rules that quietly disqualify people
Every one of these is fixable if you know about it early, and expensive if you don't.
Counseling has to happen before you sign. Wilmington's First Start requires HUD-certified homebuyer counseling completed before you sign a sales contract. Not before closing. Before the contract. People blow this one all the time and lose $15,000 over a scheduling mistake.
Credit tiers matter at 659. DSHA's minimum is a 620 score. But if you're between 620 and 659, you'll need an eight-hour HUD-approved counseling course. At 660 and above, you skip it. If you're sitting at 655, it may be worth a few months of work.
"First-time buyer" means different things in different programs. DSHA's Welcome Home track and Wilmington's First Start generally look back three years. Delaware's separate transfer tax exemption uses a stricter standard. Don't assume that qualifying for one means qualifying for the other — verify each one individually.
Your mailing address is not your city. This one costs people real money. Plenty of homes in 19803, 19807, and 19808 say "Wilmington, DE" on the envelope and sit entirely outside city limits. Those homes do not qualify for Wilmington First Start. Same trap applies around Dover. Check the municipal boundary, not the postmark.
Two programs are currently out of money. Home Sweet Home and the Delaware Diamond program for essential workers have no funding right now and no announced plans to refund. If a blog post from two years ago sent you chasing one of those, that's why you couldn't find it.
The price caps almost never bind. DSHA's limit is $659,385 in New Castle County and $566,354 in Kent and Sussex. The median detached home in New Castle County sold for $470,000. Most buyers who assume the house is too expensive for these programs are wrong, and never bother to check.
So which one should you take?
There's no universal answer, and anyone who gives you one is guessing.
The real question is a personal one: how much cash do you actually have, how stable is your income, and what would another two years of renting cost you in this market? A buyer with savings should almost always take Smart Start and the lower rate. A buyer who's been renting for six years and can't get past the down payment should probably take the assistance and stop waiting.
Rates move, funding runs out, and program rules change — the April 2026 rebrand is proof of that. Confirm current numbers with DSHA and a participating lender before you make a decision on anything you read here, including this post.
This is exactly the conversation I have with first-time buyers before we look at a single house. Getting the financing structure right ahead of time is worth more than winning a negotiation later — the same way it pays to know whether an attorney or a title company handles your closing before you're sitting at the table.
Frequently Asked Questions
Do I have to pay back DSHA down payment assistance?
Yes. The DSHA second loans — First State, Keys4You, and Take5 — are zero-interest and require no monthly payment, but they're deferred, not forgiven. You repay the balance when you sell, refinance, or stop using the home as your primary residence. The separate city and county programs, like Wilmington First Start, are forgivable after ten years of occupancy.
Can I combine DSHA assistance with Wilmington's First Start program?
Yes, and it's one of the few combinations that works. Wilmington First Start will take third lien position, which lets it sit underneath a DSHA second loan. On a median-priced Wilmington home, stacking Take5 with First Start comes to roughly $25,980 in combined assistance.
What credit score do I need for a DSHA loan in Delaware?
The minimum is 620, or 660 for a manufactured home. If your score falls between 620 and 659, you'll have to complete an eight-hour HUD-approved housing counseling course before closing. At 660 or above, no counseling is required.
Am I still a first-time buyer if I owned a home years ago?
Often, yes. Most Delaware programs, including DSHA's Welcome Home track and Wilmington First Start, define a first-time buyer as someone who hasn't owned a primary residence in the past three years. Delaware's transfer tax exemption uses a stricter standard, so check each program separately rather than assuming.
Is my house too expensive to qualify for DSHA?
Almost certainly not. The purchase price cap is $659,385 in New Castle County and $566,354 in Kent and Sussex. With the median detached home in New Castle County selling around $470,000, the cap rarely comes into play — this is the most common reason buyers rule themselves out for no reason.
Delaware will genuinely help you buy a house. Just go in knowing that the biggest number on the menu isn't automatically the best one for you, and that the right answer depends on cash you have, not cash you wish you had.
If you're buying and selling at once, start with what selling actually costs in Delaware. And if you want to know where you actually stand — what your current home is worth, how much equity you've built, and what prices and inventory are doing in your neighborhood — request your free Home Equity Report at search.teamsordelet.com/seller.
About David Sordelet
Looking for a trusted real estate professional in Delaware or Maryland who can help you make smart choices? Look no further than David Sordelet, Designated Broker of Real Broker Delaware and Team Leader of Team Sordelet.
With over two decades of experience, 1,000+ successful transactions, and 200+ five-star client reviews, David is recognized as one of the region's leading real estate experts. Licensed as an Associate Broker in Delaware and an Agent in Maryland, he provides unmatched knowledge of Wilmington, Newark, Hockessin, Dover, Middletown, and the Maryland Eastern Shore.
David understands that in real estate, who you work with matters most. That's why he combines personalized service, clear communication, and expert negotiation with the most modern marketing strategies and cutting-edge technology to achieve exceptional results for his clients.
Whether you're a first-time homebuyer, a move-up family, an investor, or a seller looking to maximize value, David Sordelet is the proven real estate professional you can count on.
License: RB-0031238-DE / 5013138-MD
Not affiliated with, endorsed by, or sponsored by the Delaware State Housing Authority or the City of Wilmington. Program names and logos are referenced for identification only.
Sources: Delaware State Housing Authority published rates and program guidelines; Bright MLS closed sales data, New Castle County (excluding the City of Wilmington), City of Wilmington, Kent County, and Sussex County, 365 days ending August 2026; Bright Research New Castle County Housing Market Report, July 2026. Rates and program terms change — verify current figures with DSHA and a participating lender.
