If you're buying your first home in Delaware, you're in a great position. The First State offers some of the most generous first-time buyer programs on the East Coast—from down payment assistance you may not have to repay to low-interest mortgage options designed to make homeownership more accessible.
Whether you're looking in Wilmington, Newark, Middletown, or anywhere in between, this guide breaks down the top programs available in 2026.
What Qualifies You as a "First-Time Buyer" in Delaware?
You don't have to be buying your very first home ever.
In Delaware, you're considered a first-time buyer if you haven't owned a primary residence in the past three years. So if you owned a home in the past but have been renting recently, you may still qualify for these programs.
DSHA Preferred Plus Program
The Delaware State Housing Authority (DSHA) offers one of the most widely used programs for first-time buyers: the Preferred Plus program.
Here's what it includes:
- Below-market interest rates on 30-year fixed mortgages
- Up to 5% of the loan amount in down payment and closing cost assistance
- Assistance is structured as a second mortgage at 0% interest, deferred for 30 years (no monthly payments required)
- Available for homes up to $510,000 (2026 limit)
- Income limits apply, but many moderate-income households qualify
How to access it: You'll need to work with a DSHA-approved lender. We can connect you with lenders who specialize in this program.
Welcome Home Grant
DSHA also offers the Welcome Home Grant, which can be layered on top of other programs.
- Up to $10,000 as a true grant (no repayment required)
- Can be combined with the Preferred Plus program
- Available for homes in targeted areas (including many parts of Wilmington and other Delaware communities)
- Additional grant amounts may be available for veterans and active-duty military
FHA Loans
FHA loans aren't specific to Delaware, but they're one of the most popular options for first-time buyers due to their flexibility.
- Down payments as low as 3.5%
- Credit scores starting around 580 (some lenders allow 500 with 10% down)
- More forgiving of past credit issues like collections or late payments
- Mortgage insurance is required but built into the monthly payment
- Can be combined with DSHA down payment assistance
USDA Loans — Zero Down Payment
If you're open to buying in more suburban or rural areas, a USDA loan can be a great option.
- No down payment required (100% financing)
- Below-market interest rates
- Lower mortgage insurance costs compared to FHA
- Eligible areas include much of Kent County, Sussex County, and southern New Castle County (including Middletown and Townsend)
- Income limits apply based on household size
Many buyers are surprised to learn that areas just 20–30 minutes outside Wilmington still qualify.
VA Loans — For Those Who Served
If you're a veteran, active-duty service member, or eligible surviving spouse, VA loans offer some of the best financing available.
- No down payment required
- No mortgage insurance (PMI), which can significantly reduce your monthly payment
- Highly competitive interest rates
- Flexible credit guidelines
VA loans are widely accepted by sellers across Delaware and are a powerful benefit for those who qualify.
Delaware Transfer Tax Savings for First-Time Buyers
Delaware has a 4% real estate transfer tax, typically split between the buyer and seller (2% each).
However, first-time buyers receive a major benefit:
- Exempt from their portion of the transfer tax on homes up to $400,000
- Potential savings of $6,000–$8,000 at closing
- Applied automatically and handled by your settlement attorney
This is one of the biggest financial advantages of buying in Delaware compared to nearby states like Pennsylvania or Maryland.
Getting Pre-Approved: Your First Step
Before you start touring homes, getting pre-approved is key.
Most lenders will ask for:
- Last two years of tax returns (W-2s and/or 1099s)
- Recent pay stubs (typically the last 30 days)
- Bank statements (last 2–3 months for all accounts)
- Photo ID
- Social Security number for a credit check
Pre-approval usually takes 24–48 hours and gives you a clear budget. It also makes your offer much stronger when you find the right home.
How The Hoesterey Group Helps First-Time Buyers
We specialize in helping first-time buyers navigate the process from start to finish.
Our team will:
- Connect you with DSHA-approved lenders who can maximize your available assistance
- Walk you through each program and help you stack benefits (Preferred Plus, Welcome Home Grant, transfer tax savings)
- Tour homes with you and help you evaluate neighborhoods, schools, and commute
- Negotiate on your behalf to secure the best price and terms
- Guide you through closing so there are no surprises
Buying your first home should feel exciting—not overwhelming. That's exactly what we're here to help you do.
Ready to explore your options? Contact us for a free consultation.