The American Dream of owning a home seems to be slipping away. The ability for people to save money for a down payment and closing costs has become more difficult as the cost of everything is going up. Even being able to qualify for a home can be difficult. This is why the Delaware State Housing Authority offers many programs to assist first time home buyers with down payment, closing costs and special financing needs. Many of these special financing assistance programs in Delaware offer very low interest rate long term fixed rate mortgages.
Special Mortgage Financing Programs For First Time Home Buyers In Delaware
The Single Family Mortgage Revenue Bond Program or SFMRB is often referred to as the First Time Buyer Program for Delaware. This program is available across the state and offers first mortgage loans with cheap interest rates to moderate to low income buyers.
You must be a first time home buyer to be eligible for the program. You can not have owned a home in the past three years to be considered a first time home buyer. Which means that you can have owned a home before just not in the last three years. This financing is only available to primary residences. You may not use the SFMRB for second homes and investment property. The only exception to this rule is if the home is in a target area, the first time home buyer rule would not apply.
Be sure to ask you lender to see if your home is in a targeted area or not. Unlike most conventional mortgages that only require 2 years of income tax returns, you will need 3 years of federal tax returns to be able to qualify for a SFMRB mortgage.
Is Down Payment Assistance Available in Delaware?
Often the biggest barrier to families being able to buy a home is not lack of income but rather a lack of closing costs and down payment. The state of Delaware offers the SMAL program. The Second Mortgage Assistance Loan is designed to give homebuyers assistance with their down payment and closing cost expenses.
The amount of the loan is up to $10,000. This program is not a gift but rather a loan. This loan will be a second mortgage against the property. The principal and interest deferred however. The loan will have to be repaid in the future when the property is sold. With no payment, home buyers can use this program to more easily qualify for their mortgage program.
Does Delaware Have ADDI - Federal Down Payment Assistance?
There is also the American Dream DownPayment Initiative or ADDI in Kent County and Sussex County. The ADDI program offers the greater of $10,000 or 6% of the purchase price or contract price. You must be a first time home buyer in Sussex or Kent Counties to get this grant. The assistance converts to a grant after 5 years as long as the owner does not sell or refinance.
To get additional information about down payment assistance programs, or to find out more about mortgage programs please complete the information below:
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