Delaware First-Time Homebuyer Tax Credit (DE Tax Credit / MCC)

What is Delaware First-Time Homebuyer Tax Credit (DE Tax Credit / MCC)?

Delaware First-Time Homebuyer Tax Credit (DE Tax Credit / MCC) is a mortgage credit certificate for homebuyers in Delaware, administered by Delaware State Housing Authority (DSHA); Program Administrator: Hilltop Securities Inc.

• The Delaware First-Time Homebuyer Tax Credit is a federal Mortgage Credit Certificate (MCC) under IRC Section 25 that gives qualified first-time homebuyers a non-refundable federal income tax credit equal to 35% of the mortgage interest paid each year, up to a maximum of $2,000 per tax year. The credit can be claimed for the life of the loan as long as the home remains the borrower's principal residence. It can be issued with a DSHA first mortgage (0% origination fee) or stand-alone (1% fee).
• 35% of annual mortgage interest as a federal tax credit, up to $2,000/year.
• Claimable every year for the life of the loan.
• Reduces federal tax liability and improves qualifying income.
• Stackable with DSHA first mortgage and DPA second loans.
• Veterans and targeted-area buyers exempt from first-time requirement.
• Funding comes from Federal mortgage credit certificate authority administered by DSHA.

How much assistance does it provide?

Delaware First-Time Homebuyer Tax Credit (DE Tax Credit / MCC) offers up to $2,000 in assistance.

• The program can be combined with Stackable with any DSHA first mortgage and any DSHA DPA second loan (First State, Keys4You, Take5, Diamond in the Rough). Can also be issued stand-alone with a non-DSHA mortgage (1% origination fee).
• Amounts are the program's published maximums, not an offer — Delaware State Housing Authority (DSHA); Program Administrator: Hilltop Securities Inc. determines any individual award.

Do you have to pay it back?

Delaware First-Time Homebuyer Tax Credit (DE Tax Credit / MCC) is a tax credit rather than a loan, so there is nothing to repay.

• Repayment is triggered by Not a loan; no repayment. Credit may be claimed annually for the life of the loan as long as the home remains the borrower's principal residence.
• The assistance is recorded in N/A (no lien; mortgage credit certificate) position.
• Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

Delaware First-Time Homebuyer Tax Credit (DE Tax Credit / MCC) is open to first-time homebuyers and buyers who will live in the home as their primary residence.

What are the income limits?

Delaware First-Time Homebuyer Tax Credit (DE Tax Credit / MCC) sets its income limit as follows: Household income limits (by household size): New Castle County non-targeted $119,400 (1-2 person) / $137,310 (3+ person); New Castle targeted $143,280 / $167,160. Kent & Sussex non-targeted $108,800 (1-2) / $125,120 (3+); Kent & Sussex targeted $130,560 / $152,320. Income counted for those on the note and/or mortgage only.

• The limit applies to total household income, not only the borrower’s.
• Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

What kind of home can it be used for?

Delaware First-Time Homebuyer Tax Credit (DE Tax Credit / MCC) caps the purchase price at $617,241.

• Eligible property types include Single-family detached, Townhouse/row house/patio home (attached), 1-4 unit dwellings, and Condominium (subject to mortgage insurer guidelines).

Is there eligibility for specific groups?

Delaware First-Time Homebuyer Tax Credit (DE Tax Credit / MCC) names veterans among the groups it serves.

• Being named here means the program mentions the group, not that membership alone qualifies an applicant — the rest of the eligibility rules still apply.

Where does it apply?

Delaware First-Time Homebuyer Tax Credit (DE Tax Credit / MCC) serves buyers purchasing anywhere in Delaware.

• The program targets specific areas: Mortgages on residences in federally designated Targeted Area census tracts are exempt from the first-time-homebuyer requirement and qualify for higher income and purchase-price limits. Tracts: New Castle 0006.02, 0019.02, 0021.00, 0023.00, 0029.00, 0030.02; Kent 0425.00; Sussex 0505.03, 0507.11.
• Targeted neighborhoods: Census tracts: New Castle 0006.02, 0019.02, 0021.00, 0023.00, 0029.00, 0030.02; Kent 0425.00; Sussex 0505.03, 0507.11.

How do you apply?

Applications for Delaware First-Time Homebuyer Tax Credit (DE Tax Credit / MCC) go through Delaware State Housing Authority (DSHA); Program Administrator: Hilltop Securities Inc., which publishes the current terms and the application steps on its own site.

1. 1

   Contact Delaware State Housing Authority (DSHA); Program Administrator: Hilltop Securities Inc. to reserve funds

   Funds are reserved through First-come, first-served via DSHA Mitas online (https://DSHA.MITAS.com); reservable Mon-Fri 9:30 AM-5:30 PM. 120-day reservation period from reservation to closing (stand-alone MCCs)., and are subject to availability.

2. 2

   Work with a lender who handles the program

   Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.