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Welcome Home: First State Home Loan (DSHA Welcome Home)

Statewide, Delaware

Last verified
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Assistance

3%

Of the purchase price, as the program sets it

Income limit

$167,160

The household income limit the program publishes

Price cap

$754,406

Highest purchase price the program allows

Repayment

Deferred

No payments until the home is sold or refinanced

What is Welcome Home: First State Home Loan (DSHA Welcome Home)?

Welcome Home: First State Home Loan (DSHA Welcome Home) is a deferred second loan for homebuyers in Statewide, Delaware.

  • DSHA's Welcome Home is the first-time-homebuyer-only bundled mortgage product launched as part of DSHA's April 2026 Delaware Mortgage Program rebrand. It pairs a Smart Start 30-year fixed-rate first mortgage (funded by DSHA tax-exempt mortgage revenue bonds, typically priced slightly below the Open Door rate) with the First State Home Loan, a 0%-interest deferred second mortgage equal to 3% of the first-mortgage loan amount used for down payment and closing-cost assistance. Welcome Home has tighter income limits than Open Door because it is reserved for first-time buyers, and it offers a slightly better first-mortgage rate plus access to richer DPA tiers (Keys4You 4%, Take5 5%, Diamond in the Rough 5%). The second mortgage requires no monthly payment and is fully deferred until refinance, sale, transfer of title, or loss of primary-residence status.
  • Bundled DSHA product designed exclusively for FIRST-TIME homebuyers (Welcome Home umbrella). Competitive 30-year fixed-rate Smart Start first mortgage at a slightly better rate than Open Door, plus First State Home Loan: a 0%-interest, deferred-payment second mortgage equal to 3% of the first mortgage loan amount applied to down payment and/or closing costs. No monthly payment on the second.
  • balance due only on refinance, sale, transfer of title, or when the home is no longer the primary residence. Welcome Home borrowers also have access to richer DPA tiers: Keys4You (4%), Take5 (5%), and Diamond in the Rough (5% with FHA 203(k) renovation).
  • Funding comes from State and Bond.

How much assistance does it provide?

Welcome Home: First State Home Loan (DSHA Welcome Home) provides assistance worth 3% of the purchase price, as set by the program.

  • Buyer contribution: No DSHA-imposed minimum borrower contribution beyond what the underlying loan product (FHA/VA/USDA/Conventional) requires.
  • The program can be combined with other assistance, subject to the rules of each.
  • Amounts are the program's published maximums, not an offer — the administering agency determines any individual award.

Do you have to pay it back?

Welcome Home: First State Home Loan (DSHA Welcome Home) is deferred, so no payments are due until the home is sold, refinanced, or the first mortgage is paid off.

  • Repayment is triggered by Refinance, sale of home, transfer of title, or property no longer used as primary residence (whichever comes first). No monthly payments due during normal occupancy.
  • The assistance is recorded in 2nd Lien position.
  • Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

Welcome Home: First State Home Loan (DSHA Welcome Home) is open to first-time homebuyers and buyers who will live in the home as their primary residence.

The program requires

  • First-time homebuyer — with exceptions: First-time-homebuyer (3-year non-ownership) requirement waived for: (1) qualified veterans (per Heroes Earnings Assistance and Relief Tax Act of 2008); (2) purchases located in IRC Section 143 federally designated targeted census tracts in Delaware.
  • The home is occupied as a primary residence
  • On credit: 620 minimum FICO. Borrowers with credit scores 659 or below MUST complete DSHA-approved housing counseling.
  • A completed homebuyer education course, through DSHA-approved housing counseling agencies; required for borrowers with FICO 620-659 and recommended for all (HUD-approved counselors)
  • Residency: Property must be located in Delaware (any county) and used as the borrower's principal residence within 60 days of closing.
  • Citizenship or immigration status: U.S. citizen, permanent resident alien, or qualified non-citizen per the underlying loan product (FHA/VA/USDA/Conventional) requirements.
  • Borrower must be a FIRST-TIME homebuyer (no ownership interest in a primary residence within the past 3 years). Must obtain a DSHA Smart Start first mortgage (30-year fixed) through a DSHA Preferred Lender. Annual household income must not exceed Welcome Home county/household-size limits (see income_limit_description). Property must be in Delaware and used as primary residence. Borrowers with FICO 620-659 must complete pre-purchase housing counseling. Federal IRS recapture tax may apply (mortgage revenue bond program). FTHB requirement waived for veterans (per Heroes Earnings Assistance and Relief Tax Act) and for purchases in IRC Section 143 federally targeted areas.

The program excludes

  • Purchases above the $754,406 price cap
  • Households above $167,160

These are the program's own published rules, not a decision about any individual — the administering agency and a lender determine who actually qualifies.

What are the income limits?

Welcome Home: First State Home Loan (DSHA Welcome Home) limits household income to $167,160.

  • 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?

Welcome Home: First State Home Loan (DSHA Welcome Home) caps the purchase price at $754,406.

  • Eligible property types include Single-family detached, attached townhouse, condominium (on FHA/VA/Fannie/Freddie-approved project lists), planned unit development (PUD), and 1-2 unit owner-occupied properties (per first-mortgage product rules). Manufactured housing eligible per FHA/VA/USDA standards.
  • New construction is eligible.
  • Manufactured homes are eligible.

Where does it apply?

Welcome Home: First State Home Loan (DSHA Welcome Home) serves buyers purchasing in Statewide, Delaware.

  • The program targets specific areas: Federally designated targeted areas under IRC Section 143 receive higher income limits, higher purchase price limits, and waived first-time-homebuyer rules. Targeted 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 Welcome Home: First State Home Loan (DSHA Welcome Home) go through the administering agency, which publishes the current terms and the application steps on its own site.

  1. Take a homebuyer education course

    Required by the program, through DSHA-approved housing counseling agencies; required for borrowers with FICO 620-659 and recommended for all (HUD-approved counselors).

  2. Contact the administering agency to reserve funds

    Funds are reserved through Reserved by DSHA Preferred Lender via the DSHA Lender Online portal at the time of first-mortgage reservation/lock; subject to bond allocation availability., and are subject to availability.

  3. 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.

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