DSHA Preferred Plus DPA First-Time Homebuyer Assistance Programs

DSHA Preferred Plus DPA: Your Shortcut to Owning a Delaware Home

Buying your first house in the First State no longer has to feel like climbing Rehoboth’s dunes with a backpack full of bricks. Thanks to the DSHA Preferred Plus DPA, qualified Delaware buyers can pocket up to 5% of their loan amount for down payment and closing costs—often the biggest hurdle between renting and owning. Below, you’ll find everything you need to know, from eligibility rules to a five-step application roadmap, peppered with insider tips that most Google search results miss.

What Is the DSHA Preferred Plus DPA, Really?

Administered by the Delaware State Housing Authority (DSHA), the Preferred Plus program couples a 30-year fixed-rate first mortgage with a zero-interest second loan. That silent second covers up to 5% of your primary loan amount and sits quietly in the background until you sell, refinance, or pay off the first mortgage. In plain English: it’s fuel in your tank when you need it, not an anchor around your neck.

• Form: 0% interest, deferred second mortgage
• Use: Down payment AND/OR closing costs
• Max amount: 5% of primary loan (subject to loan limits)
• Pairings allowed: FHA, VA, USDA, and conventional options

According to DSHA’s 2023 annual report, roughly 1,200 households leveraged Delaware Preferred Plus funds last year, with average assistance topping $8,750. Those aren’t rounding errors; that’s money many buyers thought they’d need to save for years.

Who Qualifies for DSHA Preferred Plus DPA?

Eligibility for DSHA Preferred Plus DPA boils down to three buckets: income, credit, and intent. Let’s unpack each one.

1. Income & Purchase Price Limits

Your household income must sit below DSHA’s county-specific caps, updated annually. For 2024:

• New Castle County: $141,240 maximum income
• Kent & Sussex Counties: $108,960 maximum income

Purchase price limits hover around $481,176 statewide but vary slightly by county and property type.

2. Credit & Debt-to-Income (DTI)

• Minimum FICO: 620 (though lenders often prefer 640+ for smoother underwriting)
• Front-end DTI: < 35%
• Back-end DTI: < 45%

3. Homebuyer Education & Occupancy

• At least one borrower must complete a HUD-approved education course.
• You must use the home as your primary residence within 60 days of closing.
• First-time buyer status is broadly defined as “no ownership in the past three years,” except in certain targeted areas where previous owners may still qualify.

How Much Down Payment Assistance Can I Get?

Here’s a quick formula you can use on the back of a coffee-shop napkin:

Max Assistance = (Loan Amount) × 0.05

Assume you’re purchasing a $300,000 condo in Dover with 3.5% down through FHA:

• Primary loan = $289,500 (approx.)
• DSHA down payment assistance = $289,500 × 0.05 = $14,475

That $14K can cover your entire 3.5% down payment plus most closing costs. Suddenly, you’re writing a check for a few thousand instead of tens of thousands.

Is the DSHA Preferred Plus DPA Forgivable?

The short answer: Not automatically. Repayment kicks in only when you sell, refinance, or finish paying off your first mortgage—whichever happens first. Until then, the second loan just… sits. No monthly bill, no accruing interest. Think of it as a silent partner who waits patiently for its slice when you cash out your equity.

However, DSHA occasionally offers limited-time forgiveness incentives for public servants or buyers in revitalization zones. These pilot slots vanish quickly, so bookmark their update page or let your lender monitor alerts for you.

Five-Step Roadmap to Secure Your Preferred Plus Funds

1. Choose a DSHA-Approved Lender

Start with the official lender list. Local credit unions often move faster than national banks because they understand Delaware quirks such as transfer tax splits.

2. Get Pre-Approved & Run the Numbers

Ask the loan officer to layer the Preferred Plus loan program onto your pre-approval. Some lenders forget, and you’ll miss out on free money within arm’s reach.

3. Attend a HUD-Approved Class

Many nonprofits offer Saturday sessions—some provide lunch, all provide a completion certificate valid for two years.

4. Shop Smart, Offer Strong

Because DSHA locks your rate only after you sign a contract, build a 30-day rate buffer into your timeline. Bidding wars near Wilmington can stretch your patience and interest-rate nerves.

5. Close, Sign, Celebrate

At closing, you’ll sign two extra pieces of paper for the second mortgage. Then, do what one of our recent clients did: drive straight to Grotto Pizza for a celebratory slice because you’re now paying yourself instead of your landlord.

Case Study: How Maria Beat Rising Rents in Newark

Maria, a biomedical technician earning $68,000, watched her rent jump by 28% in three years. She felt trapped—until she discovered DSHA Preferred Plus DPA in a podcast aimed at single millennial women. Maria teamed with a DSHA lender, scooped up $11,200 in zero-interest assistance, and bought a two-bed townhome within biking distance of Christiana Hospital. Her monthly payment, including HOA dues, came in $94 lower than her last lease renewal. She now uses the savings to crush student-loan debt six months ahead of schedule. Talk about a plot twist not found on page one of Google.

Pros & Cons vs. Other Delaware First-Time Buyer Assistance

Bottom line: Delaware first-time buyer assistance programs abound, but Preferred Plus packs the most punch for dollar-per-signature.

People Also Ask About DSHA Preferred Plus DPA

Can I combine DSHA Preferred Plus with an FHA 203(k) renovation loan?

Yes. DSHA allows the Preferred Plus aid to pair with FHA 203(k) “limited” and “standard” products. Just remember the 5% cap is based on the total loan after renovation costs are rolled in, so your assistance grows alongside your project budget.

What happens if I refinance within three years?

You’ll need to repay the second mortgage at closing. Many homeowners roll that balance into the new loan or pay it off with equity. Run the math with your lender before pulling the trigger on a refi.

FAQ on DSHA Preferred Plus DPA

How long does DSHA loan reservation take?

Most lenders can reserve funds in 24–48 hours once you’re under contract, but DSHA locks expire after 60 days.

Is there a minimum investment from the buyer?

Yes—$1,000 of your own money must enter the transaction, but it can cover inspections or appraisal fees already paid.

Can I buy a duplex and rent half of it out?

Two-unit properties are allowed if you occupy one unit as your primary residence and meet stricter reserve requirements.

Does DSHA Preferred Plus DPA require mortgage insurance?

Only if the underlying loan type (e.g., FHA, conventional < 20% down) mandates it. The DPA itself carries no MI.

Are manufactured homes eligible?

Factory-built homes titled as real property and meeting HUD guidelines can qualify; single-wides do not.

Ready to Kiss Your Landlord Goodbye?

Every month you wait, another chunk of your paycheck slips into someone else’s pocket. If you’re serious about turning rent into equity, schedule a free 15-minute strategy call with our Delaware lending team. We’ll confirm your eligibility for the DSHA Preferred Plus DPA, calculate your buying power to the dollar, and connect you with agents who waive their admin fee for program participants.

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