The Delaware State Housing Authority offers the Second Mortgage Assistance Loan (SMAL). This program provides eligible applicants with a loan of up to $8,000 that can be put toward down payment and closing cost expenses associated with mortgage transactions.

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June 25, 2019
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Second Mortgage Assistance Loan (SMAL)

Financial Assistance for Homebuyers in Delaware

One of the major roadblocks that people face when buying a home is the large upfront costs, such as the down payment and closing costs. In an effort to help potential homebuyers overcome this hurdle, the Delaware State Housing Authority offers the Second Mortgage Assistance Loan (SMAL). This program provides eligible applicants with a loan of up to $8,000 that can be put toward down payment and closing cost expenses associated with mortgage transactions.

Available Assistance
DSHA’s Second Mortgage Assistance Loan comes with a 3 percent simple interest rate, and payments that are deferred for 30* years. Payments are required beginning in the 361st month. The balance is due upon refinancing, sale, transfer of title or when the property is no longer the homebuyer’s primary residence, whichever occurs first. Borrowers can use the $8,000 to cover the down payment and closing costs or to reimburse themselves for other expenses incurred prior to closing, such as appraisal, application fees or earnest money down payment provided when signing the sales contract.

Eligibility Requirements
In order to qualify for DSHA’s Second Mortgage Assistance Loan, borrowers must meet all the requirements for the Homeownership Loan.

Homebuyer Education
Borrowers must also attend and complete a homebuyer education course offered by a HUD-approved housing counseling agency. Additionally, the annual household income of all borrowers must fall within the program limits.

Property Guidelines
The Second Mortgage Assistance Loan comes with limits for a maximum purchase price based on county and number of dwelling units.

Kent County:
1 unit: $248,098
2 unit: $317,655
3 unit: $383,962
4 unit: $477,135

New Castle County:
1 unit: $349,411
2 unit: $447,283
3 unit: $540,690
4 unit: $671,938
 
Sussex County:
1 unit: $291,176
2 unit: $372,752
3 unit: $450,552
4 unit: $559,933

(Note: All figures mentioned above were accurate at the time of publication and may no longer be current - visit the program website for updated information.)
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Down payment assistance programs and/or grants were researched by the team at FHA.com. Please note that all programs listed on this website may involve a second mortgage with payments that are forgiven, deferred, or subsidized in some manner until resale of the mortgaged property.

FHA.com's compilation is not a complete list, but it can serve as a starting point in your search for the down payment assistance program or grant for your situation. It is up to the consumer to contact these entities and find out the specifics of each program.

Down Payment Grants in Delaware

The Delaware State Housing Authority (DSHA) recognizes that many individuals can afford monthly mortgage payments, but don’t have the funds for a down payment on a home. In order to help people get over this hurdle, the DSHA offers eligible homebuyers down payment assistance in the form of the Advantage 4 Program.

The New Castle County Department of Community Services offers first-time homebuyers the Down Payment Settlement Program. This program comes in the form of a deferred payment loan, to help cover down payment and closing/settlement costs associated with the purchase of a new home.

The New Castle County Department of Community Services promotes homeownership through the ReVaMP program, or "Remediating, Vacancies Making Progress.” This program helps to cover the down payment and closing costs for vacant homes in New Castle’s identified areas. 

The Delaware State Housing Authority offers the Second Mortgage Assistance Loan (SMAL). This program provides eligible applicants with a loan of up to $8,000 that can be put toward down payment and closing cost expenses associated with mortgage transactions.

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