Delaware Diamonds Home Loan

On a $225,000 home in Wilmington, an FHA loan requires a minimum 3.5% down payment of $7,875. The Delaware Diamonds Home Loan provides $10,000 as a 0% interest forgivable second mortgage, which fully covers the down payment with $2,125 remaining that can go toward closing costs.

Estimated closing costs in Wilmington run $4,500 to $7,000. After applying the leftover $2,125 from the Diamonds loan, you would still need approximately $2,375 to $4,875 for remaining closing costs out of pocket. If your seller agrees to contribute toward closing costs (up to 6% on FHA loans, or $13,500 on this purchase), your out-of-pocket costs could drop to near zero.

For even more coverage, eligible buyers could combine the $10,000 Diamonds loan with the DSHA First State Home Loan DPA, which provides an additional 3% of the first mortgage amount (approximately $6,600 on this purchase) as a zero-interest deferred second mortgage. That combination would provide roughly $16,600 in total assistance, covering your full down payment and most closing costs. Contact DSHA at (888) 363-8808 to confirm current stacking availability.

The Delaware Diamonds Home Loan can be combined with the Delaware Mortgage Credit Certificate for additional savings, though buyers should confirm the MCC program's current availability with DSHA as it may have been discontinued. The Diamonds program requires the DSHA Smart Start Home Loan as the first mortgage, which means it fits within DSHA's broader program ecosystem.

Buyers may also be able to layer the Diamonds DPA with other DSHA second mortgage products like the First State Home Loan (3% of first mortgage amount, deferred) or the Keys4You Home Loan (4% of first mortgage amount, deferred). However, DSHA may limit the total number of subordinate liens or the combined assistance amount. Contact a DSHA-approved lender to confirm which combinations are currently permitted.

The Diamonds program is compatible with FHA, VA, USDA, and conventional first mortgage types as long as the first mortgage is originated through the DSHA Smart Start program. For the strongest combination in Delaware, pairing Diamonds ($10,000 forgivable) with a federal program like the FHLB First-Time Homebuyer Program could provide additional assistance, though federal program availability varies by participating lender.

The Delaware Diamonds Home Loan offers several distinct advantages over other DSHA programs. The 0% interest forgivable structure means the $10,000 costs you nothing if you stay in the home 10 years, unlike the First State Home Loan or Keys4You DPA which are deferred (repaid when you sell or refinance). The program is also open to repeat buyers, which is unusual for state-level DPA programs that typically restrict eligibility to first-time homebuyers. If you are a Delaware essential worker who already owns a home but wants to purchase a different property, Diamonds may be one of your only state-level DPA options.

The main limitation is the essential worker requirement, which restricts the program to specific occupations. If you work in finance, tech, legal, or other fields not on DSHA's list, you would not qualify regardless of income or credit. The 6-month employment requirement can also be a barrier for workers who recently changed jobs. Buyers planning to sell or refinance within a few years should weigh the prorated repayment: selling after 3 years means repaying $7,000 of the original $10,000. For those who plan to stay long-term, the forgiveness structure makes Diamonds one of the most cost-effective DPA options in Delaware.