DSHA First State Home Loan DPA

On a $225,000 home in Wilmington using an FHA loan, the minimum 3.5% down payment is $7,875. The DSHA First State Home Loan DPA provides 3% of the first mortgage amount. With a first mortgage of approximately $221,000 (after the down payment and FHA upfront MIP financing), the DPA would be roughly $6,630 as a zero-interest deferred second mortgage. This covers most of the $7,875 down payment, leaving about $1,245 the buyer needs from savings.

Estimated closing costs in Wilmington run $4,500 to $7,000, so total out-of-pocket cash needed would be approximately $5,745 to $8,245 including the remaining down payment gap and closing costs. Seller concessions of up to 6% on FHA loans could cover a significant portion of closing costs if negotiated into the purchase contract.

For a larger DPA, buyers can choose Keys4You (4%) instead of First State (3%) under the same DSHA tracks for approximately $8,840 on the same loan, which would fully cover the FHA down payment with roughly $965 left over for closing costs. Alternatively, the Delaware First-Time Homebuyer Tax Credit (MCC) can be combined with First State for up to $2,000 per year in ongoing federal tax savings.

Because DSHA funds one DPA second mortgage per purchase, choosing First State rules out Keys4You (4%), Take5 (5%), DSHA Diamond in the Rough (5% + FHA 203k), DSHA Home Sweet Home Program (up to $12,000 forgivable), or Delaware Diamonds Home Loan ($10,000 forgivable for essential workers). You choose the single DPA option that best fits your loan size, credit profile, and buyer status.

The exception is the Delaware First-Time Homebuyer Tax Credit (MCC), which credits 35% of mortgage interest paid, up to $2,000 a year, against federal taxes. The MCC is a tax credit rather than a DPA second mortgage, so it does not conflict with DSHA's one-DPA-per-transaction rule. Combining First State with the MCC gives buyers both upfront down payment help and ongoing annual tax savings.

The key comparison for most buyers is First State (3%) versus Keys4You (4%). Both are available under the Welcome Home and Open Door tracks, both are zero-interest deferred second mortgages, and both accept FHA, VA, USDA, and conventional first mortgages. The only difference is the assistance percentage. On a $225,000 purchase, Keys4You provides roughly $2,200 more than First State. Buyers who qualify for the Welcome Home track can also consider Take5 (5%) for the highest available percentage.

The First State Home Loan DPA is the most versatile option in the DSHA lineup because it is available under both the Welcome Home (first-time buyer) and Open Door (repeat buyer) tracks, works with FHA, VA, USDA, and conventional first mortgages, and has the standard 620 minimum credit score. It provides a dependable 3% of the loan amount with zero interest and no monthly payments, making it a solid foundation for buyers who want straightforward assistance without the additional requirements of specialty programs like Diamond in the Rough (which requires FHA 203k) or Delaware Diamonds (which requires essential worker status).

The main limitation is that 3% is the smallest percentage-based DPA in the DSHA family. On a $225,000 purchase, First State provides about $6,630 compared to roughly $8,840 from Keys4You (4%) or $11,050 from Take5 (5%, Welcome Home only). Buyers who need every dollar of assistance to cover their down payment and closing costs should compare the higher-percentage options. The DPA must also be fully repaid when you sell or refinance, so unlike the DSHA Home Sweet Home Program (which is forgivable), First State reduces your equity at sale by the full 3% amount.