Delaware’s housing market has been on a road to recovery for some time now. Prices have gone down over the previous year but are expected to rise about 3.4% over the next year. Some of the most rapidly appreciating cities are Ellendale, Rehoboth Beach, Bridgeville, Frederica, and Selbyville. First-time investors will find some of the most affordable homes in Dover, New Castle, and Wilmington and have the chance to pay a mortgage that is lower than the median rental costs which hover around $1,300. Some of the finest and most affordable places to own a home are Milford, Dover, Middletown, and New Castle.
First time home buyers will need to begin the pre-approval process as soon as possible to get their foot in the door before prices begin to rise. They will also need to find a reputable Realtor to help in the buying process before prices begin to shoot back up. Fortunately, there’s more one can do than simply acting fast. The First State has a number of assistance programs and incentives for those buying a new home in Delaware.
Tax Credit to First Time Delaware Home Buyers
Governor Jack Markell has recently joined with the director of the Delaware State Housing Authority (DSHA), Anas B. Addi and other officials in order to ring in Delaware Home Ownership Month. They have announced a new program which enables first-time home buyers a chance to claim a tax credit when they file their federal income taxes. The First-Time Homebuyer Tax Credit authorizes first-time buyers who are purchasing a home in Delaware for use as their primary place of residence to benefit from an income tax credit on their federal tax return up to $2,000. This will extend to each and every year that the homebuyer continues to live in this same home and maintains their mortgage loan.
The First-Time Homebuyer Tax Credit both reduces the home owner’s income tax liability and raises their net earnings, it will be a significant help making homeownership a more achievable goal for Delaware residents.
Markell said, “To keep Delaware competitive, we need the First State to be as attractive to new buyers and as affordable a place to live in as it can be. These credits will help more families to acquire affordable housing. It will stabilize communities, and it will boost our local economy.”
HUD officials said the organization is committed to creating a more robust housing market that is more affordable.
Anas B. Addi added, “While DSHA has been working hard to institute these forward-looking financial hand-ups to assist repeat buyers, we remain committed to aiding first-time home buyers who more often than not only need a little bit of help to achieve homeownership and maintain it. This tax credit will give them the means to reach their dreams, and it will have the added effect of boosting a sagging segment of the real estate market. Strengthening Delaware’s economy will benefit everyone.”
One first-time homebuyer, Dan Hagans, Jr., remarked, “These programs don’t just help families get into sustainable homes; but the education process also helps to prepare new homeowners so that they can keep up with their new responsibilities. Homeownership means greater stability and the opportunity to learn to be a greater part of the community.”
In order to qualify, applicants are required to meet certain income requirements and may not have been the owner of a home three years prior to buying. Exemptions exist for some non-active veterans. Gross family income limits are in place and vary by location and by the size of the family. The total household income for families of three or greater may not exceed $91,080 in New Castle County. In Kent and Sussex Counties, the limit is $84,065. In New Castle County the maximum purchase price home is $387,692. The maximum purchase price for a home in Kent County is $347,307 and $346,153 in the southern county of Sussex.
Home buyers are required to apply for the tax credit via participating lenders. DSHA offers qualified buyers attenuated mortgage rates through the Homeownership Loan Program. This program also offers assistance with closing costs and down payments. For more information on these programs and a list of participating lenders go to www.destatehousing.com.
Other Homeowners Grants for New Investors
The “Live Near Your Work” Grant
The state of Delaware offers yet another innovative type of grant, the LNYW grant. Qualifying applicants can receive as much as $3,000 to go toward the purchase of their home if that home is within a certain proximity of their place of work or business. There are a few more provisions applicants must meet to qualify. To learn more visit, Delaware State Housing Authority’s website.
Second Mortgage Assistance Loan
While this is not a program meant strictly to help first time buyers, the SMAL Program is designed to help with monies for a down payment or closing costs for qualified applicants. Remember, it is a loan, not a grant- so its beneficiaries will have to repay it. But for home buyers who are eligible, it is possible to use the program to creatively set up a home loan with no down payment. This is a two-part process and is only to be used in concurrence with the DSHA’s First-Time Homebuyer Program discussed above.
The Rebuilding our Communities Program
This innovative program offers help with either the down payment, closing costs- or both in certain cases for investors who are buying either a foreclosed or abandoned house. Like the SMAL loan, it has to be used in conjunction with the First-Time Homebuyer Program. Both the applicant and the property to be purchased must meet certain requirements to qualify.
A Market in Recovery is a Buyer’s Market
With the preponderance of assistance programs available to first time home buyers in Delaware, it should be clear to anyone that the local economy has struggled to recover from the previous decade’s recession. The good news is that Delaware’s economy has come back b and is now sufficiently robust that it can afford to extend a helping hand to any first time home buyer Delaware who needs it.
Forecasters draw two conclusions from the state’s offering so many aid provisions to new investors: one- that the market is b enough to reach out to buyers and two- that the community has the will to put people first. In this rare convergence of good will and growing fortunes, the forecast for the quality of life in The First State is looking good into the foreseeable future.
2 Point Highlight
Markell said, “To ensure Delaware remains competitive, we need the First State to be as attractive to new buyers and as affordable a place to live in as it can be. These credits will help more families to acquire affordable housing. It will stabilize communities, and it will boost our local economy.”
This tax credit will give them the means to reach their dreams, and it will have the added effect of boosting a sagging segment of the real estate market. Strengthening Delaware’s economy will benefit everyone.
