Delaware Mortgage Credit Certificate Program (MCC)

Quick Answer for Delaware Buyers

• The MCC program ended August 15, 2025 and is no longer accepting new applications
• The main rate-based replacement is the DSHA Welcome Home loan program
• Repeat buyers and higher-income buyers should review the DSHA Open Door program (formerly Home Again, renamed in the April 2026 DSHA rebrand)
• Down payment help is available through Keys4You (4%), First State (3%), Take5 (5%), and Diamond in the Rough (5% + 203k)
• Call 302-703-0727 to compare your current options in 15 minutes

Watch: What Happened to the Delaware Mortgage Credit Certificate in 2026?

The Delaware Mortgage Credit Certificate program — also called the Delaware First Time Home Buyer Tax Credit — was issued by DSHA under Section 25 of the Internal Revenue Code. It allowed qualifying borrowers to apply a percentage of their annual mortgage interest directly against their federal income tax liability — a more powerful benefit than a standard deduction. The program was available through approved lenders such as Primary Residential Mortgage in Newark, Delaware, where my team originated MCC loans throughout the program’s life from 2013 to 2025.

The MCC Program ended August 15, 2025. If you found this page while searching for the Delaware MCC, you’re in the right place — this page explains how the program worked, why it ended, and exactly what replaced it for Delaware home buyers today. The good news: the buyers who used to qualify for the MCC almost always qualify for one of the current DSHA programs, and for many buyers the new lineup actually delivers more value over the life of the loan than the old $2,000-per-year tax credit ever could.

What You Will Learn on This Page

• What the Delaware MCC program was and how the $2,000-per-year tax credit worked
• Who qualified — and what the income, purchase price, and first-time buyer rules required
• Why the program ended on August 15, 2025 and what DSHA replaced it with
• How the current DSHA Welcome Home, Open Door, Keys4You, First State, Take5, and Diamond in the Rough programs work today
• Which current Delaware first-time home buyer program is the best fit for your situation

Watch: Delaware Mortgage Credit Certificate Program Explained by John Thomas

This video covers the MCC program as it operated prior to August 2025. It remains a valuable resource for understanding how the tax credit worked — and the comparison below shows why the new DSHA programs may serve you even better.

What Was the Delaware Mortgage Credit Certificate Program?

The Delaware Mortgage Credit Certificate was a first-time home buyer tax credit issued by DSHA under Section 25 of the Internal Revenue Code. It allowed eligible Delaware home buyers to claim up to 35% of their annual mortgage interest as a direct credit against their federal income taxes, capped at $2,000 per year. Unlike a tax deduction — which only reduces your taxable income — a tax credit reduces your actual tax bill dollar-for-dollar.

The credit could be claimed every year the borrower held the mortgage, making the total lifetime value significant. On a 30-year mortgage, the MCC had the potential to deliver up to $60,000 in cumulative federal tax savings for a qualifying borrower.

For Example: If you paid at least $5,715 each year in mortgage interest for the first 5 years you had the mortgage, you would get the full $2,000 federal tax credit each year — for a total of $10,000 in tax savings over those 5 years.

How Did the Delaware First Time Home Buyer Tax Credit Work?

Each year, a borrower enrolled in the Delaware MCC Program multiplied their annual mortgage interest by 35% to calculate their credit. For example, a borrower paying $12,000 in mortgage interest in a year would calculate a credit of $4,200 — but the cap meant only $2,000 of that could be claimed. That $2,000 came directly off their federal tax bill at filing time. The remaining interest above the cap could still be claimed as a standard mortgage interest deduction.

What Were the Eligibility Requirements for the Delaware MCC?

Principal Residence Requirement

Borrowers had to occupy the subject property as a primary residence within 60 days of closing. Investment properties, second homes, and rental properties did not qualify.

First-Time Home Buyer Requirement

Each borrower had to qualify as a Delaware first-time home buyer — defined as no principal residence ownership in the prior three years — unless the home was in a federally designated targeted area or the borrower was a qualified veteran. The targeted-area and veteran exceptions are still part of the current DSHA Welcome Home eligibility framework today.

Purchase Price and Income Limits

Purchase prices could not exceed 90% of the average area price for the county (110% in targeted areas). Household income could not exceed 115% of the applicable median gross income for the county (100% for households under three people). In targeted areas, the limit was 140% (120% for smaller households).

New Mortgage and Fixed Rate Requirement

The MCC applied only to new purchase transactions — not refinances. It was available only with fixed-rate mortgage loans through an approved DSHA lender. Certificates were issued on a first-come, first-served basis until the annual allocation was exhausted.

What Were the Income Limits for the Delaware MCC Program?

Income limits were based on the county where the property was located and the size of the household. The 2024 limits below are shown for historical reference only — the program ended August 15, 2025 and these figures are no longer in effect.

What Were the Maximum Purchase Price Limits?

The current DSHA Open Door program raises the purchase price ceiling significantly above where the MCC operated — up to $617,241 in non-targeted areas and $544,232 in Kent and Sussex counties — which means today’s higher Delaware home prices fit comfortably under the cap. The Welcome Home program does not have a published purchase-price cap separate from the underlying loan-product limits.

What Replaced the Delaware MCC Program?

The shift from a tax credit to a rate reduction is actually an improvement for many buyers. A lower interest rate reduces every monthly payment for the life of the loan — no paperwork, no tax filing, no annual cap. The savings begin immediately at closing rather than arriving as a refund the following spring. And because the new lineup includes multiple DPA programs that the MCC era did not have, buyers who used to get only the $2,000 tax credit can now get a reduced rate plus 3%, 4%, or 5% in down payment assistance — a much bigger combined benefit.

Delaware MCC Program vs. DSHA Welcome Home + Keys4You

Why the Change May Actually Help Delaware Buyers More

For many buyers, a lower monthly payment combined with down payment assistance delivers more practical value than a yearly tax credit. Here’s why:

• Savings start immediately — no waiting until the following April to see the benefit
• A lower payment may help a buyer qualify for a higher purchase price
• No annual paperwork, IRS filings, or $2,000 caps to track
• The current programs pair with down payment assistance (3% to 5%) — something the MCC never offered
• Repeat buyers and higher-income buyers now have the Open Door program, which the old MCC era did not include

Before and After: How a Delaware Buyer Saves in 2026

Current Delaware First-Time Home Buyer Programs Available in 2026

If you found this page looking for the Delaware MCC, these are the active DSHA programs to review now. All are currently funded and accepting applications through approved lenders including Primary Residential Mortgage. The April 16, 2026 DSHA rebrand consolidated the lineup under the new “Delaware Mortgage Program” umbrella, replacing the old Kiss Your Landlord Goodbye branding and updating product names — most notably renaming Home Again to Open Door and naming the 4% DPA “Keys4You” for the first time.

DSHA Welcome Home Mortgage Loan

The primary rate-based replacement for the MCC benefit. DSHA’s Welcome Home program provides below-market interest rates on first mortgages for qualifying Delaware first-time home buyers. Minimum credit score of 620 required. Pairs with the Keys4You (4%), First State (3%), Take5 (5%), or Diamond in the Rough (5% + 203k) DPA programs. Rates are published daily by DSHA at destatehousing.com.

DSHA Open Door Mortgage Loan

For buyers who exceed the Welcome Home income limits or who are not first-time buyers. The Open Door program (which renamed and replaced the old DSHA Home Again program in the April 16, 2026 rebrand) has higher income limits and is open to repeat buyers throughout Delaware. Pairs with Keys4You (4% DPA) or First State (3% DPA). Pairs with FHA, VA, USDA, and Conventional first mortgages. (See the legacy Home Again page for historical context.)

DSHA Keys4You Down Payment Assistance (4%)

Currently the largest DSHA DPA option available to repeat buyers. Provides 4% of the first mortgage amount as a zero-interest deferred second mortgage with no required monthly payments. Pairs with both Welcome Home (FTHB) and Open Door (repeat buyers) — that dual-pairing makes Keys4You the closest current equivalent of the old MCC’s broad accessibility. Named “Keys4You” in the April 16, 2026 DSHA rebrand; before that, the 4% DPA was an unnamed program tied only to Home Again.

DSHA First State Home Loan Down Payment Assistance (3%)

A 0% interest deferred second mortgage providing 3% of the first mortgage loan amount toward down payment and closing costs. No monthly payments required. Pairs with both DSHA Welcome Home and Open Door first mortgages. (This program was historically referred to as the “Preferred Plus DPA” before DSHA’s branding update.)

DSHA Take5 Down Payment Assistance (5%)

Launched April 16, 2026 as part of the DSHA Delaware Mortgage Program rebrand. Provides 5% of the first mortgage amount as DPA — currently the largest DSHA DPA available. Welcome Home (first-time buyer) only. For buyers who need maximum cash-to-close help.

DSHA Diamond in the Rough (5% DPA + FHA 203k)

For buyers purchasing a home that needs renovation work. Combines 5% DSHA down payment assistance with FHA 203(k) renovation financing of up to $75,000 — letting buyers roll purchase price and renovation costs into a single first mortgage. Welcome Home (FTHB) only.

For a full overview of all current Delaware home buyer options, visit the Delaware Down Payment Assistance Programs page or the Delaware First-Time Home Buyers pillar — or call 302-703-0727 to discuss which combination is right for your specific situation.

Which Program Is Right for You?

Common Myths About the Delaware MCC Program

Myth: The Delaware MCC Program Is Still Available

The program ended on August 15, 2025. DSHA stopped accepting applications on that date and the program has not been renewed. Any lender still advertising the MCC for new applications is providing outdated information.

Myth: The Benefit Disappeared When the MCC Ended

The benefit didn’t disappear — it shifted, and for many buyers it actually expanded. DSHA redirected MCC resources into the Welcome Home rate-reduction structure and added an entirely new layer of down payment assistance programs (Keys4You, Take5, Diamond in the Rough) that did not exist during the MCC era. For most buyers, the combined monthly payment savings plus DPA over the life of a loan exceed what the MCC’s $2,000 annual cap could have provided.

It’s also worth noting that Delaware has a separate First-Time Home Buyer Transfer Tax Exemption that is often confused with the MCC program. This is a different benefit — it reduces the state portion of the transfer tax paid at closing by 0.5% on purchase prices up to $400,000, saving buyers up to $2,000 at settlement. That program is still active and has nothing to do with the MCC ending. If you were searching for information on that benefit, see the Delaware First-Time Home Buyer State Transfer Tax Exemption and the New Castle County Transfer Tax Exemption for full details. Also worth knowing: Delaware’s standard DAR contract splits transfer tax 2% buyer / 2% seller, but home builders write their own contracts — some require the buyer to pay the entire 4%. Always read your sales contract carefully on new construction.

Myth: A Tax Credit Is Always Better Than a Rate Reduction

It depends entirely on the buyer’s situation. A $2,000 annual tax credit is fixed. A rate reduction compounds across every payment for the full loan term. A buyer who stays in the home long-term and finances a larger loan may come out significantly ahead with a rate reduction versus the $2,000 cap the MCC imposed. And once you stack down payment assistance on top — which the MCC never offered — the comparison gets even more lopsided in favor of the current programs.

Buying a Home in Delaware? Programs Are Available Statewide

DSHA programs are available throughout all three Delaware counties. Whether you’re buying in New Castle County — in cities like Newark, Wilmington, or Middletown — or in Kent County near Dover, or in Sussex County near Rehoboth Beach, Georgetown, or Lewes, the Welcome Home, Open Door, Keys4You, First State, Take5, and Diamond in the Rough programs apply statewide. Income limits and purchase price limits do vary by county, so working with a DSHA-approved lender who knows those specific thresholds is important.

John Thomas with Primary Residential Mortgage has helped buyers across all three Delaware counties for over 20 years. His team holds monthly home buyer seminars in Dover, Newark, and Wilmington — free to attend and covering all current DSHA programs in detail.

Delaware Mortgage Credit Certificate — Frequently Asked Questions

---

Last Updated: April 28, 2026

John Thomas, NMLS #38783 | Primary Residential Mortgage, Inc. | 248 E Chestnut Hill Rd, Newark, DE 19713 | 302-703-0727 | delawaremortgageloans.net | Licensed by the Delaware State Bank Commissioner | Equal Housing Lender

Copyright John R. Thomas, All Rights Reserved.