Dover Delaware First Start Down Payment Assistance Program

Dover First Start at a Glance	2026
Maximum assistance	$20,000 of settlement costs
Minimum credit score	620
Buyer’s own funds required	$1,000 (excluding gifts)
Asset limit at application	$20,000 in cash or cash equivalents
Income limit	60% to 80% of Kent County AMI by household size
Forgiveness period	10 years of primary residency
Lien position	3rd – always stackable with DSHA assistance
Eligible property	Owner-occupied single-family residence inside the Dover city limits – detached, townhouse, condo, or permanently affixed manufactured home. No multi-unit properties.
Eligible first mortgage	FHA, VA, or conventional through an approved lender
Funding status (July 2026)	Nearly exhausted – City expects refunding around September 2026

I am John Thomas, NMLS #38783, and the John Thomas Team is an approved lender for the City of Dover First Start program. I have spent more than twenty years helping Delaware families buy homes, and Kent County buyers are a large part of that work. First Start is one of the most generous down payment programs in the state for the buyers it fits – up to $20,000, no monthly payments, forgiven in full after ten years – and it is also one of the most misunderstood, because the City rewrote its guidelines and most of what is published online about it is out of date. This page is built from the City of Dover’s current published guidelines and the FY2026 HUD income limits the City itself posts. If you want to know whether you qualify and whether there is money left, call me at 302-703-0727.

What Is the Dover Delaware First Start Down Payment Assistance Program?

The Dover First Start Homeownership Downpayment and Settlement Assistance Program is a municipal down payment program run by the City of Dover’s Community Development Office and funded with federal Community Development Block Grant (CDBG) dollars. Its purpose is to help low- and moderate-income families cover down payment and settlement costs on eligible properties inside the Dover city limits.

It is a city program, not a state program. That distinction matters more than most buyers realize. The Delaware State Housing Authority (DSHA) programs are available statewide and are funded through DSHA bond proceeds. First Start money comes out of the City of Dover’s annual CDBG allocation, which means the pool is small, it is spent on a first-come basis, and it can run dry mid-year. If you are buying anywhere else in Delaware, this program does not apply to you – see our Delaware down payment assistance programs guide for the statewide and county options instead.

How Much Money Can You Get from Dover First Start?

The City’s published guidelines set the ceiling at up to $20,000 of settlement costs, with one restriction that trips people up: no more than 50% of the lender’s required down payment can be covered by the grant. In plain terms, First Start is built primarily to attack your closing costs, and it will only carry part of your down payment – you and your first mortgage program still have to cover the rest.

Assistance amounts are also based on demonstrated need and on how much CDBG money the City has left, so $20,000 is a maximum, not an entitlement. Two buyers with identical loan amounts can receive different amounts. The only way to know your number is to have an approved lender run your file and submit it to the City.

Program feature	City of Dover First Start
Maximum assistance	Up to $20,000 of settlement costs
Down payment restriction	No more than 50% of the lender’s required down payment
Structure	Grant secured by a second mortgage lien on the property
Monthly payment	None
Forgiveness	Fully forgiven after 10 years of primary residency
Early payoff trigger	Sale, transfer, or the home ceasing to be your principal residence within 10 years
Minimum credit score	620
Minimum buyer contribution	$1,000 of your own cash, excluding gift money
Asset cap	No more than $20,000 in cash or cash-equivalent assets at application
Property location	Inside the City of Dover limits only
Funding	First-come, first-served; wait list when funds run out

Is Dover First Start Funded Right Now?

This is the question nobody else answers, and it is the one that decides whether the program is useful to you this year. The City of Dover posts a running balance of available program money on its Community Development Office page.

My honest read for buyers right now: if you are shopping this summer, do not write an offer that depends on First Start dollars that have not been reserved – line up a program that is funded today, most often DSHA Welcome Home with one of its down payment assistance options. But if a September refunding is the plan, then the smart move is to get everything else done now: finish your eight hours of HUD counseling, get fully pre-approved, and know which addresses sit inside the city limits. When the money reloads it goes first-come, first-served, and the buyers who did the paperwork in July are ahead of the buyers who start in September.

What happens if the money runs out after you are under contract? Because the City does not reserve funding until a buyer is mortgage-approved, an unreserved award is not a guarantee – and the guidelines put qualified buyers on a wait list for the next CDBG round when funds are exhausted. That is precisely why I do not let a Dover buyer write an offer that depends on First Start dollars that have not been reserved. We structure the file so it closes with or without the City’s money, and the assistance is upside rather than a load-bearing wall.

How Do You Qualify for the Dover First Start Program?

These are the qualifications exactly as the City of Dover publishes them in its current program guidelines. Several of them changed from the older version of this program that is still being repeated on other websites.

• First-time home buyer. Defined by the City as someone who has not owned a home within the past three years.
• At least $1,000 of your own cash, excluding gift money. Gift funds can still help elsewhere in your file – see our gift funds guidelines – but they do not satisfy this $1,000.
• The home must be your principal residence and must be located inside the City of Dover limits.
• Home ownership counseling with a certified HUD counselor, completed prior to closing. Plan on eight hours. You can locate an approved agency through HUD’s Delaware housing counseling resources. The City also states that funding will not be reserved until the buyer has been approved for a mortgage.
• The first mortgage must be held by a lender approved by the program. Primary Residential Mortgage is an approved lender.
• 620 minimum credit score. If you are not there yet, our five factors of credit scoring breakdown is where I would start.
• Home inspection on all existing properties, with any major defects repaired before closing. The inspection must be completed by an independent home inspector licensed by the City of Dover. New construction must carry a one-year HUD-approved warranty.
• Visual lead-based paint assessment on any home built before 1978.
• Household income within the City’s 60% to 80% area median income range for your household size, as defined by HUD. Note that this counts the household, not only the borrowers on the loan.
• No more than $20,000 in cash or cash-equivalent assets at the time of application. This is a real disqualifier and it is not published anywhere else I have seen.

What if the inspection turns up repairs? The City’s rule is that major defects identified in the inspection must be repaired before closing. In practice that means a repair negotiation with the seller, a re-inspection, and time – which is why I tell Dover buyers to build extra days into the contract rather than fight for a fast close. Buying new construction? There is no existing-home inspection requirement, but the builder must provide a one-year HUD-approved warranty, and the builder’s contract is where the transfer tax trap lives (see below).

One rule that has not changed, and that catches buyers at the settlement table: you cannot receive cash back at settlement. If your Closing Disclosure shows money coming back to you – even your own deposit money – the City reduces its contribution by that amount and the extra funds go back to Dover.

Dover City Limits, Not a Dover Mailing Address

This deserves its own section because it is the single most common way a Dover First Start file dies before it starts. The property must sit inside the incorporated City of Dover limits. A Dover, DE mailing address is not the same thing, and neither is a Dover ZIP code.

If the home you love turns out to be outside the line, you are not out of options – it just means the municipal money is off the table and statewide DSHA down payment assistance becomes the path. Ask us to check the address first. It takes a minute and it saves weeks.

What Are the 2026 Dover First Start Income Limits?

The City of Dover uses the HUD income limits for Kent County, by household size. The table below is the City’s own published FY2026 schedule, effective June 1, 2026. The City’s guidelines state that income must fall between 60% and 80% of area median income to be eligible for assistance, so both columns matter – which tier applies to your file is confirmed by the City when your funding application is submitted.

Household size	60% of median	80% of median
1 person	$45,240	$60,350
2 people	$51,720	$69,000
3 people	$58,200	$77,600
4 people	$64,680	$86,200
5 people	$69,840	$93,100
6 people	$75,000	$100,000
7 people	$80,220	$106,900
8 people	$85,380	$113,800

One wrinkle worth naming: the City’s separate Downtown Homeownership Incentives sheet describes First Start eligibility more simply, as household income of 80% of area median income or less, while the program guidelines use the 60% to 80% range. The City’s Community Development Office is the arbiter of which tier applies to your file, and we confirm it with them before funding is requested.

Two things to be careful about here. First, this is household income based on the number of people residing in the home, not just the people signing the note (a distinction that catches self-employed Delaware buyers especially, since their qualifying income and their household income are often two different numbers) – that is different from the DSHA rule, where Welcome Home counts only the income of borrowers on the note and mortgage. Buyers who qualify comfortably for DSHA sometimes do not qualify for First Start for exactly this reason. Second, these limits are refreshed by HUD annually, so a figure you found on a blog last year is probably wrong.

What Property Types Qualify for Dover First Start?

The City’s published guidelines say “eligible properties” without listing them, which is why nobody else answers this. We asked the City of Dover’s Community Development Office directly. Here is the list, straight from them. The program is built for owner-occupied single-family residences, and the City has confirmed that as a matter of program policy it does not assist multi-unit properties.

Property type	Eligible for Dover First Start?
Single-family detached home	Yes – owner-occupied
Townhouse	Yes – the single unit the buyer will occupy
Condominium unit	Yes – the single unit the buyer will occupy
Manufactured home	Yes – if permanently affixed and treated as real property
Duplex or any multi-unit property	No – the City does not assist multi-unit properties as a matter of program policy
Investment property / second home	No – owner-occupied principal residence only

Two things worth pulling out of that list. First, the multi-unit exclusion, because it catches people. An FHA loan will finance a two-to-four unit property that you live in, and buyers reasonably assume the City’s assistance follows the same rule. It does not. The City’s stated reasoning is that its CDBG funding is limited, and keeping the program focused on owner-occupied single-family homeownership stretches those dollars further while avoiding the extra underwriting and administrative complexity that multi-unit deals carry. If a duplex is your plan, the FHA loan still works – the City’s $20,000 does not come with it.

Second, manufactured homes are eligible when they are permanently affixed and titled as real property, not as personal property (chattel) – the same real-property test that governs Delaware manufactured home financing generally. If the home is still titled as a vehicle, the conversion has to happen before any of this works. Worth knowing in Kent County, where manufactured housing is a real part of the entry-level market.

What Are the Grant Terms and Forgiveness Rules?

The City records a mortgage lien on the property for the assistance amount, and it always takes third lien position – behind your first mortgage and behind any DSHA down payment assistance second. There are no monthly payments and no interest accrual on the assistance under the City’s program documents. The obligation is fully forgiven after ten years, provided the home remains your principal residence for that period.

If the home is sold, transferred, or stops being your principal residence within those first ten years, the City’s current guidelines state that a percentage of the grant becomes due and payable – not, as the older program language was often described, the entire amount. That is a meaningful improvement for buyers, and it is the single most commonly misreported fact about this program online, including on national sites.

Refinancing is a separate question. Because the City holds a recorded second lien, a refinance generally requires the City to agree to keep that lien in second position (a subordination) or to be paid off. Do not assume either outcome – confirm it with the City and your lender before you start a refinance.

How the Dover First Start Application Actually Works

Buyers usually come to me thinking they apply to the City first. That is not how this program runs. In my experience originating Dover First Start files, the sequence looks like this, and the order is what keeps a file alive:

1. Apply with an approved lender. You start with a lender approved for the program, like the John Thomas Team. We confirm eligibility first, using household income against the City’s limits for your household size.
2. Complete eight hours of home buyer counseling. This has to be done with a certified HUD counselor. Our free Dover Delaware first time home buyer seminar is where a lot of Kent County buyers get started on this step.
3. Find a property inside the Dover city limits and get it under contract. City limits, not a Dover mailing address – those are not the same thing, and I check the address before anyone writes an offer.
4. The lender submits the funding application to the City of Dover. We send it in for approval of funds on your behalf. You are not filing this yourself.
5. The City approves the funds and we go to closing. The assistance is applied at settlement, and you sign the City’s note and second mortgage.

Here is why the order matters so much on this particular program. The City’s guidelines say funding is not reserved until the buyer has been approved for a mortgage, and that money is awarded first-come, first-served. Put those two rules together and a buyer who waits to get pre-approved is standing behind every buyer who did not. In a year like this one, where the published balance is under $5,000, being early in that line is most of the game.

Which First Mortgage Loans Work with Dover First Start?

First Start is a second lien. It sits behind a normal first mortgage, and that first mortgage needs to come from a lender approved by the program. The first mortgage options Dover buyers typically use are:

• FHA loans – 3.5% down with a 580 score, though First Start itself requires 620. The most common pairing for Dover first-time buyers.
• VA loans – no down payment for eligible service members and veterans. With Dover Air Force Base in the area, this is a real path for a lot of Kent County buyers, and it changes the math on how much assistance you need.
• Conventional loans – as little as 3% down for eligible first-time buyers, with mortgage insurance that can be removed later.

Which one is right depends on your credit, your debt-to-income ratio, and the property. If you are a veteran, a VA first mortgage with no down payment often produces a better result than stacking assistance onto an FHA loan, because the 50%-of-down-payment restriction on First Start means the grant cannot do as much for your down payment as buyers expect.

Can You Combine Dover First Start with DSHA Assistance?

Yes – and this is the part most Dover buyers never hear. The City of Dover always records its assistance in third lien position, behind your first mortgage and behind the DSHA down payment assistance second mortgage. Because it goes into third position by design, First Start can always be stacked with DSHA down payment assistance. You are not choosing between the two programs. You can use both.

That is a meaningful amount of help layered on one purchase: a DSHA down payment assistance second of 3%, 4%, or 5% of your loan amount, plus up to $20,000 from the City of Dover in third position. It also resolves the 50%-of-down-payment restriction neatly – DSHA assistance carries the down payment, and First Start goes to work on your settlement costs, which is exactly what the City designed it to cover. The City of Wilmington’s First Start program works the same way: it also records in third position and stacks with DSHA assistance for Wilmington buyers.

The DSHA tracks a Dover buyer would normally be looking at:

• Welcome Home – the first mortgage for first-time buyers, and the track most First Start buyers also fit.
• Open Door – the first mortgage for repeat buyers and higher-income households. Note that if you qualify for Open Door as a repeat buyer, you do not qualify for First Start, which is first-time-buyer only.
• First State (3% DPA), Keys4You (4% DPA), Take5 (5% DPA, Welcome Home only), and Diamond in the Rough (5% plus FHA 203k renovation financing) – the down payment assistance options that ride on top of those first mortgages.

Example: $300,000 Dover purchase	Assistance	Lien position
First mortgage (FHA, VA, or conventional)	–	1st
DSHA Keys4You down payment assistance at 4% of the loan amount	About $12,000	2nd
City of Dover First Start settlement-cost assistance	Up to $20,000	3rd
Total assistance reviewed	Up to about $32,000

The practical point: DSHA assistance is a percentage of your loan amount and it is funded statewide, while First Start is a flat dollar amount funded out of one city’s grant pool. When First Start money is available, the combination can be powerful. When it is not, DSHA is the program that still closes your loan.

Dover First Start vs. Wilmington First Start vs. DSHA

There are two completely different Delaware programs called “First Start,” and national websites confuse them constantly. Bankrate, for one, has published Wilmington’s terms under a Delaware first-time-buyer heading. If you are buying in Dover, the Wilmington rules do not apply to you, and vice versa.

	Dover First Start	Wilmington First Start	DSHA DPA (statewide)
Who runs it	City of Dover (CDBG)	City of Wilmington	Delaware State Housing Authority
Where you must buy	Inside Dover city limits	Inside Wilmington city limits	Anywhere in Delaware
Amount	Up to $20,000	Lesser of $15,000 or 6% of price	3%, 4% or 5% of the loan amount
Structure	Forgivable, 10 years	Forgivable, 10 years	Deferred 0% second mortgage
Income counted	Full household	Household, per City rules	Borrowers on the note (Welcome Home)
Min credit score	620	Per City rules	620
Stacks with DSHA DPA	Yes – always records in 3rd lien position	Yes – always records in 3rd lien position	N/A – this is the 2nd lien
Funding risk	High – small annual CDBG pool	Moderate	Lower – statewide funding

If you are buying in New Castle County rather than Kent, the closest equivalent municipal-style program is the New Castle County DPS program, which has its own income rules and its own quirks.

Delaware Transfer Tax and Your Dover Closing Costs

Delaware charges a 4% realty transfer tax. Under a standard Delaware Association of Realtors contract, that splits evenly – 2% paid by the buyer and 2% paid by the seller. On a $300,000 Dover home, the buyer’s half is $6,000, and it is usually the largest single line in a first-time buyer’s closing costs. That is exactly the cost First Start is designed to attack.

There is a second lever on that same line: eligible Delaware first-time buyers may claim a Delaware first-time home buyer state transfer tax exemption, which reduces the buyer’s share of the state portion. Stack that with First Start assistance and a seller credit and the cash you actually bring to settlement can look very different from the number you first calculated.

Seller-paid closing cost credits are the other lever, and they are negotiated into the purchase contract rather than applied for. Between assistance and seller credits, many Dover buyers close with far less cash than the sticker price of the closing costs suggests – see understanding seller-paid closing costs for how that works.

Two More City of Dover Incentives Most Buyers Never Hear About

First Start is not the only thing the City of Dover offers a home buyer. The City publishes a separate Downtown Homeownership Incentives sheet, and two of those incentives can matter as much as the grant money – one of them applies citywide, not just downtown.

1. City of Dover first-time home buyer transfer tax exemption (citywide)

The City exempts first-time home buyers from the transfer tax anywhere inside the Dover city limits, provided the home is used as the buyer’s principal residence. This was adopted February 24, 2025 and is set out in the Dover Code, Chapter 102 (Taxation), Article III (Realty Transfer Tax). The City reserves the right to deny the exemption where a sale appears structured to abuse it.

This City exemption is separate from the state-level break covered on our Delaware first-time home buyer state transfer tax exemption page. They are different programs from different levels of government, and a Dover buyer may be looking at both.

2. Downtown Development District real estate tax abatement (DDD only)

If the home you buy sits inside Dover’s Downtown Development District and you live in it, the City phases in your City real estate taxes over five years rather than charging them in full from day one:

Year of owner occupancy	Reduction of City real estate taxes
1st year	100% reduction
2nd year	75% reduction
3rd year	50% reduction
4th year	25% reduction
5th year	0% – full City taxes resume

The abatement is not automatic. The homeowner applies by letter to the City Manager, who responds within 30 days, and the request goes to City Council after the certificate of occupancy is issued. After that, a statement of compliance is due to the City Manager by April 15 each year – miss it and the abatement can be lost. Inside the DDD there is also a seller-side sweetener: a seller who sells to a first-time home buyer may be exempt from their portion of the transfer tax, which is a real negotiating chip when you write the offer.

Both incentives are administered by the City’s Department of Planning and Inspections at 15 Loockerman Plaza, Dover, and neither is handled by your lender – but I flag them for every Dover buyer, because stacking a forgivable grant, a transfer tax exemption, and a four-year tax phase-in changes what a house actually costs to own.

When Dover First Start Is Not a Good Fit

I would rather tell you this up front than have you spend two months chasing a program that was never going to work for you.

• You are buying outside the Dover city limits. A Dover mailing address in unincorporated Kent County does not qualify. Statewide DSHA assistance is the path instead.
• You have significant savings. The $20,000 cash and cash-equivalent asset cap at application means buyers with healthy reserves are generally screened out, even when their income fits.
• Your household income runs above the 80% AMI column for your household size – and remember this counts everyone in the household, not just the borrowers.
• You are a repeat buyer. First Start requires that you have not owned a home in the past three years. DSHA Open Door is built for repeat buyers.
• You are buying a duplex or any multi-unit property. The City assists owner-occupied single-family residences only, and does not fund multi-unit purchases as a matter of program policy – even if you will live in one of the units.
• You are on a tight closing timeline. Between HUD counseling, a City-licensed inspection, required repairs, and the City’s funding approval, this program adds steps. If you need to close in three weeks, it is likely the wrong tool.
• Your credit is below 620. There is no exception in the guidelines. If you are close, we can usually work on it – and a FHA loan at 580 may still put you in a home while you build toward assistance eligibility on a future purchase. Rebuilding after a bankruptcy? Our Delaware mortgage after bankruptcy guide covers the waiting periods.

What Changed on the Dover First Start Program in 2026?

The City of Dover revised its published guidelines, and most of the material online – including, until today, parts of this page – still reflects the older rules. Here is what is actually different.

Rule	Older, widely republished version	Current City of Dover guidelines
Early sale within 10 years	Full amount of the loan repaid	A percentage of the grant becomes due
Home inspection	ASHI inspector	Independent inspector licensed by the City of Dover
Counseling timing	Before signing a contract or applying	Prior to closing; funding is not reserved until mortgage approval
Assets	No asset test mentioned	No more than $20,000 in cash or cash equivalents at application
What the money covers	Down payment and closing costs, broadly	Settlement costs, with no more than 50% of the required down payment
Income standard	At or below 80% AMI	Between 60% and 80% AMI by household size
Single-parent exception	Listed	Not in the current guidelines

FAQ – Dover First Start Down Payment Assistance Program

Buying elsewhere in Kent County? Start with our Dover Delaware mortgage loans guide. New to the process entirely? The Delaware first time home buyers guide covers every step from pre-approval to closing.