New Castle County DPS Program: Down Payment Assistance for Delaware First-Time Home Buyers
The New Castle County DPS Program gives eligible Delaware first-time buyers up to $10,000 for down payment and settlement costs as a 0% interest, 15-year second mortgage, with payments deferred for two years. The home must be in New Castle County outside Wilmington, and household income cannot exceed 80% of area median income. Current as of June 2026.
I am John Thomas, NMLS #38783, and I have helped Delaware first-time buyers put together purchases that use down payment assistance for more than 20 years. The New Castle County Down Payment and Settlement (DPS) Program is one of the most useful tools for buyers in New Castle County who have steady income but have not yet saved up the cash for down payment and closing costs. One thing to understand up front: you apply for the DPS loan itself through a HUD-approved housing counseling agency, while I handle your first mortgage and coordinate everything so the two fit together cleanly. Below is a plain-English walkthrough of how much you can get, who qualifies, the 2026 income limits, eligible properties, and how to apply. If you want to see how this fits with the bigger picture, start with our overview of Delaware down payment assistance programs or our guide for Delaware first-time home buyers.
The program’s official name is the Down Payment and Settlement (DPS) Program, which is why you will sometimes see it written as “DPS” rather than “DPA” (down payment assistance) – they refer to the same New Castle County program. The figures on this page reflect the current 2026 New Castle County DPS materials; some older websites still list outdated DPS amounts or loan terms, so always confirm against the current program before relying on a number.
Thinking about buying in New Castle County?
The goal is to confirm whether DPS fits your situation before you write an offer, and to line up the first mortgage that works best with it.
Quick eligibility check – DPS may fit if all three are true:
- You have not owned a home (other than a mobile home) in the last three years.
- You are buying in New Castle County, outside the City of Wilmington, as your primary residence.
- Your total household income (everyone aged 18 and older) is at or below 80% of the New Castle County area median income.
Not sure where you land? Call 302-703-0727 and we will check before you write an offer.
Table of Contents
What Is the New Castle County DPS Program?
The New Castle County Down Payment and Settlement (DPS) Program is a county-run down payment assistance program that helps low- and moderate-income households buy their first home. It provides a loan of up to $10,000 to cover normal and customary down payment and settlement (closing) charges. The program is funded by the U.S. Department of Housing and Urban Development (HUD) through Community Development Block Grant (CDBG) funds and is administered by the New Castle County Department of Community Services.
The assistance comes as a second mortgage that is recorded against the property, so it sits behind your main home loan. Because it is structured as a deferred 0% loan rather than a grant, it is repaid over time (and in full when you sell or transfer the home), which is what lets the county keep recycling the funds to help more first-time buyers. For most buyers I work with, DPS is the difference between waiting another year to save and getting into a home now.
Watch: New Castle County DPS Program Overview
Key points covered in this video:
- DPS provides up to $10,000 toward down payment and settlement costs for eligible first-time buyers.
- It is a 0% interest second mortgage, with the first two years deferred and the balance repaid over years three through fifteen.
- The home must be in New Castle County, outside the City of Wilmington.
- Total household income (everyone aged 18 and older) must be at or below 80% of the New Castle County area median income.
- You apply through a HUD-approved housing counseling agency, paired with a first mortgage.
How Much Down Payment Help Can You Get?
DPS provides a minimum of $1,000 and a maximum of $10,000 in assistance. The exact amount is based on a HUD-approved housing counselor’s certified estimate of the down payment and/or settlement funds you actually need, supported by a good faith estimate. In other words, the program covers what your transaction requires up to the $10,000 cap rather than handing out a flat amount.
If you borrow the full $10,000, the monthly payment in the repayment period is $64.10 at 0% interest. There is no cash back to the borrower, no refund of the earnest money deposit, and realtor commissions, broker fees, and admin fees cannot be paid by the buyer with these funds. Any excess funds are returned to New Castle County as a principal reduction on the DPS loan.
What Are the New Castle County DPS Loan Terms?
- Loan amount: $1,000 minimum to $10,000 maximum, based on a housing counselor’s certified estimate of need.
- Interest rate: 0%.
- Term: 15-year loan split into two periods. Period 1 is the first two years, when payments are deferred (optional). Period 2 is the remaining 13 years, when monthly payments are required.
- Security: a second mortgage is executed and recorded, and a lien is placed on the property.
- Minimum cash contribution by borrower: $500 of your own funds into the transaction.
- Repayment trigger: the loan must be paid in full when you sell the property or transfer ownership.
Because the DPS payment that begins in year three is added to your housing obligations, it can affect your debt-to-income ratio (DTI). I structure your first mortgage with that in mind so the numbers work both at closing and once repayment starts.
Who Qualifies for New Castle County Down Payment Assistance?
To qualify for the New Castle County DPS Program, most buyers need to meet all of the following, subject to the county’s final determination:
- First-time home buyer: you cannot have owned property in the last three years. If you previously owned a mobile home, you still qualify as a first-time buyer.
- Owner-occupancy: you must occupy the home as your principal residence throughout the entire term of the loan. Non-occupant co-borrowers are not allowed.
- Income limit: total household income may not exceed 80% of the New Castle County area median income as determined by HUD. Gross income is used, and income is counted for every household member aged 18 and older (not just the borrowers on the loan). Household size sets which limit applies.
- Housing counseling: all borrowers must complete a homeownership education program with a New Castle County-recognized, HUD-approved housing counseling agency before closing.
- Residency status: New Castle County cannot issue a DPS loan to non-permanent resident aliens unless asylum has been granted.
The household-income rule is where buyers most often get tripped up, because it counts everyone aged 18 and older living in the home, even adults who will not be on the mortgage. If you are close to the limit, it is worth a quick conversation before you write an offer so there are no surprises.
What Are the 2026 New Castle County DPS Income Limits?
The income limits are set at 80% of the New Castle County area median income and are adjusted for household size by HUD. The figures below are current as of June 2026 and are updated annually, so confirm the latest numbers before you rely on them. Call 302-703-0727 if your household is near a limit.
| Household Size | Maximum Total Household Income (80% AMI) |
|---|---|
| 1 person | $66,850 |
| 2 people | $76,400 |
| 3 people | $85,950 |
| 4 people | $95,500 |
| 5 people | $103,150 |
| 6 people | $110,800 |
| 7 people | $118,450 |
| 8 people | $126,100 |
What Properties Are Eligible?
- Location: existing residential structures or new construction located in New Castle County, outside the incorporated City of Wilmington.
- Maximum selling price: $594,550, set annually based on the FHA median sale price (current as of June 2026).
- Home inspection: the property must be inspected by an ASHI, NAHI, or InterNACHI certified home inspector as a condition of sale.
- Code condition: certain DPS funding may require the property to pass Residential International Building (RIB) Code and New Castle County adopted codes, with repairs completed according to HUD guidelines.
- Lead inspection: all homes built prior to 1978 must have a lead visual inspection.
If the home you want is inside the City of Wilmington, DPS will not apply, but you are not out of options. City of Wilmington buyers can look at the Wilmington First Start down payment program instead, and I can help you figure out which fits.
What First Mortgage Can You Pair With DPS?
DPS is a second mortgage that layers on top of your main home loan, so you pair it with a first mortgage that you qualify for on your own. These are the loan types Delaware first-time buyers most often use alongside DPS, all of which I originate:
- Delaware FHA loans – low down payment and flexible credit, popular with first-time buyers.
- Delaware VA loans – zero down payment for eligible veterans, active-duty service members, and surviving spouses.
- Delaware conventional loans – a strong option when your credit and down payment support it.
- USDA rural home loans – zero down payment in eligible areas of New Castle County and beyond.
You can also compare other state-level assistance through the DSHA loan programs, including DSHA Welcome Home. DSHA and county programs each have their own rules, so let me review your situation before assuming which one fits or whether any can be combined.
New Castle County DPS Program at a Glance
| Feature | Detail (current as of June 2026) |
|---|---|
| Maximum assistance | $10,000 |
| Minimum assistance | $1,000 |
| Interest rate | 0% |
| Loan term | 15 years (first 2 years deferred, 13 years of payments) |
| Monthly payment on full $10,000 | $64.10 (begins year three) |
| Minimum borrower contribution | $500 of your own funds |
| Income limit | At or below 80% of New Castle County area median income (HUD), all household members 18+ |
| Maximum purchase price | $594,550 |
| Location | New Castle County, outside the City of Wilmington |
| Buyer type | First-time buyer (no ownership in the past 3 years) |
| Counseling | HUD-approved homeownership education required before closing |
| Funding source | HUD CDBG funds, administered by New Castle County |
Official New Castle County DPS sources
For the most current rules, funding, income limits, and purchase-price limits, see New Castle County’s own materials. Program terms can change, so confirm against the current county documents before relying on a figure.
How Does New Castle County DPS Compare to Other Delaware Programs?
DPS is one of several down payment assistance options Delaware first-time buyers can consider. Which one fits depends mostly on where you are buying and your income. Income limits, structure, and current amounts vary by program and change over time, so confirm the details before relying on them.
| Program | Where it applies | Assistance | Best for |
|---|---|---|---|
| New Castle County DPS | New Castle County, outside the City of Wilmington | Up to $10,000; 0% second mortgage, 15-year, first 2 years deferred | First-time buyers (no ownership in 3 years) buying in NCC outside the city |
| DSHA down payment assistance | Statewide (Delaware) | Typically 3% to 5% of the loan amount through First State, Keys4You, or Take5 | Buyers statewide; some repeat buyers via DSHA Open Door |
| Wilmington First Start | Inside the City of Wilmington | Up to $15,000 | Buyers purchasing inside the City of Wilmington, where DPS does not apply |
How Do You Apply for the New Castle County DPS Program?
Here is the part that surprises many buyers: the DPS application itself is taken by a HUD-approved housing counseling agency and submitted to New Castle County, not filed directly with the county or with me. My role is to originate and structure your first mortgage and coordinate with the counseling agency and the county so everything lines up. You should allow about 20 days for processing from the date the county receives a complete application. New Castle County does not issue final eligibility documentation until a complete application has been reviewed and the applicant has been determined eligible.
To income-qualify, expect to provide the following income documents:
- Most recent federal tax return with W-2s (two years, plus a signed year-to-date profit and loss statement if you are self-employed).
- Most recent pay stubs covering three months.
- Most recent bank statements covering three months for all accounts, with an explanation for any non-payroll deposits of $100 or more.
- Documentation for any Social Security, disability, pension, unemployment, or other income that applies.
The full application package also includes:
- DPS application forms and a copy of your state or federal photo ID.
- Your housing counseling certificate.
- Credit report and mortgage commitment.
- Real estate agreement of sale.
- Final property appraisal (not subject to repairs) and the home inspection.
- Lead visual inspection for homes built before 1978.
- Loan estimate and a 1003 application listing the DPS loan, its monthly payment, and the loan amount.
Applications go through a New Castle County-recognized, HUD-approved housing counseling agency. As of the current program materials, these agencies include Clarifi (1-800-989-2227), First State Community Action Agency (302-498-0454), Housing Opportunities of Northern DE / HOND (302-429-0794), Interfaith Community Housing of Delaware (302-652-3991), NeighborGood Partners, formerly NCALL Research (302-678-9400), Neighborhood House (302-658-5404), and YWCA Homeownership Education (302-224-4060). For county program details, the New Castle County Department of Community Services publishes program information on its official DPS program page; the DPS program office is in the Gilliam Building, 77 Reads Way, New Castle, DE 19720, 302-395-5600. The simplest first step is to call me at 302-703-0727 and I will help you line up counseling, your first mortgage, and the DPS application in the right order.
When New Castle County DPS May Not Be the Right Fit
DPS is a great tool, but it is not the right answer for every buyer. It may not fit if:
- You are buying inside the City of Wilmington – DPS excludes the city, so look at the Wilmington First Start program instead.
- Your total household income (all members 18 and older) is above 80% of area median income – compare the DSHA loan programs, which use different income rules and limits.
- You need more than $10,000 – DPS caps at $10,000, so a larger DSHA down payment assistance program or a seller credit may close the gap better.
- You have owned a home (other than a mobile home) in the last three years – you would not meet the first-time buyer definition for this program.
- You cannot occupy the home as your primary residence, or you need a non-occupant co-borrower to qualify – DPS does not allow either.
If any of these apply to you, do not assume you are out of options. There are several Delaware down payment assistance programs, and the right one depends on where you are buying, your income, and how much help you need.
Buying in New Castle County? Communities DPS Can Help
DPS can help eligible first-time buyers purchasing outside the City of Wilmington across New Castle County communities such as Newark, Bear, Middletown, Hockessin, Pike Creek, Glasgow, Claymont, New Castle, and Townsend. The address matters: homes inside the City of Wilmington use a different city program, so it is worth confirming the property’s jurisdiction before you write an offer. If you are shopping in a specific town, these local pages are a good next step:
- Newark first-time buyers using New Castle County DPS
- Bear buyers using New Castle County down payment assistance
- Middletown homebuyers and New Castle County DPS
- Hockessin homebuyers and New Castle County DPS
- Pike Creek homebuyers and New Castle County DPS
Example (hypothetical): Say a first-time buyer in Bear is purchasing a home outside the City of Wilmington and needs help with down payment and closing costs. If they meet the income, location, and first-time-buyer rules, the DPS Program may be able to provide up to $10,000 toward eligible down payment and settlement costs, paired with their first mortgage. They would still contribute at least $500 of their own funds, and the final assistance amount and approval depend on the housing counselor’s certified estimate, household income, the property, and New Castle County’s review. This is an illustration, not a quote or an approval.
New Castle County DPS Program FAQ
How much money can I get from the New Castle County DPS Program?
The DPS Program provides a minimum of $1,000 and a maximum of $10,000 in down payment and settlement assistance. The exact amount is based on a HUD-approved housing counselor’s certified estimate of what your transaction actually needs, supported by a good faith estimate, rather than a flat amount for everyone.
Do I have to pay the DPS loan back?
Yes. DPS is a 0% interest second mortgage, not a grant, and it is not forgivable. The first two years are deferred, then monthly payments run for the remaining 13 years of the 15-year term. If you borrow the full $10,000, the payment is $64.10 per month. The loan must be paid in full when you sell the property or transfer ownership.
Can I use DPS if I am buying a home in the City of Wilmington?
No. The DPS Program covers properties in New Castle County outside the incorporated City of Wilmington. If you are buying inside the city, the Wilmington First Start program is the better fit. Call 302-703-0727 and I will help you confirm which program applies to the address you are considering.
Does everyone in my household’s income count toward the DPS income limit?
Yes. For the DPS Program, gross income is counted for every household member aged 18 and older, even adults who will not be on the mortgage, and total household income may not exceed 80% of the New Castle County area median income as set by HUD. This is different from some state programs, so it is worth reviewing your household income early if you are near a limit.
Can I use New Castle County DPS with an FHA or VA loan?
DPS is a second mortgage that pairs with a first mortgage you qualify for on your own. First-time buyers in Delaware most commonly pair it with an FHA, VA, conventional, or USDA loan, all of which I originate. I structure the first mortgage so the DPS second sits behind it cleanly and the combined payment still works for your budget.
I owned a mobile home before. Am I still a first-time buyer for DPS?
Yes. Under the DPS Program, you are considered a first-time home buyer if you have not owned property in the last three years, and prior ownership of a mobile home does not disqualify you. If you owned other real estate within the last three years, you generally would not meet the first-time buyer definition for this program.
Can a non-occupant co-signer help me qualify for DPS?
No. The DPS Program does not allow non-occupant co-borrowers, and you must occupy the home as your principal residence for the entire term of the loan. If you need a co-borrower to qualify for financing, we should look at first-mortgage options or other assistance programs that allow it.
What credit score do I need for the DPS Program?
The DPS materials do not publish a specific minimum credit score for the assistance itself; your credit is evaluated through the first mortgage you pair with DPS. Each loan type sets its own credit standards, and some products are more flexible than others. Call 302-703-0727 and we can review where your credit stands and which first mortgage gives you the best path.
How do I apply for the New Castle County DPS Program?
DPS applications are taken by a HUD-approved housing counseling agency and submitted to New Castle County, not filed directly with the county or with me. I originate and structure your first mortgage and coordinate with the counseling agency and the county so the pieces line up. The easiest first step is to call 302-703-0727 so we can sequence counseling, your first mortgage, and the DPS application correctly.
How long does DPS approval take?
You should allow about 20 days for processing from the date New Castle County receives a complete application. New Castle County does not issue final eligibility documentation until a complete application has been reviewed and the applicant has been determined eligible, so it helps to have your documents and counseling certificate ready before you write an offer.
About the Author: John R. Thomas
John R. Thomas is a mortgage loan officer with Primary Residential Mortgage, Inc. in Newark, Delaware, with more than 20 years of experience helping first-time buyers across Delaware and Maryland use down payment assistance programs like New Castle County DPS. He is the author of “Your Guide to Buying Your First Home in Delaware” and a frequent host of free Delaware home buyer seminars.
John holds a BS in Physics Education from the University of Delaware and an MS in Curriculum and Instruction from Delaware State University – a teaching background that shapes how he explains programs like DPS in plain language. He is licensed in 17 states (AL, DC, DE, FL, GA, IN, KS, MD, MN, MO, NC, NJ, OH, PA, SC, TN, VA). NMLS #38783.
Years 3,000+
Buyers Helped 1,000+
First-Time Buyers DE & MD
Service Area PRMI
Newark, DE
John Thomas Team – Primary Residential Mortgage, Inc.
248 E Chestnut Hill Rd, Newark, DE 19713 | 302-703-0727 | team@johnthomasteam.com
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Last Updated: June 2026. Mortgage content reviewed by John R. Thomas, NMLS #38783.
John Thomas, NMLS #38783 | Primary Residential Mortgage, Inc. | 248 E Chestnut Hill Rd, Newark, DE 19713 | 302-703-0727 | delawaremortgageloans.net
The New Castle County Down Payment and Settlement (DPS) Program is administered by New Castle County and funded by HUD; program terms, income limits, and the maximum purchase price are set by the county and HUD and are subject to change. Eligibility is determined by New Castle County. Copyright John R. Thomas, All Rights Reserved.
