Sussex County Housing Trust Fund Homebuyer Assistance Program in Delaware

You will see this program called the Sussex County down payment assistance program almost everywhere, including on our own site historically. That name is worth correcting up front: the money is real, but it can only be applied to closing and settlement costs, not to your down payment. You also do not have to be a first-time buyer, and Round 5 funding opened July 1, 2026. And if you have read about it anywhere else, there is a good chance you were told it pays between $10,000 and $30,000 based on your income tier. That was true when the Housing Trust Fund launched in 2022. It is not true now, and I would rather correct it here than have you find out at the settlement table. Sussex County pays a flat $20,000, it goes to closing costs only, and there is no tier ladder anymore. My name is John Thomas, I have been originating mortgages in Delaware since 2003, and this page walks through what the County actually publishes today – including three or four rules that disqualify more Sussex buyers than the income limit does.

The short version: this is real money, it is meaningfully larger than what most Delaware down payment assistance programs pay, and it stacks with a DSHA down payment assistance second in a way that can put a Sussex buyer into a house with very little out of pocket. It is also administered by the County rather than by a lender, which means the rules are not the rules you are used to seeing on a Delaware down payment assistance program, and the sequence matters. Call 302-703-0727 and we will tell you within one conversation whether the asset test alone rules you out.

A note on this video: it was recorded in May 2022, when the program still paid $10,000, $20,000 or $30,000 on an income-tier ladder and could be applied to the down payment. The current terms are a flat $20,000 for closing and settlement costs only. Where the video and the text below disagree, the text is current.

What Is the Sussex County Housing Trust Fund Homebuyer Assistance Program?

The Sussex County Housing Trust Fund (SCHTF) is a county-run affordable housing fund administered by the Sussex County Community Development and Housing Department. It has two halves. One half is a Development Fund that makes grants to builders and nonprofits creating affordable units. The other half – the one that matters if you are buying a house – is Direct Homebuyer Assistance, which puts money directly into a qualifying buyer’s settlement.

The fund exists because of the County’s own research. During the 2018 Comprehensive Plan process, Sussex residents raised the shortage of affordable housing often enough that County Council commissioned an outside study. That study, published in fall 2019 as the Housing Opportunities and Market Evaluation report, recommended establishing a local housing trust fund. County Council authorized the fund in April 2022 with a $500,000 general fund seed and $6.3 million in American Rescue Plan Act money, and created a five-member advisory board to oversee approvals.

Two things follow from that history that are worth understanding before you plan around this program. First, it is a county program, not a state program and not a lender program. Sussex County sets the rules, Sussex County holds the second mortgage, and Sussex County decides who is eligible. That is why the eligibility rules do not look like the DSHA rules you may have already read. Second, it is funded by appropriation rather than by an ongoing revenue stream, so the money is finite each year and the County says so plainly.

How Much Money Can You Get from the Sussex County Housing Trust Fund?

$20,000. One amount, one tier, for every household that qualifies. There is no sliding scale, no income-tier ladder, and no way to get more than $20,000 by having a lower income or a larger family. If your household income is under the 120% AMI limit for your household size, the award is $20,000. If it is over, the award is nothing.

The second thing to understand about the money is what it can pay for. Sussex County restricts Direct Homebuyer Assistance to closing and settlement costs only. It cannot be applied to your down payment. You cannot receive any of it back at settlement, and you cannot use it to reimburse yourself for the earnest money deposit or the prepaid items you already paid out of pocket. If the assistance exceeds your actual settlement costs, the County directs the excess to be applied as a principal curtailment on your first mortgage. A principal curtailment is a one-time payment applied directly against the loan balance rather than to interest or escrow – it lowers what you owe and shortens the loan, but you never see the money.

In practice that is still a substantial benefit. On a typical Sussex County purchase, settlement costs including transfer tax, title work, lender fees and prepaid escrows can run well into five figures, so $20,000 will often cover the entire closing side of the transaction. What it will not do is get you into a house with no down payment. For the down payment you will generally pair this with an FHA loan at 3.5% down, a zero-down VA loan or USDA Rural Housing loan, or a DSHA down payment assistance second.

Is the Sussex County Housing Trust Fund DPA Actually Down Payment Assistance?

It is searched as DPA almost universally, and it is listed as a down payment assistance program by the County, by aggregator sites and historically by us. Under the current rules, though, the funds can only be applied to closing and settlement costs. So the honest answer is: it is county homebuyer assistance that most people call DPA, but it will not cover your down payment.

That distinction is not pedantic – it changes how you have to budget. If you are buying with an FHA loan at 3.5% down on a $325,000 home, you still need roughly $11,375 for the down payment itself, and none of the County’s $20,000 can go toward it. What the $20,000 does is take the closing side of the transaction off your plate almost entirely. Buyers who need help with the down payment specifically should pair this with a DSHA down payment assistance second, or use a zero-down VA or USDA first mortgage, which removes the down payment requirement altogether.

Why You Will Still See the $10,000 to $30,000 Figure Online

When the Housing Trust Fund launched in spring 2022, the Direct Homebuyer Assistance program did use a three-tier structure that paid $10,000, $20,000 or $30,000 depending on where the household fell against area median income. That structure is gone. Sussex County consolidated it into a single $20,000 award, and at the same time narrowed the permitted use from down payment and closing costs to closing costs only.

The old numbers are still circulating widely – on national aggregator sites, on real estate blogs, in AI-generated answers, and until this update on this page as well. I would rather own that than let it stand. Here is the correction table.

What Are the 2026 Income Limits for the Sussex County Housing Trust Fund?

Your household must earn less than 120% of the Sussex County area median income for your household size. Sussex County uses HUD’s annually published income limits and updates the table each year. The figures below are the County’s own published limits, effective May 1, 2026.

Note the word “under.” These are ceilings you must be below, not thresholds you must reach. A four-person household at $123,840 exactly does not qualify. Note also that these limits are generous by Delaware down payment assistance standards – 120% of AMI is a higher ceiling than most DSHA programs use, which is why some Sussex buyers who are over the DSHA income limit still have a path here.

Whose Income Counts, and Why Sussex Counts It Differently Than DSHA

This is the rule that causes the most confusion, because Sussex County and the Delaware State Housing Authority do the arithmetic in opposite directions, and buyers routinely apply the wrong one to the wrong program.

Sussex County counts all adult wage earners in the household for income eligibility, even if they will not be on the mortgage or the deed. Leaving someone off the loan does not remove their income from the County’s calculation. Two carve-outs apply: the earned income of a dependent full-time student aged 18 or older is excluded above $480 annually, and unearned income belonging to minors is counted.

DSHA works the other way. Since April 15, 2025, DSHA Welcome Home counts only the income of borrowers who will be on the Note and Mortgage, and DSHA Open Door counts only the qualifying income on the loan application. Household size still sets which income tier applies, but a non-borrowing adult’s paycheck does not land in the DSHA calculation the way it lands in the Sussex County calculation.

The practical consequence: a Sussex household with an adult child working full time, or a partner deliberately left off the loan to protect a debt-to-income ratio, may clear the DSHA limit comfortably and still fail the County’s. If your household has more than one earner, run the County math before you plan around the $20,000. You can read more about how lenders treat income on our page explaining your debt-to-income ratio.

What Is the $15,000 Liquid Asset Rule and Who Does It Disqualify?

If one rule ends more Sussex County Housing Trust Fund applications than any other, it is this one. Your household’s liquid assets must stay under $15,000 – and the test is not a snapshot on application day. Sussex County disqualifies an applicant who held $15,000 or more at any point in the 90 days before the County received the referral application, and continues testing through the date of closing.

What counts as a liquid asset is broader than most buyers expect:

• Cash, checking accounts and savings accounts
• Business accounts
• Balances held on financial platforms including CashApp, Venmo, PayPal and Chime
• Liquid assets belonging to minors in the household
• Proceeds from the sale of a home you are selling – anything over $15,000 disqualifies

One notable exclusion: the value of land is not counted unless the land is converted into a liquid asset.

Related to the asset test, there is a property ownership rule: from the time of application through settlement, you cannot own any real property other than a current primary residence that is being sold before the purchase. Owning a rental, a lot, or an inherited share of a family property will end the application even if your income and assets are fine.

The 60-Second Qualification Checklist

Before you book counseling or call anyone, run these seven questions. A no on any one of them generally ends the Sussex County path, though it rarely ends the purchase – there is usually a DSHA route worth pursuing instead.

• Is the home you are buying located in Sussex County, Delaware? Eligibility follows the property, not you. Check the parcel county near the Milford line.
• Will it be your primary residence? Investment properties and second homes are out.
• Is your household income under the 120% AMI limit for your household size? Count every adult wage earner, including anyone who will not be on the loan.
• Have your household liquid assets stayed under $15,000 for the past 90 days? Include business accounts, digital wallet balances and minors’ accounts.
• Do you own any other real property? A current primary residence being sold before this purchase is the only permitted exception.
• Will your first mortgage be fixed rate with no prepayment penalty? Adjustable-rate loans are not eligible.
• Can you complete 8 hours of HUD-approved counseling and absorb roughly six weeks of County processing? Both sit on top of a normal mortgage timeline.

Seven yeses means it is worth a conversation. Call 302-703-0727 and we will verify the income calculation and the asset history before you commit eight hours to counseling.

Check Your Eligibility in 60 Seconds

The checklist above is the same set of rules in question form. If you would rather have the numbers checked against the County’s published limits for you, the screener below does it in your browser. Nothing you type is sent anywhere, there is no email box, and no one is notified that you used it.

One thing the screener cannot do is make the decision. Sussex County Community Development and Housing determines who is eligible and how much funding remains, and a HUD-approved counseling agency submits the application. What the tool does is tell you whether it is worth starting, and which rule to look at first if it is not.

What Are the Terms of the Sussex County Second Mortgage?

The $20,000 is secured by a soft second mortgage recorded against the property. The terms Sussex County publishes:

• 0% interest. The loan does not accrue interest.
• No required monthly payments for as long as you live in the home as your primary residence.
• Repayable only on sale or transfer of the property. Those are the triggering events.
• Prorated repayment. If a triggering event happens inside the first ten years, you repay the award discounted for the years you owned the home – not the full $20,000.
• Satisfied after 10 years. If no triggering event occurs, the mortgage is considered satisfied and forgiven in full.

There is one term buyers almost never hear about until it matters, and it deserves its own paragraph. Sussex County states that the assistance will not be subordinated unless there is adequate equity to cover the SCHTF assistance amount. Subordination is what lets a second mortgage stay in second position when you refinance the first. If you plan to refinance in year three or year four and your equity has not grown enough to cover the County’s $20,000 behind a new first mortgage, the County is not obligated to subordinate – which can mean paying the prorated balance off in order to refinance at all. That is not a reason to skip the program. It is a reason to build your refinance expectations around it rather than assuming you can move the first mortgage freely.

Two more requirements sit alongside the mortgage itself. Sussex County must be named as a loss payee on your homeowners insurance policy, and you are required to purchase lender’s title insurance in favor of Sussex County. Our page on owner’s title insurance explains how lender’s and owner’s policies differ.

What Types of Homes and Mortgage Loans Qualify?

The home must be located in Sussex County, Delaware, and it must be your primary residence at all times during the ten-year term. Eligible property types are:

• Single-family homes
• Duplexes
• Townhomes
• Manufactured homes on permanent foundations
• Modular homes
• New construction homes

Note that duplexes are eligible here. That is worth flagging because not every Delaware municipal assistance program allows multi-unit property – the City of Dover’s First Start program, for example, does not. Sussex County does.

A home inspection is required for existing homes, and a Certificate of Occupancy is required for new construction. The County also evaluates property eligibility against the standards of Chapter 71 of the Sussex County Code. If you have not been through an inspection before, our guide to the home appraisal covers the related valuation step.

On the mortgage side, your first mortgage must be fixed rate with no prepayment penalty. That single sentence rules out adjustable-rate mortgages entirely, which is a restriction the legacy version of this page never mentioned. Within fixed-rate options you can use:

• FHA Loan – 3.5% down with a 580 or higher credit score, the most common pairing on Sussex Housing Trust Fund files
• VA Loan – zero down for eligible veterans and service members
• USDA Rural Housing Loan – zero down, and most of Sussex County sits inside an eligible rural area
• Conventional Loan – as little as 3% down for a qualifying first-time buyer

Can You Stack the Housing Trust Fund with DSHA Down Payment Assistance?

This is where the program gets genuinely powerful, because the two forms of assistance solve different halves of the same problem. The Sussex County Housing Trust Fund pays closing costs. DSHA down payment assistance pays the down payment. Used together on a file that qualifies for both, a Sussex buyer can get very close to covering the full cash requirement.

DSHA’s Delaware Mortgage Program offers two first-mortgage tracks – Welcome Home for first-time buyers and Open Door for first-time and repeat buyers – each pairing with a down payment assistance second:

One caution on stacking. Because the Sussex County assistance is restricted to closing costs and cannot be refunded, having too much closing cost help is possible. If a seller credit plus the County’s $20,000 exceeds your actual settlement charges, the excess County money becomes a principal curtailment rather than cash to you – so on a file with a large seller credit already negotiated, there may be less benefit than the headline number suggests. That is a conversation worth having before the offer goes in rather than a week before settlement. Our guide to seller-paid closing costs covers how those credits are capped by loan type.

Buyers looking outside Sussex should compare the county and city equivalents: the City of Dover First Start program in Kent County, the New Castle County DPS program, and the City of Wilmington First Start program. Each has its own income rules, and none of them transfer to a Sussex County purchase.

How Do You Apply for the Sussex County Housing Trust Fund?

The order of operations here trips people up, because there are two applications running in parallel – the mortgage application and the County’s referral application – and they are submitted by different people.

What Are the Housing Counseling Requirements?

Every buyer using the Sussex County Housing Trust Fund must complete at least 8 hours of pre-purchase homeownership counseling through a HUD-approved agency and receive a completion certificate. The counseling agency is also the party that submits your application to the County, so choosing an agency is not an administrative afterthought – it is how you enter the program.

Sussex County lists these HUD-approved agencies:

• NeighborGood Partners (formerly NCALL Research) – (302) 855-1370
• First State Community Action Agency – (302) 856-7761
• Interfaith Community Housing of Delaware – (302) 652-3991 x100
• Neighborhood House – (302) 658-5404 x118

Counseling agencies verify employment within the last 30 days and will ask for paystubs, verification of employment forms, tax returns or letters on company letterhead. Other income sources such as Social Security, pension, child support, alimony and annuity payments are documented with award letters, statements or court orders. Every adult household member provides photo identification, and birth certificates are required for all household members over one year old.

What Documents Will You Need?

Two document sets run in parallel: what the counseling agency needs for the County referral application, and what we need for the mortgage. There is heavy overlap, so gathering once serves both. For the County side, expect to provide:

• Photo identification for every adult household member
• Birth certificates for all household members over one year old
• Employment verification dated within the last 30 days – paystubs, a verification of employment form, or a letter on company letterhead
• Federal tax returns
• Award letters, statements or court orders for any other income – Social Security, pension, child support, alimony, annuity payments
• Bank statements covering the liquid asset look-back, including any business accounts and digital wallet balances
• Your 8-hour homeownership counseling completion certificate
• The ratified purchase contract, once you are under contract
• The home inspection report on an existing home, or the Certificate of Occupancy on new construction

One point on bank statements that catches people. Large or multiple deposits will generate requests for additional documentation, and here that scrutiny runs deeper than it does on a standard mortgage file. A lender typically reviews two months of statements; Sussex County is testing 90 days of balances against the $15,000 ceiling. A deposit that a lender would clear with a simple gift letter can still matter to the County if it pushed your balance over the line at any point in that window. Document every non-payroll deposit as it happens rather than reconstructing it later, and tell us about anything unusual early – it is far easier to explain a transfer in advance than to unwind an asset finding after the counselor has already submitted.

What Does the Timeline Look Like from Application to Settlement?

Sussex County publishes real processing minimums, and building a contract around them is the difference between a smooth settlement and an extension request:

• 15 business days minimum to process a complete application from the date the County receives it.
• 15 business days before settlement is the deadline to submit the request for funds and settlement information to Community Development and Housing.
• Up to 7 days for the wire transfer to be requested and delivered to the settlement agent.
• 15 days to appeal an eligibility denial to the Director, who responds within 15 days; a further appeal goes to the Finance Director / Chief Operating Officer, whose decision is final.
• 6 months minimum wait to re-apply after a denial. The wait applies to all household members.

Read those together and the practical planning number is roughly six weeks of County process on top of a normal mortgage timeline, assuming your file is complete the first time. Large or multiple deposits and transfers in your bank statements will trigger requests for additional documentation and can extend it further – the same documentation discipline our mortgage loan dos and don’ts page covers applies with extra force here, because the County is testing 90 days of balances rather than the two months a lender typically reviews.

What Does the Buyer Pay to Use This Program?

The $20,000 is not free of associated cost, and the County is explicit about what the borrower carries:

• The cost of loan document preparation for the County’s second mortgage
• The mortgage recording fee for the County’s second mortgage
• Lender’s title insurance issued in favor of Sussex County
• Naming Sussex County as loss payee on the homeowners insurance policy
• The home inspection on an existing home

None of these are large relative to $20,000, but they are real settlement line items and they should be in your estimate from the beginning. While we are on settlement costs: Delaware’s realty transfer tax is a significant piece of any purchase here. Under the standard Delaware Association of Realtors contract it is split 2% buyer and 2% seller. Builder contracts frequently require the buyer to pay the full 4%, which on new construction in Sussex County can add many thousands of dollars to the buyer’s side – and since this program is restricted to closing costs, that distinction directly affects how far the $20,000 goes. Eligible first-time buyers may also qualify for the Delaware first-time home buyer transfer tax exemption. Always read the transfer tax clause before signing a builder contract.

When the Sussex County Housing Trust Fund Is Not a Good Fit

Plain elimination criteria, because knowing early saves everyone time:

• You have held $15,000 or more in liquid assets in the last 90 days. This is the most common disqualifier and the hardest to work around, since the look-back is already behind you.
• You need help with the down payment rather than closing costs. This program cannot touch the down payment. A DSHA down payment assistance second is the right tool for that.
• Your household income is at or above the 120% AMI limit for your household size, counting every adult wage earner whether or not they are on the loan.
• You own other real property that is not a current primary residence being sold before this purchase.
• You want an adjustable-rate mortgage. The first mortgage must be fixed rate with no prepayment penalty.
• You are buying outside Sussex County, or buying an investment property or second home.
• You expect to sell or refinance within a few years. The prorated repayment and the non-subordination clause both bite hardest in years one through five.
• You cannot commit to 8 hours of counseling or need to close faster than the County’s processing minimums allow.

If any of those describe you, the answer is usually another program rather than no program. Sussex buyers who miss this one frequently qualify for DSHA Open Door with a down payment assistance second, or for DSHA Smart Start if they have the cash but want DSHA’s below-market first mortgage rate without a second attached. Buyers purchasing a home that needs work should look at Diamond in the Rough.

Common Mistakes That Cost Sussex Buyers the $20,000

The section above covers who is disqualified by status. This one covers what otherwise-eligible buyers do to themselves. Every item here is avoidable with a conversation before the fact.

• Letting a gift or a windfall land before you ask. A down payment gift from family, a tax refund, a bonus or the proceeds from selling a car can push you past $15,000 inside the look-back window. Ask before the money moves, not after.
• Assuming the down payment is covered. The single most common misread of this program. Budget the down payment separately or pair a DSHA assistance second.
• Starting the County process after the contract is ratified. With a 15-business-day processing minimum and a funding request due 15 business days before settlement, a standard 30-day contract leaves no room. Counseling and pre-approval belong before you write offers.
• Treating a Pre-Determination Letter as secured money. It confirms eligibility. It reserves nothing. Only the Pre-Approval Letter, issued once you are under contract, holds funds.
• Leaving an earner off the loan to fix a ratio. That tactic works for debt-to-income. It does nothing for County income eligibility, which counts all adult wage earners regardless of who signs.
• Negotiating a large seller credit without recalculating. Stack a generous credit on top of $20,000 and you can exceed your actual settlement charges. The excess becomes a principal curtailment, not cash – so the credit may have been worth trading for a lower price instead.
• Choosing an adjustable-rate first mortgage. The first mortgage must be fixed rate with no prepayment penalty. An ARM ends the application.
• Signing a builder contract without reading the transfer tax clause. If the builder shifts the full 4% to the buyer, thousands of dollars land on the closing side and consume the assistance you were counting on for other costs.
• Moving money between accounts to look organized. Transfers create documentation requests and can obscure where the balance actually sat during the look-back. Leave accounts alone once the process starts.
• Planning a refinance around year three. The County is not obligated to subordinate without adequate equity, which can force a payoff to refinance at all.

What Happens If the Funding Runs Out?

Sussex County states the mechanic directly: funds are available on a first-come, first-served basis until exhausted, and are typically replenished annually on July 1. As of July 1, 2026, Round 5 funding is available. The County posts funding status updates on its Homebuyer Assistance page, and because the fund is appropriated rather than continuously replenished, that page is the only reliable place to confirm current availability – including this one.

What that means for your contract: a Pre-Approval Letter reserves funds until the expiration date printed on it, so being under contract with a valid pre-approval is the protection against a mid-transaction shortfall. A Pre-Determination Letter does not reserve anything. If funding is exhausted before your file reaches pre-approval, the realistic options are to wait for the next July 1 replenishment or to restructure the purchase around a DSHA down payment assistance program and a negotiated seller credit. That is a conversation to have while you still have contract contingencies, not after.

Serving Sussex County Home Buyers

The John Thomas Team originates throughout Sussex County – Georgetown, Seaford, Milford, Milton, Laurel, Bridgeville, Lewes, Rehoboth Beach, Millsboro, Selbyville, Dagsboro, Frankford and the surrounding communities. Our office is in Newark, Delaware rather than in Sussex County, and the whole process runs by phone, email and secure document upload, so where the office sits has no bearing on how a Sussex file is handled. Buyers in the Milford area can also see our Milford Delaware mortgage loans page, which covers the Kent and Sussex county line that runs through that market.

One geography note specific to this program: eligibility follows the property, not the buyer. A buyer living anywhere can use the Sussex County Housing Trust Fund as long as the home being purchased is in Sussex County and will be their primary residence. Conversely, a lifelong Sussex resident buying in Kent County cannot use it. If you are not certain which county a property sits in – and near the Milford line that is a real question – confirm the parcel before you build a plan around the $20,000.

New to the process entirely? Start with our Delaware first-time home buyer guide, or browse the full Delaware home buyer information library. If credit is the open question, our page on the five factors of credit scoring explains what actually moves a mortgage score, and if family is helping with funds, read gift funds and gift of equity guidelines first – a gift landing in your account can push you over the County’s $15,000 asset ceiling.

FAQ – Sussex County Housing Trust Fund