March 5, 2009

Delaware Will Partner with Federal Stimulus Funds to Help More Delawareans Achieve the American Dream, Spur Economy

WILMINGTON – Gov. Jack Markell announced Thursday that the state’s housing authority will be offering incentives that, combined with a tax credit in the federal economic recovery package, will help more Delawareans become first-time homeowners and get our economy moving again.

The federal plan to stimulate the economy includes a first-time homeowner’s tax credit equivalent to 10% of the purchase price of the home, up to $8,000.  To maximize the benefit of the tax credit, the Delaware State Housing Authority has lowered its 30-year fixed-rate mortgage interest rate to 5.5%, with zero origination points. As an even further boon for homebuyers, these programs can now also be used in conjunction with DSHA’s Second Mortgage Assistance Loan Program (SMAL) which provides up to $10,000 in down payment and closing cost assistance.

Markell and Anas Ben Addi, Director of the State Housing Authority, announced the new programs at the Delaware Economic Development Office to highlight the economic impact of increasing homeownership.  

“In recent years, it has become increasingly difficult for hard-working middle-class Delawareans to afford a home of their own. Helping more of our neighbors realize this dream will create jobs, which is the only long-term solution to historic challenges we face,” Markell said. “Given the financial predators that helped hasten the collapse of the national housing market, I understand if there is some hesitancy to consider homeownership at this moment. But the loans from the State Housing Authority will be ones qualified buyers can trust and credit they can use.”

The federal tax credit is available to qualified first-time homebuyers who purchase homes between January 1, 2009 and December 1, 2009.  The tax credit does not have to be repaid unless the homeowner sells the home within the first three years.    

“Based on income and other first-time homebuyer guidelines, we anticipate that nearly 100% of our borrowers will qualify for the new federal tax credit,” Ben Addi said. “Since the credit will not be realized until tax time, buyers may still face a barrier to homeownership – the resources needed up front.  We hope that these program changes help to meet that need, help them overcome this obstacle and fill the funding gap.”

Buyers are advised to seek tax advice from a qualified advisor for specifics of their personal tax liability. Applying for the credit requires no additional paperwork, other than that submitted with the buyer’s tax return preparation. 

For more information, please visit DSHA’s website at www.DeStateHousing.com, or call them at (888) 363-8808.