# Delaware mortgages: the realty transfer tax, low property taxes and DSHA loans

> Delaware mortgage numbers: the 2.5% state realty transfer tax and first-time buyer cut, a 0.47% property tax rate and DSHA 0% second mortgages.

URL: https://mail.mortgage-math-us.com/location/delaware/  
Last reviewed: 2026-10-29 · By the MortgageMath US Editorial team

## Quick answer

The median Delaware home ($371,600) costs about **$2,744 a month** with 10% down at the 7.24% national average rate, helped by a low 0.47% effective property tax rate. The catch is at closing: the state realty transfer tax of 2.5% — 3% where no local tax applies — is the highest statewide rate in the country, on top of any county or town tax, and is usually split with the seller. First-time buyers get up to $2,000 off their share, and DSHA adds 0% second mortgages of up to 5% of the loan.

## Key facts

| Fact | Value | Source | As of |
|---|---|---|---|
| State realty transfer tax | 2.5% | [Delaware Division of Revenue](https://revenue.delaware.gov/first-time-home-buyer-tax-credit/) | Apr 16, 2024 |
| First-time buyer reduction, up to | $2,000 | [Delaware Division of Revenue: First-Time Home Buyer Tax Credit](https://revenue.delaware.gov/first-time-home-buyer-tax-credit/) | Oct 29, 2026 |
| Effective property tax rate | 0.47% | [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25103?g=040XX00US10) | 2024 ACS 1-year |
| Homes lived in by their owners | 73.8% | [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25003?g=040XX00US10) | 2024 ACS 1-year |
| Median home value in Delaware | $371,600 | [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25077?g=040XX00US10) | 2024 ACS 1-year |
| DSHA second mortgage, up to | 5% | [Delaware State Housing Authority: Homeownership Loans](https://www.destatehousing.com/homeownership-loans/) | Sep 23, 2026 |
| DSHA minimum credit score | 620 | [Delaware State Housing Authority: Homeownership Loans](https://www.destatehousing.com/homeownership-loans/) | Sep 23, 2026 |

## Delaware’s realty transfer tax

Delaware’s state realty transfer tax is 2.5% of the price where a county or municipality also charges a transfer tax, and 3% where none does. Local taxes come on top, so the combined rate depends on the town. Buyer and seller typically split the total equally, although the contract can say otherwise.

*State realty transfer tax on the median home ($371,600)*

| | Amount |
|---|---:|
| State tax at 2.5% | $9,290 |
| Buyer’s half | $4,645 |
| First-time buyer reduction | −$1,858 |
| **First-time buyer’s share of the state tax** | **$2,787** |
| State tax at 3% (no local tax) | $11,148 |

Add the county or town tax and the CFPB’s typical 2%–5% of the price for lender, title and prepaid costs. The [closing cost estimator](https://mail.mortgage-math-us.com/tools/closing-cost-calculator/?state=DE) splits the state tax for you.

## The first-time buyer transfer tax cut

If you have never held a direct legal interest in residential real estate and will make this home your principal residence, Delaware cuts your share of the state transfer tax by 0.5% of the price — for most buyers from 1.25% to 0.75% of the price. The reduction applies to the first $400,000 of value, so it is capped at $2,000; on the median home it is worth $1,858. You claim it at closing; eligible buyers who paid the full rate can ask the Division of Revenue for a refund.

Delaware’s definition is stricter than the “no home in 3 years” rule many loan programs use: owning a home at any point disqualifies you. See [who counts as a first-time buyer](https://mail.mortgage-math-us.com/first-time-buyers/who-counts-as-first-time/).

## Low property taxes in a state of owners

Census data put the median Delaware property tax bill at $1,750 a year, an effective rate of 0.47% — the 8th-lowest among the states and DC. On the median home that is about $1,747 a year, against $3,307 at the national ratio of 0.89%. Delaware also stands out for ownership: 73.8% of occupied homes are owner-occupied, the 2nd-highest share in the country and above the US share of 65.3%.

Bills come from the county, the school district and, in towns, the municipality, so ask for the latest tax statement on any home you consider.

## Payment on a median Delaware home

> **Worked example: $371,600 home, 10% down, 30-year fixed at 7.24%**
>
> | Monthly cost | Amount |
> |---|---:|
> | Principal and interest on $334,440 | $2,279 |
> | Property tax at 0.47% | $146 |
> | Homeowners insurance (national average, $4.90 per $1,000) | $152 |
> | PMI (midpoint of Freddie Mac’s typical range) | $167 |
> | **Total** | **$2,744** |

On the median household income of $87,534, Freddie Mac’s 30% guideline allows $2,188 a month — enough for about **$296,000** with 10% down, $75,600 below the median home value. Test other prices in the [mortgage payment calculator](https://mail.mortgage-math-us.com/tools/mortgage-payment-calculator/?price=372000&down=10&tax=0.47&state=DE) or start from your income in the [affordability calculator](https://mail.mortgage-math-us.com/tools/affordability-calculator/?state=DE&income=87534).

## DSHA Welcome Home, Open Door and the 0% seconds

The Delaware State Housing Authority (DSHA) offers 30-year fixed first mortgages through participating lenders, each with a minimum credit score of 620; borrowers at 659 or below must complete housing counseling.

| Option | What it is | Works with |
|---|---|---|
| Welcome Home | First mortgage for first-time buyers, below-market rate | — |
| Open Door | First mortgage for first-time and repeat buyers | — |
| First State | 0% second mortgage of 3% of the first mortgage | Welcome Home, Open Door |
| Keys4You | 0% second mortgage of 4% | Welcome Home, Open Door |
| Take5 | 0% second mortgage of 5% | Welcome Home only |
| Diamond in the Rough | 0% second of 5% for homes needing minor repairs (FHA 203(k) limited) | Welcome Home only |

The seconds have no monthly payment; you repay them when you sell, refinance or transfer the home, or stop living in it. In New Castle County, Welcome Home is limited to household incomes of $122,700 for one or two people (Open Door: $147,240), and to prices of $659,385; Kent and Sussex limits are lower, and targeted areas allow more. The median Delaware home is below the New Castle price limit.

> **Worked example: DSHA second mortgage on the median home**
>
> FHA first mortgage: $358,594. First State would add $10,758, Keys4You $14,344 and Take5 $17,930. A first-time buyer needs about $23,225 for the FHA down payment, low-end closing costs and their share of the state transfer tax — Take5 alone would cover about 77% of it.

Compare Delaware’s options with federal ones in the [first-time buyer programs guide](https://mail.mortgage-math-us.com/first-time-buyers/programs/).

## Frequently asked questions

### How much is the transfer tax in Delaware?

The state realty transfer tax is 2.5% of the price where a local transfer tax also applies and 3% where none does, plus any county or town tax. Buyer and seller typically split it. On the median home the state portion at 2.5% is about $9,290.

### Do first-time home buyers pay less transfer tax in Delaware?

Yes. Buyers who have never owned a home get their share of the state tax cut by 0.5% of the price on the first $400,000 of value, worth up to $2,000. It is claimed at closing.

### What is the property tax rate in Delaware?

Census data put Delaware’s effective rate at 0.47% of home value, with a median bill of $1,750 a year — the 8th-lowest rate among the states and DC.

### Does Delaware have down payment assistance?

DSHA offers 0% second mortgages of 3%, 4% or 5% of the first mortgage with its Welcome Home and Open Door loans. They have no monthly payment and are repaid when you sell or refinance.

### What credit score do I need for a DSHA loan?

At least 620. Borrowers with scores of 659 or below must also complete housing counseling.

## Sources

- [Freddie Mac Primary Mortgage Market Survey](https://www.freddiemac.com/pmms) — 30-year fixed rate, national weekly average (Week of Oct 29, 2026)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25077?g=040XX00US10) — Median value of owner-occupied homes (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B19013?g=040XX00US10) — Median household income (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25103?g=040XX00US10) — Effective property tax rate (median taxes ÷ median home value); Median real estate taxes paid by homeowners (2024 ACS 1-year)
- [Freddie Mac Research](https://www.freddiemac.com/research/insight/homeowners-insurance-costs) — Average homeowners insurance premium per $1,000 of home value (2023 data)
- [Freddie Mac My Home](https://myhome.freddiemac.com/buying/breaking-down-pmi) — Typical PMI cost, low end; Typical PMI cost, high end (Oct 28, 2026)
- [Delaware Division of Revenue: First-Time Home Buyer Tax Credit](https://revenue.delaware.gov/first-time-home-buyer-tax-credit/) — Delaware first-time buyer cut in the buyer’s share of the state realty transfer tax (share of the price); Delaware first-time buyer transfer tax reduction, capped at; Delaware state realty transfer tax where no local transfer tax applies (Oct 29, 2026)
- [CFPB](https://www.consumerfinance.gov/owning-a-home/prepare/figure-out-how-much-you-want-to-spend/) — Minimum FHA down payment; Typical closing costs, low end (share of purchase price); Typical closing costs, high end (share of purchase price) (Oct 28, 2026)
- [Delaware State Housing Authority: Homeownership Loans](https://www.destatehousing.com/homeownership-loans/) — DSHA First State 0% second mortgage (share of the first mortgage); DSHA Keys4You 0% second mortgage (share of the first mortgage); DSHA Take5 0% second mortgage (share of the first mortgage) (Sep 23, 2026)
- [Freddie Mac My Home](https://myhome.freddiemac.com/blog/homebuying/how-much-can-you-afford) — Freddie Mac guidance: housing costs below this share of gross income (Jan 22, 2026)
- [42 U.S.C. 12704(14)](https://www.law.cornell.edu/uscode/text/42/12704) — First-time homebuyer: has not owned a home in the past (HUD/HOME statute) (Oct 28, 2026)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25103?g=010XX00US) — Effective property tax rate (median taxes ÷ median home value) (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25003?g=040XX00US10) — Share of occupied homes lived in by their owners (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25003?g=010XX00US) — Share of occupied homes lived in by their owners (2024 ACS 1-year)
- [Delaware Division of Revenue: First-time home buyer tax credit](https://revenue.delaware.gov/first-time-home-buyer-tax-credit/)
- [Delaware State Housing Authority: Homeownership loans](https://www.destatehousing.com/homeownership-loans/)

_General information, not financial advice._