Delaware · State guide
How to buy a house in Delaware
One of the most tax-friendly states to own a home — among the lowest property taxes in the country and no sales tax — but one of the priciest to buy, thanks to a 4% transfer tax. Here is the playbook for buying in Delaware.
Last updated June 2026
Why Delaware is different
Buying a house in Delaware, the short version
The federal process is the same everywhere — read the complete guide to buying a house for the eight universal steps — but Delaware has an unusual cost profile: cheap to own, but expensive to buy.
On the ownership side it’s one of the most tax-friendly states in the country: property taxes are among the lowest in the nation and there’s no state sales tax. The catch comes at closing — Delaware has a 4% real estate transfer tax, one of the highest anywhere, though it’s split 50/50 between buyer and seller and first-time buyers get a break worth up to $2,000.
A few more Delaware specifics: it’s an attorney-closing state (a Delaware attorney must run your settlement), the state housing agency (DSHA) offers below-market loans plus 3–5% down payment help, and two current issues matter — all three counties recently completed their first property reassessments in 40+ years (so check the current tax bill), and the coastal Sussex County beaches carry real flood and sea-level-rise risk. Use the 50-state hub to compare other states.
The market
What homes cost in Delaware
Moderately affordable overall, with a fast-growing center and a coastal beach market that has swung toward buyers.
The statewide median sale price was about $398,585 in April 2026, up roughly 2.6% year over year (Redfin), with around four months of supply — a fairly balanced market. Prices vary widely from the city to the shore:
Median prices by area
Wilmington ~$215,000 (the most affordable major market) · Dover ~$290,000 · Newark ~$440,000 · Middletown ~$440,000+ (one of the fastest-growing) · Lewes ~$580,000–$650,000 · Rehoboth Beach ~$700,000–$800,000+. Coastal Sussex County — the state’s beach and retirement market — has by far the most inventory and has tilted toward a buyer’s market in 2026, which means more room to negotiate.
Down payment & rate help
Delaware (DSHA) homebuyer programs
You don’t apply directly to DSHA — you work through an approved lender. The first mortgage and the down payment help stack together. Minimum 620 credit (counseling is required below 660).
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Welcome Home & Open Door (first mortgage)
DSHA’s 30-year fixed loans (FHA, VA, USDA, or conventional) at below-market rates. Welcome Home is for first-time buyers; Open Door is for any buyer, with higher income limits.
Income and purchase-price limits vary by county (New Castle, Kent, Sussex). This is the base that the assistance builds on.
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Down payment assistance — 3%, 4%, or 5%
Choose your level: First State (3%), Keys4You (4%), or Take5 (5%) of the loan amount toward your down payment and closing costs.
Each is a 0%-interest deferred second mortgage — no monthly payment, repaid only when you sell, refinance, or move out.
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Diamond in the Rough — buy and fix
For fixer-uppers: 5% down payment assistance plus FHA 203(k) renovation financing, so you can roll minor repairs into the loan and fix up the home after closing.
Available with the Welcome Home first mortgage.
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City & county help on top
Local programs add more: Wilmington (forgivable loan up to $15,000), Dover (forgivable up to $20,000), New Castle County (up to $10,000), and the Sussex County Housing Trust Fund.
These can usually be layered on top of DSHA assistance.
A note on what’s changed
Two things many websites still get wrong: Delaware’s Mortgage Credit Certificate (MCC) tax credit ended in August 2025, so don’t count on it. And the older Home Sweet Home and Delaware Diamonds forgivable grants are currently out of funds. The current down payment help is the deferred 3–5% second above. If your credit score is under 660, schedule the required HUD homebuyer counseling early so it doesn’t hold up your closing.
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Property taxes
Among the lowest property taxes in the country
Delaware is genuinely tax-friendly to own a home in: the effective property tax rate is about 0.5% — one of the lowest in the U.S. — the typical bill runs roughly $1,450–$1,700 a year, and there’s no state sales tax at all. Rates vary by county: Sussex is the lowest (~0.31%), Kent is in the middle (~0.46%), and New Castle is the highest (~0.72%, with a typical bill near $2,400). The school district makes up the largest part of the bill. Seniors 65+ can claim a school-property-tax credit worth up to $500.
Important: check the current bill after the reassessment
For decades, Delaware counties taxed homes using ancient values (Sussex’s base year was 1974, New Castle’s 1983, Kent’s 1987). After a court order, all three counties reassessed for the first time in 40+ years — Kent in 2024, New Castle and Sussex in 2025. The changes were meant to be revenue-neutral, but many individual bills shifted sharply (some New Castle bills doubled). Don’t rely on the prior owner’s old tax bill — verify the current assessed value and bill, especially in New Castle County, and check whether an appeal window is open. Counties now reassess every five years.
Closing & costs
Closing on a home in Delaware
Delaware is an attorney state: a licensed Delaware attorney must conduct the closing — ordering the title search, preparing the deed and Closing Disclosure, collecting and disbursing funds, paying the transfer tax, and recording the deed. Budget about $750–$1,250 for the attorney. Total buyer closing costs run on the higher side here (often around 5% of price), mostly because of the transfer tax, and the buyer customarily pays both the owner’s and lender’s title insurance.
That transfer tax is the big one: 4% of the price (2.5% state + 1.5% local), one of the highest in the country — but it’s customarily split 50/50, so each side pays about 2%. First-time buyers get a 0.5% reduction on their share (on the first $400,000), saving up to $2,000. On a $400,000 home, the total tax is $16,000, normally $8,000 each — and a qualifying first-timer pays about $6,000. Watch builder contracts, which sometimes make the buyer pay the full 4%. On financing, the 2026 conforming limit is $832,750 in all three counties, and the FHA limit is higher in New Castle ($630,200) than in Kent and Sussex ($541,287). A purchase usually closes in about 30–45 days.
Sellers must disclose known defects
Delaware requires the seller to give you a completed Seller’s Disclosure of Real Property Condition Report — listing known material defects, plus a separate radon disclosure — before you make an offer. It’s a good-faith disclosure, not a warranty.
Delaware contracts are “as-is” by default, so the inspection is your protection. Always get a professional home inspection — and for rural Kent/Sussex homes on well and septic, add water-quality testing and a septic inspection. The federal lead-paint rule applies to homes built before 1978.
Insurance & risks
Insuring a Delaware home
Standard home insurance in Delaware is relatively cheap — averaging roughly $950–$1,000 a year, well below the national average — partly because coastal home values here are modest compared with the Hamptons or the Jersey Shore. The thing to plan for isn’t the base premium; it’s flood.
The coast: flood and sea-level rise
Delaware is the lowest-lying, flattest state in the country, and sits in a sea-level-rise hotspot — seas along its coast are rising at roughly twice the global average. The Sussex County beaches (Rehoboth, Lewes, Bethany, Fenwick) and low-lying Delaware Bay areas face hurricane, nor’easter, storm-surge, and tidal-flooding risk.
Flood isn’t covered by a standard policy. Lenders require NFIP flood insurance for homes in FEMA flood zones (averaging around $1,500 a year, with a 30-day waiting period), and coastal policies often carry a separate wind/hurricane deductible. If you’re buying near the water, get an elevation certificate and quotes from both NFIP and private insurers during due diligence — and factor sea-level exposure into long-term resale.
Wherever you buy
The steps that work the same in Delaware
Delaware sets the local rules, but these parts of buying are the same everywhere.
Quick answers
Buying a house in Delaware: common questions
How much money do you need to buy a house in Delaware?
With a conventional loan you need 3% down, FHA 3.5%, and VA or USDA can be 0%. On a typical ~$399,000 home that’s roughly $12,000–$14,000 down plus closing costs — and DSHA’s assistance can cover 3–5% of the loan. Just budget for your transfer-tax share too (about 2% of the price, less the first-time discount). See how much you really need →
Does Delaware have down payment assistance?
Yes. DSHA offers below-market first mortgages (Welcome Home or Open Door) plus 3%, 4%, or 5% in deferred, 0%-interest down payment help. Cities like Wilmington and Dover and New Castle County add their own forgivable programs on top. See assistance programs →
Does Delaware have a transfer tax?
Yes — 4% of the price, one of the highest in the country. But it’s customarily split 50/50, so the buyer pays about 2%, and first-time buyers get up to $2,000 off their share. On a $400,000 home that’s roughly $8,000 each (about $6,000 for a qualifying first-timer).
Are property taxes high in Delaware?
No — they’re among the lowest in the U.S. (a typical bill around $1,450–$1,700), and there’s no state sales tax. One caveat: recent county reassessments changed many bills, especially in New Castle County, so check the current tax bill rather than the old one.
What credit score do you need in Delaware?
Around 580 for FHA and 620 for a conventional loan. DSHA’s programs require a minimum 620, and buyers below 660 must complete HUD homebuyer counseling. A higher score mainly earns a lower rate. Check the score by loan type →
Is Delaware an attorney state for closings?
Yes. A licensed Delaware attorney must conduct the closing — handling title, documents, funds, and recording. Budget roughly $750–$1,250, and you can choose your own attorney rather than the agent’s referral.
Do home sellers have to disclose problems in Delaware?
Yes. Sellers must give you a completed Seller’s Disclosure of Real Property Condition Report (plus a radon disclosure) before you make an offer. But Delaware contracts are “as-is” by default, so always get your own inspection. How inspections fit the process →
Do I need flood insurance in Delaware?
Near the coast or bay, very likely. Delaware is the lowest-lying state and a sea-level-rise hotspot, and standard policies don’t cover flood. Lenders require NFIP flood insurance in FEMA flood zones (around $1,500 a year), and coastal policies often carry a wind/hurricane deductible.
What’s the conforming loan limit in Delaware?
$832,750 in all three counties for 2026. FHA limits differ: $630,200 in New Castle County (a higher-cost area) and $541,287 in Kent and Sussex. Loans above the limit are jumbo mortgages.
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