Save Up to $2,000 a Year with the Delaware First-Time Homebuyer Tax Credit

What if you could lower your federal tax bill every single year just by buying your first home in Delaware? Through the Delaware First-Time Homebuyer Tax Credit (also known as a Mortgage Credit Certificate or MCC), you can do exactly that.

At Bond Street Mortgage, we highly recommend this program because it provides a dollar-for-dollar reduction in your federal income tax liability, freeing up more of your income to cover your monthly mortgage payment.

How the Delaware Tax Credit Works

When you secure this tax credit, you are allowed to claim 35% of the annual mortgage interest you pay as a direct federal tax credit, up to a maximum of $2,000 every year.

For example, if you pay $6,000 in mortgage interest during your first year, 35% of that equals $2,100; you would be capped at the $2,000 maximum credit limit, wiping out $2,000 of your tax liability. You can even adjust your W-4 withholdings with your employer so you bring home more cash in your monthly paycheck.

Who Qualifies?

Generally, you must be a first-time homebuyer—meaning you have not owned a primary residence in the past three years. However, this rule is waived if you buy in a designated Targeted Area or if you are a Qualified Veteran. You must also fall within the program's household income limits and the home's purchase price limits.

An experienced mortgage advisor can help you confirm whether your income, purchase price, and property location meet the current program guidelines.