The Sussex County homebuyer grant is a flat $20,000 forgivable loan — and it covers closing and settlement costs only, not your down payment. Zero cash back at closing. That trips up most buyers, who picture $20,000 landing in their bank account. It doesn’t work that way. But paired with a Delaware State Housing Authority (DSHA) down payment program, a qualified buyer can still close on a $325,000 home with almost nothing out of pocket. Here’s exactly how.
The one-line version: The grant kills your closing costs. A DSHA program like Keys4You kills your down payment. Neither alone gets you to zero — stacked, they can.
What the Sussex County $20,000 Grant Actually Pays For
The program is the Sussex County Housing Trust Fund (SCHTF) Homebuyer Assistance grant. It is a $20,000 forgivable second loan that gets wiped out over time if you stay in the home, but every dollar is earmarked for closing costs, prepaids, and settlement fees. It is not a down payment program.
That means it covers things like:
- Lender origination and underwriting fees
- Title insurance and settlement/closing fees
- Prepaid property taxes and homeowner’s insurance escrow
- Transfer tax (Delaware splits this between buyer and seller)
- Recording fees and appraisal costs
What it will not do is reduce the down payment your loan requires, and it never comes back to you as cash. If your closing costs total $14,000, the leftover grant money doesn’t get handed over — it simply isn’t drawn. See the county’s own Housing Trust Fund Homebuyers page for current program terms.
⚠️ This is the single biggest misconception about the grant — and it’s why buyers who plan around it alone end up stuck at the closing table.
Who Qualifies: Income, Assets, and the Rule Nobody Mentions
This is not a first-time-buyer-only program — a quiet advantage over many state grants. But three limits decide whether you’re in:
1. Income cap — 120% of Sussex County AMI. For a family of four, that’s roughly $77,400 at the 2026 limits. The property must also be in Sussex County and be your primary residence.
2. The $15,000 liquid asset ceiling. This is the deal-killer most buyers never see coming. After closing, you generally can’t hold more than $15,000 in liquid assets (checking, savings, non-retirement accounts). Save aggressively and you can actually be over-qualified and knocked out. Retirement accounts are typically excluded, but confirm with the county.
3. All adult household income counts. The county counts the income of every adult earner in the household, not just the people on the mortgage. A working spouse not on the loan, or an adult child’s income, can push you over the cap. Don’t assume only applicants count.
Income limits by household size (illustrative, 120% AMI)
Checked: July 2026. Figures approximate HUD/Sussex County AMI; confirm exact limits on the county’s program page before applying.
How to Apply: 9 Steps from Pre-Approval to Closing
📅 Round 5 of the SCHTF homebuyer program goes live July 1, 2026. It runs first-come, first-served, and the pool can run dry mid-year once applications outpace funding. Timing is part of the strategy.
Check your income and assets first. Run your household income against the 120% AMI cap and confirm you’ll be under the $15,000 post-closing liquid asset limit.
Get pre-approved with a participating lender for an FHA, USDA, or conventional loan.
Complete HUD-approved homebuyer counseling. Most down payment assistance in Delaware requires a certificate. Find a free agency through the HUD counselor finder.
Choose a Sussex County primary-residence property within program price limits.
Apply for the SCHTF grant through the county as soon as Round 5 opens — early July beats September.
Apply for your DSHA stacking program (Keys4You, below) through the same lender.
Go under contract and open escrow.
Clear underwriting and the grant’s eligibility review — income and asset verification happens here.
Close — the grant funds your settlement costs directly; your DSHA loan covers the down payment gap.
Worked Example: Buying a $325,000 Home With $0 Out of Pocket
Here’s the math that makes the stack work. This is an illustration — your numbers will differ — but it shows the mechanism.
Checked: July 2026, using FHA 3.5% minimum down and a 4% Keys4You second. Actual fees, rates, and program caps vary by lender and application.
The SCHTF grant kills the closing-cost bill, and Keys4You kills the down payment. Neither one alone gets you to zero — stacked, they can.
Any Keys4You amount beyond the required down payment can often apply to remaining closing costs as well.
Delaware DPA Programs You Can Stack With This Grant
Sussex County’s grant is strongest when paired with a DSHA down payment assistance (DPA) product. Here’s how the main Delaware options compare.
Checked: July 2026, from DSHA and Sussex County program pages. Program availability and terms change — verify current offerings before you apply. See the DSHA homeownership programs page for live details.
✅ The practical stack for most buyers: SCHTF (closing costs) + Keys4You (down payment). Not every program combines — your lender confirms which second loans the county grant allows. Always layer DPA through a single participating lender so the pieces get approved together.
What Happens If You Sell Before Forgiveness Ends
This is the gap almost every write-up skips. The grant is a forgivable loan, which means a lien sits on your home until it’s forgiven. That forgiveness is tied to staying in the home as your primary residence for a set period.
Sell, cash-out refinance, or move out before the period ends, and you typically trigger recapture — you repay all or a prorated portion of the $20,000. Many forgivable programs reduce the balance each year (say, 20% forgiven per year over five years), but Sussex County sets its own schedule, so confirm the exact term and proration in your closing documents.
Two things to protect yourself:
- Read the lien terms before closing. Know the forgiveness clock and whether it’s prorated or all-or-nothing.
- Don’t plan a short-term flip around this money. The grant assumes you’re staying. Treat an early sale as a repayment event, not a windfall.
FAQ
Can I use the Sussex County grant for my down payment?
No. The $20,000 covers closing and settlement costs only. Use a DSHA program like Keys4You for the down payment.
Does my spouse’s income count if they’re not on the loan?
Yes. All adult household income is counted toward the 120% AMI cap, even for earners not on the mortgage.
Is the $20,000 really forgivable?
Yes, if you stay in the home as your primary residence for the full forgiveness period. Sell or move out early and you repay all or a prorated share.
Can I apply if I’ve owned a home before?
Generally yes — it is not restricted to first-time buyers, as long as you meet the income, asset, and primary-residence rules.
How fast do the funds run out?
Round 5 opens July 1, 2026, first-come, first-served. Funding can dry up mid-year, so apply early in July rather than waiting.
What’s the asset limit that disqualifies people?
You generally can’t hold more than ~$15,000 in liquid assets after closing. Heavy savers can be over-qualified and knocked out.
The takeaway: the grant won’t fund your down payment — but stacked with Keys4You, a qualifying Sussex County buyer can close on a home with close to $0 out of pocket. Check your income and assets, then apply the moment Round 5 opens.