Delaware Mortgage Relief Program: Status and Available Aid for Homeowners

For Delaware homeowners facing financial hardship, the Delaware Mortgage Relief Program has been a critical topic. If you are seeking assistance, it is vital to have the most current information. The primary mortgage relief program created in response to the pandemic is now fully subscribed and no longer accepting new applications for mortgage assistance.

This does not mean that help is unavailable. The Delaware State Housing Authority (DSHA) and its partners continue to offer programs to help homeowners prevent foreclosure, manage payments, and address home repairs . Dealing with mortgage difficulties is stressful, but there is a path forward. This information will guide you through the active resources that can provide stability.

The Original Delaware Mortgage Relief Program (DE-MRP)

To understand the current landscape of housing aid, it is helpful to know the history of the Delaware Mortgage Relief Program (DE-MRP), also known as the Delaware Homeowner Assistance Fund (DEHAF) . This was a temporary emergency measure, not a permanent state initiative.

Federal Funding and Purpose

The program was funded by the federal Homeowner Assistance Fund (HAF), established under the American Rescue Plan Act of 2021. Its mission was to support homeowners who experienced financial hardship due to the COVID-19 pandemic after January 21, 2020.

Types of Assistance Offered

The program provided comprehensive support for housing stability:

• Mortgage Assistance: It offered a one-time payment of up to $50,000 per household for delinquent mortgage payments or to help with a loan modification.
• Displacement Prevention: Funds could also cover other critical housing expenses to prevent foreclosure, such as delinquent property taxes, past-due utility bills, and homeowner's association fees.
• Critical Home Repair Grants: A separate grant of up to $20,000 was available for homeowners needing to address critical health and safety repairs.

Program Closure

As a temporary federal program, the DE-MRP operated until its funds were exhausted. The DSHA has announced that the funding has been fully used, and the program is now closed to new mortgage assistance applications . This marks a return to a more traditional system where homeowners must seek specific programs for different needs.

Immediate Steps for Homeowners in Financial Distress

If you are struggling with your mortgage, taking prompt action is the most important factor in achieving a positive outcome. The path forward can be simplified into two critical first steps.

Step 1: Contact a HUD-Approved Housing Counselor

Your first call should be to a U.S. Department of Housing and Urban Development (HUD)-approved housing counseling agency. These nonprofit organizations provide expert, confidential guidance at no cost . A certified housing counselor is your professional advocate.

A housing counselor will:

• Review your financial situation.
• Explain all available options in simple terms.
• Communicate with your mortgage servicer on your behalf.
• Help you complete applications for assistance programs.

Engaging a counselor early significantly increases your chances of avoiding foreclosure. Below is a directory of HUD-approved agencies serving Delaware.

Step 2: Communicate with Your Mortgage Servicer

You should also proactively contact your mortgage servicer—the company you send payments to. It is best to contact them before you miss a payment, but it is never too late to start a conversation.

When you speak with your servicer, you will discuss "loss mitigation" options. A housing counselor can be invaluable in these negotiations. Key options include:

• Forbearance: Temporarily pause or make smaller payments for a limited time. The skipped payments must be repaid later.
• Repayment Plan: Catch up on missed payments by adding a portion of the past-due amount to your regular monthly payments.
• Loan Modification: A permanent change to your loan terms, such as the interest rate or term length, to lower your monthly payment.

Active Foreclosure Prevention Programs in Delaware

While the broad DE-MRP grant program has ended, Delaware maintains a strong legal framework and targeted programs to help homeowners avoid foreclosure.

Delaware's Foreclosure Mediation Program

For homeowners who have received a foreclosure notice, the state's most powerful tool is the Delaware Automatic Residential Mortgage Foreclosure Mediation Program . This mandatory program from the Attorney General's Office gives you a voice in the process.

• Eligibility: You are eligible for this free program if the property is a one-to-four-unit home that is your primary residence.
• Process: The program provides a face-to-face meeting with your lender and a neutral mediator to work toward an agreement to avoid a foreclosure sale.
• Outcomes: Mediation can result in a loan modification to stay in your home or a short sale to exit without the severe credit damage of foreclosure.

For more information, contact the Attorney General's hotline at (800) 220-5424.

Other Assistance Initiatives

Several other resources exist to provide targeted relief:

• Wilmington Senior Tax Assistance Program: This program offers a grant of up to $3,000 to homeowners in Wilmington aged 62 or older who face foreclosure due to delinquent property taxes or utility bills.
• Attorney General's Mortgage Fraud Task Force: This task force connects homeowners with certified housing counselors and takes action against foreclosure rescue scams.
• Federally-Backed Loan Options: If your mortgage is backed by Fannie Mae or Freddie Mac, you may have access to specific relief options. A housing counselor can help you explore these avenues.

Home Repair Assistance Programs in Delaware

Financial difficulty with a mortgage often goes hand-in-hand with the inability to afford necessary home repairs. While the DEHAF home repair grant is no longer available, Delaware offers a variety of other programs.

Statewide Emergency Repair Program (SERP)

This is the primary statewide program for low- to moderate-income homeowners facing an emergency that threatens their health or safety . The program is funded by DSHA and administered by the Milford Housing Development Corporation (MHDC).

• Eligibility: You must own and live in your home for at least one year and have a household income at or below 80% of the Area Median Income.
• Covered Repairs: SERP focuses on immediate needs like non-working heating systems, hazardous electrical problems, major leaks, and critical accessibility modifications.
• How to Apply: Contact MHDC at (302) 491-4010 or toll-free at (844) 413-0038 to begin the pre-qualification process.

County and Municipal Programs

Several local governments offer their own repair programs.

• New Castle County: Offers several programs for residents outside Wilmington and Newark, including an Emergency Home Repair Loan, a Senior Repair Program, and an Architectural Accessibility Program.
• City of Wilmington: Periodically runs a Homeowner Repair Lottery for senior residents, providing grants of up to $10,000 for a single critical repair.
• City of Newark: Provides a 0% interest, deferred-payment Home Improvement Loan Program for low-income homeowners to address issues with major systems and accessibility . A separate Senior Home Repair Program is also available.

Federal and Alternative Options

• USDA Section 504 Home Repair Program: This federal program assists very-low-income homeowners in eligible rural areas. It offers loans up to $40,000 and grants up to $10,000 for homeowners 62 or older.
• FHA 203(k) Rehabilitation Loans: This is a mortgage that bundles the cost of repairs and renovations into the total loan amount, useful for buying a home that needs work or for financing major upgrades.
• DNREC Weatherization Assistance Program: This free statewide program improves energy efficiency to lower utility bills for low-income households. It can address issues with insulation, air sealing, and heating and cooling systems.

 Frequently Asked Questions