Delaware Housing Development Fund (HDF)

How It Works

The Housing Development Fund (HDF) is Delaware’s main pot of state money for affordable housing. State law sets it up as a revolving fund: the General Assembly appropriates money into it, the Delaware State Housing Authority (DSHA) lends it out, and loan repayments and interest go back into the fund to finance the next round of projects. On September 30, 2026, DSHA announced a new public name, “Housing Delaware.” Legally, it is still DSHA.

The statute lets the fund make grants as well as loans, but it may not give away so much that it stops working as a revolving fund. In practice, most HDF money is lent. DSHA’s fiscal 2025 financial report describes short- and long-term loans for predevelopment costs, construction, and permanent financing, made to both nonprofit and for-profit developers. It says a small portion is granted to nonprofit groups when repayment is not feasible.

HDF loans usually act as gap financing, filling the space between what a project costs and what its rents can repay. That is why the HDF is so often paired with other sources:

• With tax credits. DSHA’s 2025–2026 Qualified Allocation Plan governs HDF money awarded together with the Low-Income Housing Tax Credit, as well as federal HOME and National Housing Trust Fund dollars.
• For special populations. Under DSHA’s most recently posted guidelines (2020), a set-aside of up to $1.5 million (subject to availability) has offered loans of up to $60,000 per unit to nonprofits building shelters, supportive housing, re-entry housing, and recovery housing. As of October 2026, DSHA lists this set-aside as not accepting applications.
• For home repair. The HDF pays for a Statewide Emergency Repair Program for low-income homeowners. DSHA’s posted funding notice lists $1.5 million, awarded competitively to nonprofits or local governments that run the repairs, with up to $500,000 per county.
• For low-interest rental loans. A law approved on September 3, 2025, created the Affordable Rental Housing Program as a revolving fund inside the HDF. The statute authorizes long-term loans with interest subsidized down to a 1% payment rate. Tenants in the financed housing pay the lesser of a budget-based “basic rent” or 30% of adjusted income. DSHA must adopt policies and procedures to carry it out.

Who It Serves

The HDF supports housing for low- and moderate-income Delawareans. According to DSHA’s fiscal 2025 financial report, developers must commit to rent a set share of units to low- and moderate-income households for 20 years or the loan term, whichever is longer. The same report says the fund is used for homeownership assistance only on a limited basis. Individual programs set their own limits. The special-populations guidelines, for example, require at least 75% of units at or below 60% of area median income, with no unit above 80%.

The law also says HDF spending should be balanced between rental assistance and ownership, reflect who needs housing, and be spread across the state according to local need.

How to Access It

Developers and nonprofits apply to DSHA. Rental developers seeking tax credits request HDF money through the annual tax credit round. Other HDF money is released through program-specific funding notices. When an application comes in, and again when an award is made, the law requires DSHA to notify the state legislators and the local chief executive for the project’s area. The Council on Housing, an 11-member body appointed by the Governor, reviews and recommends HDF allocations.

Renters looking for housing apply to individual HDF-financed properties. The Delaware housing guide covers how to find them.

History

DSHA’s fiscal 2025 financial report dates the HDF to 1968, the year the General Assembly created DSHA. In 1987 the state transferred administration of the fund to DSHA. The report says that since 1968 the HDF has invested more than $500 million and assisted more than 45,000 families. In fiscal 2025 (the year ended June 30, 2025), it invested $16.2 million, which DSHA says leveraged $52.4 million in other public and private investment.

Limitations

• Appropriation-dependent. New money depends on what the General Assembly appropriates each year, so the amount available changes from year to year.
• Mostly loans. Because most awards must be repaid, projects need enough rental income to cover the debt. The special-populations guidelines, for example, require a minimum debt service coverage ratio of 1.15.
• Limited reach above 80% of AMI. The special-populations guidelines cap incomes at 80% of AMI, and HDF loans paired with tax credits follow LIHTC income limits. The Affordable Rental Housing Program statute reaches only slightly higher, defining moderate income as no more than $5,500 above 80% of AMI. In 2024 Delaware created a separate Delaware Workforce Housing Program for households up to 100% of AMI.