A Delaware DSCR loan is business-purpose financing on a 1-4 family rental, secured by a mortgage and foreclosed through Superior Court by a writ of scire facias and sheriff's sale under 10 Del. C. 5061.
Delaware's realty transfer tax on the deed can reach 4% with the full local tax, split between buyer and seller, but it stays off the mortgage itself. Foreclosure runs through Superior Court, and the deposit cap depends on the lease term.
If a Delaware beach rental is a condo, see how lenders review condo projects and rental rules.
Does Delaware's realty transfer tax apply to a mortgage?
No. Delaware's realty transfer tax applies to documents conveying real estate, and 30 Del. C. 5401(1)(c) excludes any mortgage from that definition.
| Document | Delaware rule |
|---|---|
| Deed transferring the property | State realty transfer tax of 3%, or 2.5% where the full 1.5% local tax applies (30 Del. C. 5402) |
| Mortgage securing the loan | Excluded from the tax (30 Del. C. 5401(1)(c)) |
Exception: Local transfer taxes on the deed vary by county and municipality. Get the full figure from the title company.
According to 30 Del. C. Chapter 54, Subchapter I, Delaware Code, as of October 2026.
How are rental property loans foreclosed in Delaware?
Delaware mortgages are foreclosed by suing out a writ of scire facias in the Superior Court of the county where the property sits, followed by judgment and a sheriff's sale, under 10 Del. C. 5061 and the sections that follow; the subchapter sets out no power-of-sale procedure.
- 10 Del. C. 5061 provides for the writ of scire facias after a default under the mortgage.
- Later sections in the subchapter cover judgment and sale of the mortgaged premises by writ of levari facias.
Exception: Court timing varies by county and case. A Delaware attorney can speak to a specific property.
According to 10 Del. C. Chapter 49, Subchapter XI, Delaware Code, as of October 2026.
Does Delaware limit prepayment penalties on rental property loans?
5 Del. C. 2234(e) bars a licensed lender from imposing a prepayment charge on a loan to an individual borrower, except that a residential mortgage loan may carry the penalty set in its agreement; it applies only to Licensed Lenders licensees and individual borrowers.
- If the lender is not a Licensed Lenders licensee, or the borrower is an LLC, then 2234(e) does not appear to reach the loan.
- If the loan is a residential mortgage loan, then the contracted prepayment penalty may be charged.
Exception: Ask the lender whether it holds a Delaware Licensed Lenders license and get the prepayment schedule in writing.
According to 5 Del. C. 2234, Delaware Code, as of October 2026.
What Delaware landlord rules affect a rental property's numbers?
Delaware caps a security deposit at one month's rent where the rental agreement is for one year or more, under 25 Del. C. 5514(a)(2); the cap does not apply to furnished units.
- The one-month cap was set out in 2013 session law Chapter 57 (House Bill 92).
- Fixed-term leases shorter than one year fall outside the (a)(2) cap; a separate one-month cap in (a)(3) reaches month-to-month tenancies once they have lasted a year.
Exception: The deposit return deadline was not confirmed from an official source here. Read 25 Del. C. 5514 before withholding any amount.
According to Session Law Chapter 57, 147th General Assembly (HB 92), Delaware General Assembly, as read October 2026.
Have a rental in Delaware to finance?
Ten fields tell a financing professional enough to shop your deal. Nothing is due upfront, and the form is an inquiry, not an application.
Start your inquiryAbout DSCR Commercial Loan
DSCR Commercial Loan is an advertising publisher and referral service for business-purpose DSCR financing on one- to four-family rentals, not a mortgage broker or lender. With your consent, we refer your inquiry to one independent financing professional. Financing options, eligibility and terms are determined solely by that professional and the final lender.
Disclaimer
This page is general education about business-purpose real estate financing and state law as published by official sources on the date shown. It is not legal, tax or lending advice, not an offer to lend and not a rate quote. Laws and lender guidelines change; confirm current rules with the lender, the title company and your own attorney or tax adviser.