Wilmington Police kicked in the family's front door and searched their home on Willow Grove Mill Drive.
Officers were looking for a man in connection with a homicide investigation, but the man hasn't lived there in four years.
The new owners say they had nothing to do with the investigation and had no idea what was happening.
"Fifteen police officers came through my front door, broke the glass, busted through the door, woke my wife up out of bed and my daughter," the homeowner told Action News.
"My daughter and I both sat up because there SWAT guy holding a weapon saying, 'Get up, get your kid, get downstairs right now!'" said his wife.
Wilmington Police say they realized the mistake and the chief apologized to the homeowners.
The City of Wilmington has agreed to pay for repair to the home.
Police say the person they were looking for was arrested later Thursday in Smyrna.