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Whether you’re looking for a home in Madison, Milwaukee, Kenosha, Racine, Green Bay or anywhere else in The Badger State, begin with the Wisconsin Housing and Economic Development Authority, which helps residents, including first-time homebuyers, secure affordable housing. Some of the larger municipalities across the state also offer local homebuying assistance.
Wisconsin first-time homebuyer loan programs
WHEDA Advantage Conventional loan
The Wisconsin Housing and Economic Development Authority (WHEDA) offers a 30-year fixed-rate conventional loan, Advantage Conventional, that can be used in tandem with the agency’s down payment assistance programs.
This conventional mortgage has a lower interest rate and reduced mortgage insurance (if your income is below a certain threshold), and is open to first-time homebuyers, although that’s not a requirement. (First-time buyers can get special pricing, however, through this program.)
The agency also offers a conventional HomeStyle Renovation loan for those who want to buy and fix up a home with one mortgage, which includes financing for the purchase price of the home, the renovation and up to six months’ of mortgage payments.
To be eligible, you’ll need:
- A 620 minimum credit score
- A completed homebuyer education course if a first-time homebuyer, or a completed landlord education course if buying a two- to four-unit home
- To meet WHEDA income limits, which depend on household size and county where property is located
- To buy a single-family home, condominium, townhome, manufactured home (double-wide) or two- to four-unit home in Wisconsin
- To buy within WHEDA’s purchase price limits if a first-time homebuyer
- To use the home as your primary residence
WHEDA Advantage FHA loan
WHEDA’s 30-year fixed-rate FHA loan can also be combined with the agency’s down payment assistance programs, and is available to repeat and first-time homebuyers. The eligibility requirements include:
- 3.5 percent down payment (down payment assistance available)
- 640 minimum credit score
- Amount borrowed can’t exceed FHA loan limits, which depend on county and type of property
- Must complete homebuyer education course if a first-time homebuyer; must complete landlord education course if buying a two-unit home
- Must meet WHEDA income limits, which depend on household size and county where property is located
- Must buy a single-family home, HUD-approved condo, townhome, manufactured home (double-wide) or two-unit home in Wisconsin
- Must use the home as a primary residence
Wisconsin down payment assistance
WHEDA Easy Close DPA
In conjunction with its Advantage Conventional and FHA loans, WHEDA offers the Easy Close down payment assistance (DPA) program, which provides a minimum of $1,000 and a maximum of 6 percent of the home’s purchase price in assistance.
This assistance is packaged as a 10-year fixed-rate mortgage with a monthly payment and the same interest rate as the first mortgage. It’s available to both first-time and repeat homebuyers who qualify for a first mortgage, and there is no additional application.
WHEDA Capital Access DPA
WHEDA also offers the Capital Access DPA program for buyers using either of the agency’s first mortgage programs (Advantage Conventional or FHA). The program offers $7,500 in assistance in a 30-year fixed-rate mortgage with no interest and no monthly payments. There are income limits to qualify, but they’re different from the first mortgage requirements and typically lower, according to the agency.
Other Wisconsin homebuyer assistance programs
Home-Buy the American Dream
The City of Madison offers the Home-Buy the American Dream down payment and closing cost assistance program, which provides anywhere from $1,000 to $35,000 in assistance with no interest or monthly payments, repaid by the borrower when the home is sold or the first mortgage is refinanced. When it comes time to repay, the borrower will owe the assistance amount plus a portion of appreciation.
To be eligible, borrowers must be a first-time homebuyer (or haven’t owned a home in the last three years) or a single parent with a dependent minor, and buying a single-family home, condo or one-half of a duplex in Madison. There are additional requirements, as well, including that the borrower:
- Must have a 30-year first mortgage
- Must contribute 1 percent to the purchase
- Must meet income limits, which vary based on household size
- Must not have more than a year’s worth of PITI payments in liquid assets after closing
Milwaukee Home Down Payment Assistance
The City of Milwaukee offers first-time homebuyers forgivable down payment assistance grants of up to $5,000 (or up to $7,000 if purchasing in a specially designated area — check eligibility on the MyMilwaukeeHome website). These funds can be used towards both the down payment and closing costs.
The program’s requirements include:
- Borrower must currently be a resident of Milwaukee
- Borrower must contribute at least $1,000 of their own funds
- Borrower must be buying a primary residence and live there for at least five years
- Borrower must complete homebuyer education
Other first-time homebuyer loan programs
While you’re considering first-time homebuyer programs in Wisconsin, be sure to explore nationally available first-time homebuyer loan programs like:
- FHA loans – If you have a lower credit score or limited savings, consider an FHA loan. These loans are widely available, have a minimum credit score of 580 and require a down payment as little as 3.5 percent.
- VA loans – If you’re a member of the military or veteran, you could qualify for a VA loan, which doesn’t require a down payment.
- USDA loans – USDA loans don’t have a down payment requirement, but are only available to borrowers buying in a USDA-eligible rural area. You typically need a credit score of 640 or higher to qualify.
- Good Neighbor Next Door program – This HUD program has a very low down payment requirement on homes in certain areas, coupled with the ability to save 50 percent on the purchase price.
Now that you know some options available to first-time homebuyers in Wisconsin, you’re ready to get started with your home purchase. Some next steps:
- Do your homework. The Wisconsin Housing and Economic Development Authority (WHEDA) has a network of community-based mortgage lenders and brokers to help you narrow down your choices. The agency also services its mortgages, and employs a team of professional loan advisors who work directly with borrowers.
- Work on your credit score. It’s the most important factor in determining your mortgage rate, so focus on boosting your number.
- Compare lenders. Regardless of which program you choose, it’s important to shop around for mortgage offers. Interest rates are always changing, so if you find a rate that’s especially competitive, be sure to lock it in.