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2022 Wisconsin First-Time Homebuyer Programs

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Wisconsin offers several state, county and local programs to help first-time homebuyers get assistance to purchase a home. Requirements on these programs include minimum occupancy periods and payback conditions in the event the home is sold or refinanced before a specified time, but these provisions needn’t interfere with turning the dream of homeownership into a reality. Here’s what you need to know if you’re thinking of buying a home in Wisconsin.

Wisconsin statewide and local first-time homebuyer programs

The Wisconsin Housing and Economic Development Authority (WHEDA) offers several loans and down payment assistance programs to help first-time homebuyers purchase a home. Several Wisconsin counties and cities also offer their own first-time homebuyer programs, some of which can be combined with WHEDA programs to maximize assistance.

Program nameAssistance amountAssistance typeWhere it’s available
WHEDA Advantage Conventional Can finance up to $647,20030-year fixed mortgageStatewide
WHEDA Advantage FHACan finance up to $448,500 depending on home’s location (1 unit)30-year fixed mortgageStatewide
WHEDA Easy Close DPAMinimum of $1,000 up to 6% of the purchase price if combined with WHEDA FHA or conventional first mortgage loan10-year fixed rate second mortgage with monthly payments and same interest rate as first mortgageStatewide
WHEDA Capital Access DPAMinimum of $3,050 up to maximum of whichever is greater, $3,050 or 3% of the purchase price, if combined with a WHEDA conventional loan, or 3.5% if combined with a WHEDA FHA loan30-year fixed rate mortgage with no monthly payments; could be 0% interest rate, but actual APR may varyStatewide
NeighborWorks Loan Fund (NLF)Maximum of $7,0000% interest rate, deferred payment loanBrown County

What to know about different types of down payment assistance

First-time homebuyer programs offer assistance using a number of financial tools, including loans, forgivable loans and grants. The type of down payment assistance varies based on the specific program.

  • Loans: Loans may include low or no interest rates and require repayment over time or at the time the home is sold or refinanced. The loan may be set up as a second mortgage on the home.
  • Forgivable loans: These loans work similar to regular loans, but instead of requiring repayment, they may be forgiven after a specific period of time, like when the home is sold or refinanced. As with regular loans, they may be set up as a second mortgage on the home.
  • Grants: For the most part, grants can be considered free money because they don’t have to be repaid, and there is no lien filed against the home for the grant amount. Grants do include specific requirements that must be followed in order to avoid repaying the money, such as staying in the home for a specific period of time.

How Wisconsin first-time homebuyer programs work

There are several steps to applying and qualifying for a first-time homebuyer program in Wisconsin. Not all first-time homebuyer programs work exactly the same, but several of these steps will apply to most of the programs available in Wisconsin. For a specific program, talk with your lender to get more information.

1. Know your credit score. It’s common for first-time homebuyer programs to require a minimum credit score as part of the qualifying process.
2. Know your household compliance income. Qualifying income looks at the income of the borrowers who will be listed on the loan. Household compliance income, though, looks at the income of everyone who will live in the home, even if they are not listed on the loan. For instance, if your household includes you, a partner or spouse, an adult child who works, a child who receives child support and a grandparent who receives a pension, the household compliance income would include the total amount of income for each person.
3. Complete a homebuyer education program. Some programs require first-time homebuyers to complete a program that covers the basics of how to buy a home, the various types of financing options and how to be a responsible homeowner.
4. Know all repayment requirements and/or penalties. It’s important to beware of any requirements that could result in repaying any assistance you receive before it’s due or instead of no repayment at all. For instance, some programs may require you to repay down payment assistance if you sell the home before the loan term expires or refinance for another mortgage.

Wisconsin first-time homebuyer program requirements

A review of the following requirements, including minimum credit score and DTI ratio maximum, can give you an idea if you will qualify for a first-time homebuyer program before you take the time to complete the steps above.

Program name Credit score minimumDTI ratio maximumMaximum income limitHow long you have to live in home
WHEDA Advantage Conventional 620Determined by Lender Automated Underwriting System$92,345 to $141,615, depending on location and household sizeLoan term
WHEDA Advantage FHA64045%$92,345 to $141,615, depending on location and household sizeLoan term
WHEDA Easy Close DPA620/640, depending on loan typeNot specifiedDetermined by the WHEDA first mortgage programNot specified
WHEDA Capital Access DPA620/640, depending on loan typeNot specifiedCapital Access income and purchase price limits will typically be used for both the WHEDA first mortgage program and the Capital Access DPANot specified
NeighborWorks Loan Fund (NLF)Not specifiedNot specified120% AMI or less according to household size; 115% AMI if FHA-insured mortgageTerm of loan; payment due when home is sold or no longer owner occupied, or mortgage is refinanced

THINGS YOU SHOULD KNOW

Some first-time homebuyer programs in Wisconsin base income requirements on the area median income limits using the home’s location. Therefore, you should familiarize yourself with the current Wisconsin income limits to make sure you are eligible for the program. You can find current Wisconsin income limits on the HUD website by inputting your state and county information.

National first-time homebuyer programs

In addition to the first-time homebuyer programs available in Wisconsin, there are loan options available at the federal level that could help you buy your first home. Also known as national first-time homebuyer programs, these loan programs could provide another way for you to qualify for a home loan. In fact, many are not limited to first-time homebuyers.

Conventional loans. Unlike government-backed mortgage loans, conventional loans usually have higher loan limits, which could provide more cash for the home you want. On the flip side, though, qualifying for a conventional loan may be harder because it could have more stringent requirements. When shopping for a conventional loan, two of the most popular options are Freddie Mac Home Possible® and Fannie Mae HomeReady®.

FHA loans. A government-backed loan by the Federal Housing Administration (FHA), FHA loans feature such benefits as lower credit score and down payment requirements. However, FHA loans typically have lower loan limits, so you may not qualify for the amount you need to buy the house you want. Also, FHA loans require you to pay a mortgage insurance premium to pay off the loan if you cannot fulfill your obligation.

VA loans. Active and former members of the military can apply for a loan backed by the U.S. Department of Veterans Affairs (VA) without having to make a down payment or pay a mortgage insurance premium. With a VA loan, you also won’t pay a lot for closing costs since lenders are prohibited from charging more than 1% in closing costs.

USDA loans. For homebuyers shopping for a house in designed rural areas, the U.S. Department of Agriculture (USDA) offers loans to low-to-moderate income borrowers. The benefits of a USDA loan include no down payment, low interest rates and loan terms for as much as 38 years.

FAQs about Wisconsin’s first-time homebuyer programs

Who qualifies as a first-time homebuyer in Wisconsin?

First-time homebuyers are defined as borrowers who have owned a primary residence during the last three years, per the FHA. If you owned a home with a former spouse while you were married, you could still qualify as a first-time homebuyer. It’s important to discuss how a lender defines a first-time homebuyer to make sure you qualify.

Can I qualify for down payment assistance in Wisconsin?

As long as you meet the requirements outlined by the down payment assistance program, yes, you could qualify for down payment assistance in Wisconsin.

How much of a down payment do I need to buy a house in Wisconsin?

Down payment requirements depend on the mortgage loan you receive. A conventional loan may require a down payment of 3%, while FHA loans typically require a down payment of 3.5%. If applying for a VA or USDA loan, you may not need a down payment at all.

Home price trends in Wisconsin’s major areas

Wisconsin home prices went up last year, in part due to the low housing inventory available. For example, in Brown County (Green Bay), per second quarter 2021 data, home prices increased 9.6% to $221,011, which resulted in an increase in mortgage payments of $51 per month to $831, per the National Association of Realtors. Other areas of the state saw similar increases, including Door County (Sturgeon Bay), where home prices went up 9% year-over-year to $239,806, which increased mortgage payments by $50 per month, to $910.

 

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