Wisconsin First-Time Home Buyer Programs of 2021

NerdWallet
By NerdWallet 
Edited by Amanda Derengowski
wisconsin-first-time-home-buyer-programs

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Buying a first home can be intimidating, but the Wisconsin Housing and Economic Development Authority, or WHEDA, offers programs to make it easier for first-time home buyers.

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Qualified veterans and people buying in lower-income federally designated target areas can qualify for WHEDA programs, too.

National first-time home buyer programs

For residents in all 50 states, these national loan programs allow low and sometimes even no down payments.

Conventional mortgage

Best for:

Low down payments, limited mortgage insurance premiums

What you need to know:

A conventional mortgage is a home loan that isn’t guaranteed or insured by the federal government. Conventional mortgages that conform to the requirements set forth by Fannie Mae and Freddie Mac allow down payments as low as 3% for first-time buyers or lower-income home buyers. Unlike FHA loans, conventional loans allow borrowers to eventually cancel their mortgage insurance or avoid mortgage insurance altogether if they put at least 20% down.

VA loans

Best for:

Military, low down payments

What you need to know:

The U.S. Department of Veterans Affairs helps service members, veterans and surviving spouses buy homes. VA loans are especially generous, providing competitive interest rates, often requiring no down payment or mortgage insurance. Although there is no official minimum credit score, most VA-approved lenders require scores of at least 640.

FHA loans

Best for:

Low credit score, low down payments

What you need to know:

This is the go-to program for many first-time home buyers with lower credit scores. The Federal Housing Administration allows down payments as low as 3.5% for those with credit scores of 580 or higher. The FHA will insure loans for borrowers with scores as low as 500 but requires a 10% down payment for a score that low. Mortgage insurance is required for the life of an FHA loan and cannot be canceled.

USDA loans

Best for:

Low down payments, rural

What you need to know:

A USDA home loan is a zero-down-payment mortgage for eligible rural and suburban home buyers. USDA loans are issued by the U.S. Department of Agriculture through the USDA Rural Development Guaranteed Housing Loan Program. There are income limitations, which vary by region. Applicants with credit scores of 640 or higher receive streamlined processing. Those with scores below that must meet more stringent underwriting standards.

WHEDA first-time home buyer programs

Programs offered by WHEDA are available to first-time home buyers and in some cases to repeat buyers. Some programs allow borrowers to accept down payment assistance. There are income and purchase price limits, as well as a limit to how much an applicant can receive in down payment assistance.

WHEDA highlights and eligibility requirements

HIGHLIGHTS

  • 30-year fixed-rate mortgages for first-time home buyers, repeat buyers and veterans.

  • Down payment and closing cost assistance available; income limits apply.

ELIGIBILITY

  • Minimum 620 credit score, in most cases.

  • Home buyer education required for most programs.

WHEDA Advantage Conventional

Best for:

Down payment assistance, closing cost assistance

What you need to know:

This program offers 30-year fixed-rate mortgages, for purchase and refinance, to first-time and repeat buyers. Borrowers must have a credit score of 620 or higher. The program carries limits on household income and loan amounts. Borrowers can buy single-family houses, duplexes, and eligible condominiums and town houses, and manufactured homes. Pre-purchase home buyer education is required if the borrower is a first-time home buyer. Help with down payment and closing costs is available.

WHEDA Advantage FHA

Best for:

Low down payment

What you need to know:

This Federal Housing Administration-insured mortgage lets borrowers buy homes without shelling out any of their own money. The loan requires a minimum 3.5% down payment, but all or some of that can come in the form of gift funds or down payment assistance from WHEDA. Borrowers don't have to be first-time buyers. The program requires a credit score of 640 or higher and completion of a home buyer education course, if the borrower is a first-time buyer. Help with down payment and closing costs is available.

WHEDA Easy Close

Best for:

Down payment assistance, closing cost assistance

What you need to know:

This assistance for down payment and closing costs comes in the form of a 10-year, fixed-rate second mortgage. The interest rate on Easy Close is the same as the rate on the primary mortgage, and the borrower must make monthly payments. The maximum assistance is 6% of the purchase price, whether paired with the WHEDA Advantage Conventional or WHEDA Advantage FHA.

WHEDA Capital Access

Best for:

Down payment assistance, closing cost assistance

What you need to know:

This program offers down payment and closing cost assistance in the form of a 0% interest-rate loan that doesn’t require monthly payments. The maximum amount is 3% of the purchase price when paired with a WHEDA Advantage Conventional loan or 3.5% of the purchase price when paired with a WHEDA Advantage FHA loan. The loan doesn't have to be repaid until the home is sold or the mortgage is refinanced or paid off. There are income and purchase price limits.

WHEDA Advantage Conventional HomeStyle Renovation

Best for:

Down payment assistance, closing cost assistance, renovation assistance

What you need to know:

Eligible borrowers can receive financing to both purchase and renovate a home with this mortgage, an extension of the WHEDA Advantage Conventional program. Financing can be up 100% when combined with WHEDA down payment assistance and may include six months of mortgage payments if the home cannot be occupied during renovation. Eligible renovation work must be completed within six months of mortgage closing.

Your next step

You know the basics of first-time home buyer programs available in Wisconsin. If you want to dig into the specifics, visit the WHEDA website.

WHEDA doesn't approve loan applications or lend money; instead, it relies on a network of participating lenders. If one of the above home buyer programs looks like a good fit or you need help deciding which option is best, reach out directly to a participating lender for more information.

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