A Comprehensive Guide For First-Time Home Buyers In Wisconsin (WI)

Are you a first-time home buyer looking to purchase a house in Wisconsin? Named one of the best places to live in the U.S., the Badger State is also one of the cheapest states to buy a house and an amazing place to start your homeownership journey.

Wisconsin has many assistance programs available to help first-time home buyers afford homeownership. By understanding the requirements of these programs, you’ll have a better idea of which ones you might qualify for.

Eligibility Qualifications For Wisconsin First-Time Home Buyers

There are ample programs and grants designed to assist first-time home buyers. While each has different eligibility criteria, you usually need to be a first-time home buyer to qualify.

The Department of Housing And Urban Development (HUD) provides guidelines to define who qualifies as a first-time home buyer. The guidelines state an individual is a first-time home buyer if:

• They never owned a home.
• They haven’t owned a primary residence in the 3 years leading up to the purchase of the new home.
• Their spouse hasn’t owned a home in the past 3 years, and they’re buying a house together.
• They’re a single parent who only owned a home with a former spouse.
• They’re a displaced homemaker and only owned a home with a spouse.
• They only owned a primary residence that wasn’t permanently affixed to a foundation.
• They only owned a property that wasn’t in compliance with state, local or model building codes, and bringing it into compliance would cost more than constructing a new, permanent structure.

If you meet any of these guidelines, you’re one step closer to qualifying for home buyer assistance. The next step is to research the assistance programs that can turn your homeownership dreams into a reality.

Requirements For Wisconsin First-Time Home Buyer Programs

Take a glance at current homeownership stats and home buyer program requirements in Wisconsin.

First-Time Home Buyer Programs In Wisconsin

The road to homeownership can be challenging and expensive for a first-time home buyer, but there are an array of programs and grants designed to help you fund your home purchase.

Consider checking out these programs to get a mortgage in Wisconsin:

WHEDA Advantage Conventional Loan

One home loan program offered by the Wisconsin Housing And Economic Development Authority (WHEDA) that first-time home buyers can take advantage of is the WHEDA Advantage Conventional Loan program. Borrowers who get a home loan through this program can unlock additional cash savings.

For instance, you won’t pay closing costs or make a down payment unless you’re purchasing a 2- to 4-unit property. Eligible borrowers can also take advantage of WHEDA’s Rehabilitation Mortgage programs, which offer closing credits of up to $500 and up to 100% financing. If a borrower wants to purchase a home in certain rural counties in Wisconsin, they can save big with a reduced interest rate.

• To qualify for the WHEDA Advantage Conventional Loan, potential borrowers must:
• Purchase a home in Wisconsin.
• Live in the home for the life of the loan.
• Have at least a 620 credit score.
• Be under the Total Household Compliance Income limit.
• Complete the prepurchase Home Buyer Education (HBE) program if you’re a first-time home buyer.

WHEDA Advantage FHA Loan

The WHEDA Advantage FHA Loan is a loan backed by the Federal Housing Administration and is a valuable option for low-income first-time home buyers. To qualify, potential borrowers must:

• Purchase a home in Wisconsin.
• Live in the home for the life of the loan.
• Have at least a 640 credit score.
• Be under the Total Household Compliance Income limit.
• Make at least a 3.5% down payment.
• Complete the prepurchase Home Buyer Education (HBE) program if you’re a first-time home buyer.

Unlike the conventional loan option, the WHEDA Advantage FHA Loan includes a 3.5% down payment. However, you may be able to cover the down payment using one of WHEDA’s Down Payment Assistance (DPA) options.

Like the WHEDA Advantage Conventional Loan program, borrowers can participate in both WHEDA Rehabilitation Mortgage programs. To learn more about WHEDA loan options for first-time home buyers in Wisconsin you can check out their website.

WHEDA Advantage Conventional HomeStyle^® Renovation

The WHEDA Advantage Conventional HomeStyle^® Renovation program is one of two WHEDA Rehabilitation Mortgage programs. The program is an extension of the WHEDA Advantage Conventional Loan Program, so it’s only available to eligible WHEDA conventional loan borrowers.

If you’re looking to make some much-needed repairs on your Wisconsin home, this loan option allows you to finance your purchase and your renovation costs with a single mortgage. The loan may also finance 6 months of mortgage payments if you can’t live in the home while it’s being renovated. You can find a complete list of benefits and eligibility requirements on the WHEDA website.

WHEDA Advantage Home Improvement Loan Program (HILP)

The WHEDA Advantage Home Improvement Loan Program (HILP) is another rehabilitation mortgage program. Unlike the WHEDA Advantage Conventional HomeStyle^® Renovation program, which also finances the home purchase, this loan is exclusively designed to help Wisconsin homeowners finance home improvements and repairs – regardless of the original lender. This means you can qualify for this loan even if you originally purchased your home with a Rocket Mortgage loan.

Homeowners can receive up to a $500 closing cost credit, loan amounts between $10,000 – $50,000 and up to 6 months to complete renovations. You can find a complete list of HILP benefits and requirements on the WHEDA website.

USDA Single Family Housing Direct Loan

The USDA Single Family Housing Direct Loan program is a valuable option for low-income buyers who want to purchase a home in rural Wisconsin. Also known as the Section 502 Direct Loan Program, this program helps very low-income families achieve homeownership by providing mortgage payment assistance.

According to the USDA website, to qualify for this loan, borrowers must:

• Be without decent, safe and sanitary housing.
• Be unable to secure a loan from other resources with terms and conditions they can reasonably expect to meet.
• Agree to live in the property as their primary residence.
• Be legally eligible to take out a loan.
• Meet citizenship or eligible noncitizen requirements.
• Not suspended or debarred from federal programs.

Properties financed with a direct loan:

• Can’t have a sale price that exceeds the area loan limit.
• Can’t be used as a source of income.

If you’re interested in learning more about the USDA Single Family Housing Direct Loan, head to their website to look at the complete list of eligibility requirements.

Down Payment Assistance Programs In Wisconsin

First-time home buyers in Wisconsin can also take advantage of down payment assistance programs. Saving up for a down payment, closing costs and other fees is a common challenge many prospective home buyers face, so consider checking out these programs designed to help you save cash:

WHEDA Easy Close DPA

The WHEDA Easy Close Down Payment Assistance (DPA) program finances down payments for WHEDA conventional and FHA loan borrowers. If you have a conventional first mortgage, you may qualify to receive a loan for:

• Down payment
• Closing costs
• Annual or single-paid private mortgage insurance (PMI) premium

If you have an FHA first mortgage, you may qualify to receive a loan for:

• Down payment
• Closing costs
• Upfront mortgage insurance premium (UFMIP)

Easy Close DPA has a 10-year term and the same interest rate as your first mortgage. You can receive up to 6% of the home’s purchase price or appraised value, whichever is less.

WHEDA Capital Access Advantage DPA

Capital Access Advantage is a down payment assistance loan that exclusively helps low-income borrowers with a conventional or FHA first mortgage buy homes in areas with limited affordable housing. This loan offers:

• Minimum loan amount: $3,050
• Conventional loan: Greater of 3% or $3,050
• FHA loan: Greater of 3.5% or $3,050
• Lesser of purchase price or appraised value

Unlike the Easy Close DPA program, this loan has a deferred payment with zero interest (0% APR). You only start making payments on the loan once your first mortgage is paid in full or refinanced, whichever comes first. Because of its limited availability, the loan is offered on a first come, first served basis.

ONE+ By Rocket Mortgage

Most home loans require at least a 3% down payment to secure a mortgage. Depending on the purchase price, the down payment could reach tens of thousands of dollars. In response, some lenders have created programs to help make the dream of homeownership a reality.

ONE+ by Rocket Mortgage allows eligible borrowers to purchase a home for 1% down, and Rocket Mortgage covers the other 2%.¹ If you want to lower your monthly mortgage payment, you can make up to a 3% down payment and still get the 2% grant.

To qualify, borrowers must:

• Make less than 80% of the median income in the area they’re buying in.
• Have a qualifying FICO^® Score of at least 620.
• Purchase a single-unit primary residence.

While ONE+ isn’t exclusive to first-time home buyers in Wisconsin, you can apply as long as you meet the program’s requirements.

Other First-Time Home Buyer Loan Programs In Wisconsin

First-time home buyers can look beyond state housing programs and explore conventional and government-backed mortgages offered nationwide, including:

• Conventional 97 loan: Based on Fannie Mae and Freddie Mac guidelines, lenders finance 97% of the home’s purchase price and allow home buyers with a credit score of at least 620 to put only 3% down on a home. There’s no income limit or upfront mortgage insurance fee, but you’ll pay private mortgage insurance until you reach 20% equity in the home.
• Federal Housing Administration (FHA) loan: The Federal Housing Administration backs FHA loans. FHA loans are popular with first-time home buyers, especially low- to moderate-income buyers because they have more flexible loan requirements, including a 3.5% down payment with a 580 minimum credit score.
• U.S. Department of Agriculture (USDA) loan: Home buyers in rural and remote areas can use a U.S. Department of Agriculture (USDA) loan to buy a home with a low-interest loan and no down payment. Please note that Rocket Mortgage doesn’t offer USDA loans at this time.
• Department of Veterans Affairs (VA) loan: The Department of Veterans Affairs backs VA loans, which offer less stringent loan requirements for qualifying active-duty service members, veterans and surviving spouses. VA loans also don’t require a down payment.
• Good Neighbor Next Door program: This HUD program allows law enforcement officers, teachers (pre-K through 12th grade), firefighters and emergency medical technicians to buy homes in HUD-designated revitalized areas at a 50% discount as long as they agree to live in the house for at least 3 years.

Educational Opportunities For First-Time Home Buyers In Wisconsin

WHEDA requires new borrowers to take first-time home buyer classes, such as:

• Fannie Mae HomeView^®
• HUD housing counseling services
• Framework Homebuyer Education course

Whether you take a course because it’s mandatory or you want to learn more about home buying and homeownership, these classes can help turn you into a better-informed and more confident home buyer.

We know you’re excited to purchase your new midwestern home. But consider the benefits of taking your time and learning as much as you can to confidently navigate the home buying process.

Tips For First-Time Home Buyers In WI

Now that you know what assistance Wisconsin makes available for first-time home buyers, here are some first-time home buyer tips to start your journey on the right foot:

• Research Wisconsin real estate trends. You should become familiar with the real estate trends in an area before purchasing a house. Checking out a housing market trend report will give you an idea of whether you’re getting a fair price.
• Choose the right neighborhood. Crime rates, employment opportunities, school district ratings and access to amenities will likely factor into where you decide to live. You must do your research to help determine whether an area would be a good fit.
• Improve your credit score. If your score needs some work, you can get your credit mortgage-ready by reducing your debt-to-income ratio (DTI). To lower your DTI, you can pay down existing debt, particularly your high-balance accounts, and consolidate debt.
• Shop for a lender. Choosing a lender with the best loan terms and interest rates before applying for a home loan can save you thousands down the line. Take your time, crunch the numbers and choose wisely.
• Get preapproved. It’s important to get preapproved for a mortgage before shopping for houses so you have an idea of how much a lender would be willing to let you borrow. Save yourself any potential hassle down the line and consider initial mortgage approval.

FAQs: First-Time Home Buyer Programs In Wisconsin

To learn more about the assistance you may qualify for, scan through our answers to frequently asked questions about first-time home buyer programs in Wisconsin.

What credit score do I need for first-time home buyer assistance in Wisconsin?

The credit score requirements for first-time home buyer assistance in Wisconsin can vary by program. The credit score requirement for some first-time home buyer programs ranges from 620 – 640. If you can increase your credit score before applying, you may qualify for better mortgage rates and loan terms.

Does Wisconsin have a first-time home buyer tax credit?

Wisconsin offers qualifying first-time home buyers a tax credit through the Mortgage Credit Certificate Program (MCC). Homeowners can claim a portion of their annual mortgage interest paid. It’s typically capped at $2,000.

How much do I have to put down as a first-time buyer in Wisconsin?

Your financial and credit profile, mortgage lender and mortgage loan criteria will determine how much you must put down to buy a home. For example, you likely won’t need any money down with a Department of Veterans Affairs (VA) loan, Native American Direct loan (NADL) or a U.S. Department of Agriculture (USDA) loan. However, you will need a minimum 3% down payment with a conventional loan. Take your time to carefully consider all your options.

The Bottom Line

If you’re a first-time home buyer looking to purchase a house in Wisconsin, there are plenty of programs available to help make your dream a reality. Keep in mind that the home buying journey takes time, patience and commitment. Purchasing a home is a long-term, significant investment. You’ll need time to run the numbers and save cash. Save yourself a lot of trouble upfront by sorting things out before you start making offers on homes.

Not sure what lenders would be willing to offer? Take a moment and start the home loan process with Rocket Mortgage today.

¹Client will be required to pay a 1% down payment, with the ability to pay a maximum of 3%, and Rocket Mortgage will cover an additional 2% of the client’s purchase price as a down payment, or $2,000. Maximum grant amount is $7,000. Offer valid on primary residence, conventional loan products only. Maximum loan amount of $350,000. Cost of mortgage insurance premium passed through to client effective January 2, 2024. Offer valid only for home buyers when qualifying income is less than or equal to 80% area median income based on county where property is located. Not available with any other discounts or promotions and cannot be retroactively applied to previously closed loans or loans that have a locked rate. This is not a commitment to lend. Rocket Mortgage reserves the right to cancel/modify this offer at any time. Additional restrictions/conditions may apply.