Wisconsin First-Time Home Buyer: 2022 Programs and Grants

What to know about buying a house in Wisconsin

Wisconsin first-time home buyers have a leg up over buyers in some other states. Both home prices and home price inflation are well below national averages.

Of course, saving for your down payment and getting a home loan can still be a challenge. But Wisconsin has loan programs to help.

The Badger State offers special mortgages and education to first-time buyers in Wisconsin. And it has several down payment assistance programs that can help you meet your down payment and closing cost needs.

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Wisconsin home buyer overview

The median home price in Wisconsin was $265,500 in April 2022, according to the Wisconsin Realtors Association. That was up 13% over the past 12 months, which is notably lower than the national average increase of 20.9% over the same period.

Of course, that’s great news if you’re a Wisconsin first-time home buyer. Because lower home price inflation makes it easier to save for a down payment. But some buyers will still come up short on cash. And that’s where Wisconsin’s first-time home buyer programs can help.

Wisconsin home buyer stats

Average Home Sale Price in WI1	$265,500
Minimum Down Payment in WI (3%)	$7,965
20% Down Payment in WI	$53,100
Average Credit Score in WI2	735
Maximum WI Home Buyer Assistance3	A loan of up to 6% of the home’s purchase price

Down payment amounts are based on the state’s most recently available average home sale price. “Minimum” down payment assumes 3% down on a conventional mortgage with a minimum credit score of 620.

If you’re eligible for a VA loan (backed by the Department of Veterans Affairs) or a USDA loan (backed by the US Department of Agriculture), you may not need any down payment at all.

First-time home buyer loans in Wisconsin

If you’re a first-time home buyer in Wisconsin with a 20% down payment, you can get a conventional loan with a low interest rate. And you never have to pay for private mortgage insurance (PMI).

Of course, few first-time buyers have saved enough for 20% down. But the good news is, you don’t need that much. Not by a long shot.

Borrowers can often get into a new home with as little as 3% or even 0% down using one of these low-down-payment mortgage programs:

• Conventional 97: From Freddie Mac or Fannie Mae. 3% down payment and 620 minimum credit score. You can usually stop paying mortgage insurance after a few years
• FHA loan: Backed by the Federal Housing Administration. 3.5% down and a 580 minimum credit score. But you’re on the hook for mortgage insurance premiums (MIP) until you refinance to a different type of mortgage, move, or pay off your loan
• VA loan: Only for veterans, active military members, reservists, and National Guard. Zero down payment is required. Minimum credit score varies by lender but often 620. No ongoing mortgage insurance after closing. These are arguably the best mortgages available, so apply if you’re eligible
• USDA loan: For those on low-to-moderate incomes buying in designated rural areas. Zero down payment required. Credit score requirements vary by lender but often 640. Low mortgage insurance rates
• WHEDA loans: May include competitive interest rates and can be used with down payment assistance. More information below

Note that government loan programs (including FHA, VA, and USDA home loans) require you to buy a primary residence. That means you can’t use these loans for a vacation home or investment property.

In addition, most programs let you use gifted money or down payment assistance (DPA) to cover your down payment and closing costs. Depending on the mortgage loan you choose, you could potentially get into your new house with minimal cash out of pocket.

If you’re unsure which program to choose for your first mortgage, your lender can help you find the right match based on your finances and home buying goals.

Wisconsin first-time home buyer programs

The Wisconsin Housing and Economic Development Authority (WHEDA) has two main types of mortgages:

• WHEDA Advantage Conventional: A type of conventional mortgage conforming with Fannie Mae’s rules. This is a 30-year fixed-rate mortgage extended to single-family residences, 2-4 unit homes, manufactured homes, and condos. Homeowners can also use this to refinance their current mortgages. Minimum credit score 620
• WHEDA Advantage FHA: A 30-year fixed-rate mortgage backed by the Federal Housing Administration (FHA). Buyers can purchase single-family homes, 2-unit properties, and HUD-approved condominiums. Minimum credit score 640 (higher than FHA’s standard minimum of 580)

WHEDA’s website lets you compare the two loans side by side to see which suits you better. And, if you’re eligible for down payment assistance, both loans may be available with a zero down payment. There’s also a rehabilitation program if you wish to buy a home that requires renovation.

• Note that you must choose a mortgage lender from a WHEDA-approved list. There are also income and purchase price limits that vary my household size and county
• You must also undergo a home buyer education course to qualify. And you must occupy the home for the duration of the mortgage; so this isn’t an opportunity for landlords or vacation home buyers

If you wish to buy a home in one of the 15 counties that make up Wisconsin’s rural target areas, you may get a lower mortgage rate. Read WHEDA’s flyer about these areas.

WHEDA runs regular online webinars for Wisconsin first-time home buyers. And those could provide a great opportunity for you to learn more and ask questions. So check when the next one is scheduled.

Wisconsin first-time home buyer grants

WHEDA doesn’t offer home buyer grants. Instead, it provides second mortgage loans to eligible borrowers through two down payment assistance (DPA) programs.

• WHEDA Easy Close DPA: Lends you anything between $1,000 and 6% of the purchase price of your next home. This comes as a 10-year, fixed-rate second mortgage that you repay in equal monthly installments. The rate on that loan will be the same as for your first mortgage. You can use this DPA with WHEDA’s conventional or FHA loans
• WHEDA Capital Access DPA: Lets you borrow between $3,050 and 3% of the home’s purchase price. But it’s a silent 30-year loan with a 0% interest rate and no monthly payments. You repay the amount you borrowed when you move out, sell the home, refinance, finish paying off your mortgage, whichever happens soonest

One of these WHEDA statewide DPA programs may turn out to be your best bet. But don’t sign up until you’ve checked whether your city, county, or town offers its own program.

There are some links below and you can run an internet search: “down payment assistance in [your town or city or county].” One of those may be even better.

Buying a home in Wisconsin’s major cities

Milwaukee, Madison, and Green Bay experienced moderate home price inflation between April 2021 and April 2022. But all three offer assistance programs to help qualifying borrowers with their down payments and closing costs. So take heart!

Milwaukee first-time home buyers

The median list price in Milwaukee was $174,900 in April 2022, according to Realtor.com. That was up 6% year over year.

At that median price, your down payment options might fall between:

• $5,250 for 3% down payment
• $34,980 for 20% down payment

Housing Resources Inc. lists several down payment assistance programs open to Milwaukee home buyers. Some are restricted to current residents of the city, but others may be open to anyone who wishes to buy there.

All or most have income limits and are mainly intended for those with low or moderate earnings.

For example, Milwaukee Home Down Payment Program is “provided by the City of Milwaukee [and] offers forgivable grants of $5,000 for a purchase in the City of Milwaukee or $7,000 if you purchase in the Community Development Block Grant Area …” Provided you remain in the home for five years, that loan is forgiven.

Madison first-time home buyers

The median list price in Madison was $350,000 in April 2022, according to Realtor.com. That was up 4.3% year over year.

At that median price, your down payment options might fall between:

• $10,500 for 3% down payment
• $70,000 for 20% down payment

The City of Madison has a DPA program that offers up to $20,000 to eligible borrowers. Income limits vary by the size of the household, but you’ll need modest or moderate earnings. Your first mortgage must last 30 years and you must contribute 1% of the purchase price from your own resources.

This DPA loan is a second mortgage that you have to repay upon “sale, cash-out refinance for other than property improvements, the property is transferred or ceases to be the primary residence of the home buyer.” So, in some ways, it’s similar to WHEDA’s offer.

But there’s one important difference. You may have to repay the amount you borrowed plus a “proportional share of appreciation based on the percentage of assistance provided by the City.” In other words, the city might want a share of the amount by which your home’s value has risen since you bought it.

Green Bay first-time home buyers

The median list price in Green Bay was $249,900 in April 2022, according to Realtor.com. That was up 9.4% year over year.

At that median price, your down payment options might fall between:

• $7,500 for 3% down payment
• $49,980 for 20% down payment

NeighborWorks Green Bay offers down payment and closing cost assistance loans to first-time buyers that “tend to range from $3,000-$8,000.”

Like others we’ve covered in Wisconsin, this DPA has to be repaid if you cease to be the owner-occupier, refinance, or repay your main mortgage. And as always, there are various eligibility criteria and conditions that have to be met. So click the link for details.

Where to find home buying help in Wisconsin

All the organizations we’ve listed above should provide advice freely to any first-time home buyer in Wisconsin or their local area.

In addition to our selection, the U.S. Department of Housing and Urban Development (HUD) provides a few lists for statewide, regional, and local resources:

Statewide and regional first-time home buyer resources in Wisconsin:

Wisconsin first-time home buyer programs by city/town:

What are today’s mortgage rates in Wisconsin?

You can see today’s live mortgage rates in Wisconsin here.

Experiment with a mortgage affordability calculator to see how down payment, interest rates, homeowners insurance, and property taxes will all affect your monthly mortgage payment.

When you’re ready to start the home buying process, make sure you get personalized rate quotes from at least three mortgage lenders.

Don’t just look at advertised rates online; actually apply for preapproval and compare the interest rates and fees you’re offered. That’s the only way to know you’re getting the best deal possible on your new home loan.

¹Source: Wisconsin Realtors Association Home Sales Report

²Source: Experian.com study of 2021 and 2020 data

³Based on a review of the state’s available DPA grants at the time this was written