Nationwide first-time homebuyer programs

A “conventional” mortgage sourced through the private market has pretty demanding requirements, including a credit score of at least 620 and often requires a minimum down payment of 5%.

More: Use these savings accounts to build up your down payment.

That’s easier said than done for many first-time buyers, so you may want to look into one of these nonconventional mortgages offered through the federal government.

FHA loans

FHA loans were created by the Federal Housing Administration, which is a division of the Department of Housing and Urban Development, to help more Americans become homeowners.

These loans typically have less stringent requirements. You’ll need a minimum credit score of 580 and a 3.5% down payment, but if you’re able to put down more upfront, you could be eligible with a credit score as low as 500.

Explained: FHA Loan Requirements.

A walkthrough of how to meet the FHA's requirements.

See Guide

VA loans

These loans were created thanks to an act passed by Congress in 1944 to help veterans secure homes. As a result, the U.S. Department of Veterans Affairs (VA) can guarantee or insure home loans made to veterans by various lending institutions.

Active service members, veterans and some surviving military spouses can all qualify for a VA loan. There are fees associated — notably a sizable funding fee — but they are also exempt from down payment and mortgage insurance obligations.

USDA loans

USDA loans are for lower-income rural and suburban Americans and are guaranteed by the United States Department of Agriculture. Like VA loans, these loans don’t require a down payment or private mortgage insurance.

With a USDA home loan, you’ll have to pay a few fees: an upfront 1% guarantee fee and an annual 0.35% fee. But the total cost still ends up less than the amount you’d pay in mortgage insurance on another type of loan.

These loans aren’t meant for most households: They have a strict income limit. The current income limits in most parts of the U.S. are $86,850 for one- to four-member households and $114,650 for five- to eight-member households, but the thresholds may be higher if you live in a county with a steeper-than-average cost of living. The USDA’s website has the exact figures for each region.

First-time home-buyer WI programs: Who qualifies?

WHEDA was established to help lower-income Wisconsinites, specifically. To ensure funding goes to the families that need it most, applicants have to fall within certain income and purchase price limits.

To check whether you qualify, WHEDA suggests you reach out to one of its participating mortgage lenders. Your lender will help you navigate the whole loan application and homebuying process.

If you’re a first-time homebuyer, you’ll be required to attend a homebuyer education class as well.

More: Get a free credit score and credit monitoring from Credit Sesame.

Wisconsin first-time homebuyer programs in 2021

Infographic on programs for first-time home-buyers in Wisconsin

WHEDA offers two kinds of mortgages with fixed rates. Neither of these options require that you be a first-time homebuyer, but you’ll have to be looking to buy a home in Wisconsin to use as your primary residence.

In addition to its loan and assistance programs, WHEDA offers a number of guides for hopeful homeowners, including a True Costs of Homeownership 3pamphlet.

WHEDA Advantage Conventional

This program is designed for borrowers who want a conventional loan. Provided you have a minimum credit score of 620, you can qualify for a 30-year fixed-rate mortgage with some special perks.

First-time buyers, veterans and people buying in specific areas can qualify for lower interest rates. Users may also qualify for down payment assistance, extra money for renovations and a lower cost for mortgage insurance.

There’s also no down payment required when buying a single-family home. However, if you’re buying a two- to four-unit home, you’ll need to put down at least 3% of the purchase price and show at least six months in reserve funds.

WHEDA Advantage FHA

The FHA program’s requirements and benefits are similar to those of the conventional program. However, the credit score requirement is a little higher, with a minimum score of 640.

You need to put down a minimum of 3.5%, but you can cover it with one of WHEDA’s down payment assistance programs.

The Mortgage Underwriting Process Explained

A walkthrough of proven steps to getting a mortgage approval.

See Guide

WHEDA Easy Close DPA

This second-mortgage program is designed to help homebuyers cover the upfront costs of buying a home. To qualify for down payment and closing cost assistance, you’ll have to use one of WHEDA’s primary mortgage programs.

You can borrow up to 6% of the purchase price, with a minimum loan of $1,000.

The loan has a 10-year fixed rate that is the same as your first mortgage, which you’ll repay through monthly installments.

WHEDA Capital Access DPA

This down payment assistance program offers you a 30-year loan, with 0% interest and no monthly payments.

However, the total household income limits are generally lower than of WHEDA’s other programs. You’ll have to check with your mortgage lender to determine whether you qualify.

When paired with a WHEDA conventional loan, you can borrow up to 3% of the purchase price, with a minimum of $3,050.

With an FHA loan, the maximum is either $3,050 or 3.5% of the purchase price (whichever is greater), while the minimum is $1,000.

The Best Lenders for First-Time Homebuyers

Click Here

Next steps

Now you know what programs are out there to help — but where do you even start?

Well, your credit store is crucial if you want to qualify for any of these options. The site Credit Sesame can help you find out your score for free.

Is your score not exactly up to WHEDA’s standards? There are some great options out there, like Self credit repair, that will help you get the score you need to qualify.

With your score in hand, your next step is to gather the essential documents you need to demonstrate that you’ve got a steady income.

Once you’re all set, it’s time to get pre-approved for a mortgage so you can start house hunting.

Support for new homebuyers in other states

Arizona Department of Housing (ADOH) Read More
Arkansas Development Finance Authority (ADFA) Read More
California Housing Finance Agency (CalHFA) Read More
Colorado Housing and Finance Agency (CHFA) Read More
Connecticut Housing Finance Authority (CHFA) Read More
Delaware State Housing Authority (DSHA) Read More
Florida Housing Finance Corp. (Florida Housing) Read More
Georgia Dream Read More
Hawaii Housing and Finance Development Corporation (HHFDC) Read More
Idaho Housing and Finance Association Read More
Illinois Housing Development Authority (IHDA) Read More
Indiana Housing and Community Development Authority (IHCDA) Read More
Iowa Finance Authority (IFA) Read More
Kansas Housing Resources Corporation Read More
Kentucky Housing Corporation (KHC) Read More
Louisiana Housing Corporation (LHC) Read More
MassHousing (Massachusetts) Read More
Michigan State Housing Development Authority (MSHDA) Read More
Minnesota Housing Read More
Missouri Housing Development Commission (MHDC) Read More
Montana Board of Housing (MBOH) Read More
Nebraska Investment Finance Authority (NIFA) Read More
Nevada Housing Division Read More
New Mexico Mortgage Finance Authority (MFA) Read More
State of New York Mortgage Agency (SONYMA) Read More
North Carolina Housing Finance Agency (NCHFA) Read More
Ohio Housing Finance Agency (OHFA) Read More
Oklahoma Housing Finance Agency (OHFA) Read More
Oregon Housing and Community Services (OHCS) Read More
Pennsylvania Housing Finance Agency (PHFA) Read More
South Dakota Housing Development Authority (SDHDA) Read More
Tennessee Housing Development Authority (THDA) Read More
Texas Department of Housing and Community Affairs (TDHCA) Read More
Utah Housing Corp Read More
Virginia Housing Read More
Washington State Housing Finance Commission (WSHFC) Read More
Wisconsin Housing and Economic Development Authority (WHEDA) Read More
Wyoming Community Development Authority (WCDA) Read More

About the Author

Sigrid Forberg

Sigrid Forberg

Staff Writer

Sigrid is a staff writer with MoneyWise. A graduate of Carleton University's journalism program, she spent the better part of the last six years writing about business and retail. In her spare time, she enjoys reading, baking and riding her bicycle.

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