In Wisconsin, the Best First Time Home Buyer Programs May Be the Old Standards: FHA, VA and USDA
Posted by madisonmortgage on September 25th, 2009
Wisconsin First time homebuyer’s programs sometimes seem like an urban legend. Searching for mortgage programs that are specific to this group is almost impossible. There are, on a county by county basis, down payment and closing cost assistance programs but nothing more.
The government is offering tax rebates to people that purchase a home (even a houseboat, for example) as their primary residence by November 30th. As long as they haven’t owned a home in the past three years, one could qualify for up to $8000. The problem is that most people need to borrow money from a bank to purchase a home and they are making it very difficult to do.
Wisconsin FHA, VA and USDA’s Rural Housing programs seem to be the best available options. These programs have been around for a long time and are very consumer/buyer oriented. They also give the banks (that’s where the money comes from!) some assurances that they will receive some or all of their money back if a default occurs
FHA is the most widely used and is overseen by HUD (Housing and Urban Development). This program requires a 3.5% down payment and has a creative way to collect a mortgage insurance premium that lowers your monthly payment compared to a conventional loan. Loan sizes are limited on county by county basis using HUD and census data.
VA is a 100% loan program but is limited to qualified veterans of the US military. They add a “funding fee” to the loan amount, based on the number of times a vet uses the program, to avoid monthly mortgage insurance payments. $417,000 is the loan limit unless the veteran is contributing a down payment.
USDA Rural Housing also uses a funding fee to offset mortgage insurance and will approve up to 102% of the value of a home (no, you cannot get cash back). The limitations here are geographic and income guidelines based on the size of the community and the number of people in your family.
All of these programs have different restrictions concerning types of properties (condos, 2-4 units, manufactured, etc.) and credit issues (scores, BK, collections, etc.). Most cases would show them to be more accepting than a conventional loan. Researching the guidelines for each program should be easy.
The banks that make or purchase these loans ALL have “overlays” or additional guidelines that must be met for each loan. Please seek out an experienced Wisconsin loan officer that knows the different road blocks you may face before they derail your effort to buy a home.
Dennis Hardy
Toll Free: (877) 240-5810 x104
dennis.hardy@madisonmortgageguys.com
www.madisonmortgageguys.com
Visit my blog at http://www.madisonmortgageguys.com/blog/
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Wisconsin First Time Home Buyer Programs
