New Money For First Time Home Buyers in Wisconsin
August 24, 2010
DULUTH, Minn. – If you are a first time home buyer in Wisconsin with good credit wanting to put little money down on a mortgage, you might be in luck.
The Wisconsin Housing and Economic Development Authority (WHEDA) is now offering a new loan through a federal program called the Fannie Mae Advantage.
The housing authority says the loan gets first-time home buyers into a single-family home with as little as $1,000 down.
It gives them 100 percent financing with a 30-year fixed low interest rate, making the loan affordable and stable.
The homebuyers getting these loans so far have had credit scores of about 680 or higher and here in Douglas County, they must have a household income below $66,000 a year for a two person household to qualify.
There is also a limit on the price of the house homebuyers want. In Douglas County, the home can be no more than $235,000 to qualify.
Those opposed to these new loans say they can still be risky business with such a low down payment and could potentially put buyers in over their heads.
Some say it’s a similar type of loan that led to the housing crisis in the beginning.
But the executive director of the Wisconsin housing authority told us today, the loans are designed to avoid that scenario.
“The beauty about this product here is although it is zero down… we underwrite it with very strict underwriting criteria to try and mitigate the risk of forclosure,” said WHEDA’s executive director Antonio Riley.
Wisconsin is one of three states taking part in this new loan program.
One Superior realtor told me the loan is rare because it offers 100 percent financing with so little down but the interest rates, although still low, are not the lowest she has seen.
Posted to Web by Jena Pike
jpike@northlandsnewscenter.com
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I have to admit I was originally a fan of 100% financing for first time buyers, mostly due to the fact that my husband & I were able to buy our first home back when the 80/20 loans were around and that allowed us to buy a home we could afford and save to “fix it up” in a couple years. We love our home & 5 years later couldn’t be more proud. I have recently had a listing with an offer made by a buyer using a Fed VA program and asking my seller to pay $6000 of the closing costs! I could hardly believe that it was possible for a $149,900 listing to have $6000 of closing costs, but alas the buyer raised the price of his offer to $152,900 to finance the $3000 my seller wasn’t willing to pay. Of course the appraisal came back at $150,000 and now here we sit with a seller scraping around zero $$ out on his sale and a buyer who has no money to pay for his loan costs! I am furious that this is the attitude among buyers, entitlement! Not to mention, a local lender in our area offers the exact same loan for $1200 less in closing costs, and yet buyer is unwilling to move his financing. Long story short, I would most definitely be on board with doing away with 100% financing all-together….we’ve obviously learned nothing about responsible spending in the past couple of years.