HOME START Loan Guidelines
DOWN PAYMENT/CLOSING COST ASSISTANCE
Since 1991
The REALTORS® Association of South Central Wisconsin Housing Foundation (hereinafter referred to as the “Foundation”); dedicated to increasing access to affordable housing in Adams, Columbia, Crawford, Dane, Dodge, Grant, Green, Green Lake, Iowa, Jefferson, Juneau, Lafayette, Marquette, Richland, Rock, and Sauk counties; is an equal opportunity and fair housing organization seeking proposals from lenders for the purpose of aiding home buyers in the purchase of affordable housing.
The Foundation will make available to qualified applicants a low interest loan to be used for the down payment and/or closing costs associated with the purchase of a home. The actual loan interest rate and other terms will be set at the time the loan is approved. Because the Foundation Loan Committee will weigh each application as to individual need, demonstrated ability and willingness to repay, and other available resources and funding sources, funding will be at the sole discretion of the Foundation.
Contact Person
Heather Boggs
Wisconsin Partnership for Housing Development
Phone 608-258-5560 X32 FAX 608-258-5565
Email foundation@wisre.com
Source of Funds
Contributions from Members of the REALTORS® Association of South Central Wisconsin and fundraising activities
Funding Cycle
Fiscal year January-December
Minimum/Maximum Amount of Assistance
Maximum of $6,000 or 3% of purchase price; whichever is lower.
Eligible Uses-Down Payment/Closing Costs
Based on need.
Repayment Terms
Deferred Payment Loan – Due when property is sold, refinanced, vacated (non-owner occupied), title is transferred, or upon full repayment of the first lien loan. The Borrower may make partial or full payment of the loan at any time, without penalty.
Interest
0% – Subject to change, but no higher than 75% of rate on primary loan.
Property Location
Dane, Sauk, Columbia, Dodge, Jefferson, Rock, Green, Iowa, Grant, Lafayette, Richland, Crawford, Green Lake Counties
Eligible Properties
Owner-occupied residential properties (single-family home, condo or 1/2 duplex)
Income Limit
Maximum 80% of County Median Income (for county where property is located).
Maximum Purchase Price
No specific maximum price – income dependent.
Ratios
Maximum of 45; minimum of 25 DTI – with exceptions made for borrowers with strong compensating factors.
Loan To Value
Maximum combined loan to value may not exceed 105%.
Minimum Credit Score
Minimum recommended credit score of 620 (with at least 3 traditional trade lines) or alternate credit sources, if no score available.
First Time Home Buyer Limitation
Not limited to first time home buyers.
Borrower Contribution
A minimum of 1% of the purchase price shall be contributed by borrower from their own funds (can be gifted).
Seller Contribution
A maximum of 3% seller contribution may be included in the transaction.
Asset Limitation of Borrower
Applicants with excessive assets may not qualify (retirement money is excluded). Does not include 401K or IRA funds. Remaining Liquid assets cannot exceed 12 months PITI (or $15,000) – the greater of the two.
Stacking Limitations
None
Processing Time Required
Minimum 10 business days – No preapprovals
Documents Required from the Primary Lender
- A copy of the lender’s complete and correct final version of the application for primary financing
- Copy of credit report, and/or alternate credit information (3 valid sources), and any other documentation that is deemed necessary
- Underwriting approval letter
- Borrower Affidavit (WHEDA, City or Home Start ones are all acceptable)
- Letter of request (indicating loan amount requested, estimated closing date and other pertinent information)
- Loan Estimate
- 1008 Transmittal form (prior to closing)
- Title work (prior to closing)
- Closing Disclosure (prior to closing)
- Confirmation of funding approval for any other secondary financing
Predatory Practices Limitations
Loan requests may be denied based on excessive fees or interest rates on the first mortgage loan.
Miscellaneous
Loan rate and term on primary loan must be fixed for a minimum of 3 years. No cash back at closing.
Lender Participation Requirements
None
