Updated November 25, 2020
3 min read
Known for both great cheeses and great lakes, Wisconsin is a wonderful place to live and a phenomenal place to purchase a home.
Looking for the perfect home can be exciting, but looking for the right home loan can be a hassle. To make the process easier, consider FHA loans as they are great for first-time home buyers and those of us with not-so-perfect credit scores. Keep reading to see why an FHA loan in Wisconsin may be the right home loan option for you.
Why Consider an FHA Loan in Wisconsin
Cost of living and crime rates in Wisconsin are lower than the national average, making it a great place to buy a home. Whether you are looking to purchase in Green Bay, Hudson or Madison, an FHA loan could be the best mortgage option for you. Many residents have chosen FHA loans, and as of April 2019, the total value of FHA loans in the state of Wisconsin was over $87 million!
Benefits of FHA Loans in WI
- FHA loans are great for first-time homebuyers, especially those who can’t or don’t want to put down a large down payment.
- FHA mortgage rates are typically lower than conventional mortgage rates.
- FHA down payment and credit score requirements are typically lower than conventional loans
- Sellers can contribute up to 6% of the purchase price or appraised value (whichever is less) towards the buyers’ closing costs.
- FHA loans are assumable
FHA Loan Limits in Wisconsin
While there is a maximum loan limit on Wisconsin FHA loans, the goal of the program is to ensure that most people can qualify for the loan and purchase a home. That said, the limit is adjusted yearly and depends on the area where you choose to reside. In most of Wisconsin, the baseline FHA loan limit of $314,827 applies, but in a place like Milwaukee, the limit is a bit higher at $327,750 due to the relatively high cost of real estate in the area. Use the link below to see the full list of Wisconsin FHA loan limits for 2019.
Are You Eligible for an FHA Loan in WI?
You may be eligible for an FHA loan, if you:
- Have 2 years of steady employment, preferably with the same employer.
- Have had steady income (or increasing income) in the past two years.
- Have had less than two 30-day periods of late payments on your credit report.
- Have declared bankruptcy no less than two years ago and have maintained good credit since.
- Have not been a party in a foreclosure for at least three years and have maintained good credit since.
- Anticipate your mortgage payment will be equal to or less than 30% of your gross income.
What Do You Need to Apply for an FHA Loan in WI?
Buyers must be able to provide the following information and documents as requested by lenders:
- The addresses of all your residences over the past two years.
- The names of your employers over the past two years.
- W2's for the past two years and current paycheck stubs.
- Your current gross monthly salary.
- Your Social Security Number.
- Names, addresses, and account numbers with balances on all checking and savings accounts.
- Addresses and loan information of any other real estate you owned.
- Self-employed individuals will need to provide personal tax returns for the past two years and a current income statement and balance sheet for the business.
- Students will need to provide evidence of enrollment. If you have student loans, you need to provide verification information.
Note: Facts and figures sourced from the latest statistics available at the time of this writing including data from the United States Department of Labor, United States Census Bureau and the United States Department of Housing and Urban Development.