Buying your first place in Cottage Grove can feel out of reach. WHEDA loans can change that. With the right lender and a clear checklist, you can lower your upfront cash, keep payments predictable, and move faster from searching to keys in hand.
WHEDA Loans in Cottage Grove: Overview
WHEDA is a Wisconsin program that pairs a fixed-rate first mortgage with flexible features and optional help for down payment and closing costs. It is built for owner-occupants and is widely used across Dane County.
Here is the big picture:
- The WHEDA Advantage first mortgage is available in conventional and FHA versions with program-specific underwriting rules and benefits for eligible buyers through WHEDA’s lender resources.
- You can pair certain first mortgages with down payment and closing cost help through a second mortgage option that is designed to reduce your cash to close see Easy Close program details.
- WHEDA also offers a Mortgage Credit Certificate in some cases, which can provide a federal income tax credit on a portion of your mortgage interest if you qualify. Ask your tax professional how this might help you, and review WHEDA’s guidance on tax topics and recapture rules on WHEDA’s tax info page.
Your goal is simple: confirm you meet the program rules, pick the right lender, and line up a property that fits.
WHEDA Eligibility: Who Qualifies
First-Time Buyer and Occupancy Rules
Most borrowers use WHEDA as first-time buyers, which usually means you have not owned a home in the past three years. There are exceptions for veterans and for purchases in designated target areas. You must live in the home as your primary residence. Program definitions and exceptions are detailed in WHEDA’s eligibility matrices here.
Income and Price Limits
WHEDA sets county-level income and purchase price limits that change from time to time. Your household income and your home’s price must fall within the current limits for Dane County. Always check the latest numbers before you apply using WHEDA’s current limits document published here.
Credit, Debt, and Reserves
Lenders review your credit score, payment history, and debt-to-income ratio. Many WHEDA conventional approvals run through automated underwriting, and program matrices outline score and DTI considerations. If your profile needs work, your lender can explain options and any manual-underwrite scenarios within WHEDA rules see the eligibility matrix.
Property Type and Location
Eligible property types can include single-family homes, condos, townhomes, some manufactured homes on owned land, and certain 2 to 4 unit homes you will live in. All property and occupant rules must meet the program’s guidelines outlined in WHEDA resources.
Education and Lender Participation
Some WHEDA options require homebuyer education. You must also work with a participating WHEDA lender. These lenders know the program details and will guide you through underwriting and compliance steps find program details.
Step-by-Step: How to Qualify
Confirm Program Fit
- List your goals: low down payment, stable payment, and owner-occupied use.
- Check that you meet the first-time buyer and occupancy rules or any applicable exception per WHEDA’s matrix.
- Verify your household income and planned price against the current Dane County limits using WHEDA’s limits PDF.
Choose a Participating Lender
- Select a lender experienced with WHEDA so your file is packaged correctly from day one.
- Ask which WHEDA first mortgage fits you best and whether you are a match for available assistance options program overview.
Get Preapproved and Compare
- Complete a full application with income, assets, and credit authorization.
- Review side-by-side estimates: WHEDA vs. a standard loan. Look at rate, mortgage insurance, and cash to close. Your lender will run automated underwriting and confirm the best approach within WHEDA’s rules see eligibility details.
Write Offers with WHEDA Terms
- Use your preapproval to write clean, realistic timelines.
- If pairing down payment help, include enough time for the second mortgage documentation and closing package Easy Close program reference.
- Keep your lender in the loop on property type, HOA fees, taxes, and any repairs so they can validate program fit early.
Close Confidently
- Expect standard steps: appraisal, title, insurance, and compliance review.
- Complete any required homebuyer education promptly.
- Your lender issues final approval, you sign both the first mortgage and any assistance documents, and you get keys.
Down Payment and Closing Help
Assistance Options You Can Pair
Many buyers pair the WHEDA first mortgage with additional help to cover part of the down payment and closing costs. WHEDA’s widely used option is a fixed-rate second mortgage that works with eligible WHEDA first loans see Easy Close basics. Some assistance programs are subject to funding cycles. WHEDA’s Capital Access option, for example, has been paused at times; WHEDA indicated it was unavailable for the remainder of 2025 as of May 1, 2025. Always confirm current availability with your lender via WHEDA’s lender toolkit.
Cash to Close and Budgeting
Your exact cash to close depends on loan choice, assistance amount, interest rate, mortgage insurance, prepaid taxes and insurance, and any seller credit. Ask your lender to model a few scenarios so you can choose the right blend of payment and upfront cost within WHEDA rules program resources.
Gift Funds and Grants
Gift funds from allowed sources and local grants can often be layered with WHEDA when they meet program and lender rules. You will need a gift letter and paper trail for funds. Ask your lender to confirm what is acceptable and how to document it eligibility framework.
Documents and Timeline
Income, Assets, and ID
Gather these early:
- Two years of federal tax returns and W-2s or 1099s
- Recent paystubs and year-to-date income statements
- Bank and asset statements
- Government-issued ID and Social Security numbers for adult household occupants
- Information on other income like Social Security or child support
WHEDA counts all intended occupants age 18 and older toward compliance income, so your lender will verify total household income against current limits see WHEDA rules.
Extra Items for Special Cases
- Self-employed: two years of business and personal returns, year-to-date P&L and balance sheet
- Variable or commission income: two-year history and year-to-date documentation
- Rental income on a 2 to 4 unit you will occupy: leases, market rent data, and reserves as required by program rules
Typical Milestones to Closing
- Application and document upload
- Automated underwriting and initial disclosures
- Offer accepted and appraisal ordered
- Underwriting review of income, assets, title, and property conditions
- Homebuyer education completion if required
- Final approval and clear to close
- Signing and funding
Property Considerations for Buyers
Single-Family, Condo, and New Build
Property type affects documentation and underwriting. For condos, the lender may review the association budget, insurance, and owner-occupancy. For new builds, timelines for completion and final inspections matter. Your lender will confirm that the property meets WHEDA and investor standards lender guidance.
Appraisal, Repairs, and Conditions
Appraisals must support value and safety. Some issues, like peeling paint or missing handrails, may need to be corrected before closing, especially with certain loan types. Plan for a repair window so your closing stays on track.
HOA, Taxes, and Insurance
Association dues, property taxes, and homeowners insurance affect your debt-to-income ratio. Share accurate figures with your lender early. Ask about flood or special insurance if the property requires it.
Avoid These Common Pitfalls
Income and Job Changes
Avoid switching employers or pay structures mid-process if you can. If a change is unavoidable, talk to your lender first so they can document it correctly.
Credit Moves During Underwriting
Do not open new credit, miss payments, or make large purchases until after closing. Keep balances low and respond quickly to any credit questions from your lender.
Missing Education or Deadlines
If your WHEDA option requires homebuyer education, complete it as soon as you go under contract. Turn in requested documents within 24 to 48 hours to keep your file moving.
Local Guidance to Move Forward
Why a Local Agent Helps
A local agent matches your financing with the right properties. That includes watching HOA rules, condo warrantability, new-construction timelines, taxes, and repair scope so your WHEDA approval stays clean. You get straighter answers and fewer surprises.
Connect With WHEDA Lenders
If you are ready to explore WHEDA, ask for introductions to participating lenders who work these files every week. They can confirm eligibility, check current income and price limits, explain available assistance, and issue a strong preapproval using WHEDA’s current rules and documents starting point.
Your Next Steps in Cottage Grove
- Check your basic fit for first-time or exception status, occupancy, income, and price using WHEDA’s current limits.
- Talk with a participating lender about the WHEDA first mortgage, pairing down payment help, and whether an MCC could benefit you program resources and tax info.
- Line up properties that match your budget and timeline, and write offers with realistic dates for appraisal, condo review if needed, and any assistance paperwork.
When you are ready, I will help you pair the right WHEDA path with the right home, including new construction and condo options that keep costs predictable. Start a conversation with Fred Van Buren to get local guidance, lender introductions, and a plan to go from preapproval to closing, step by step.
FAQs
Do I have to be a first-time buyer to use WHEDA?
- Not always. WHEDA generally serves first-time buyers, but veterans and purchases in designated target areas can be exempt. Check the program matrix and confirm your status with a participating lender see WHEDA eligibility.
How do I know if my income and price qualify in Dane County?
- Compare your household income and the home’s price to WHEDA’s current Dane County limits. Limits change, so use the most recent WHEDA PDF before you apply current limits here.
Can I get help with my down payment and closing costs?
- Yes. WHEDA’s second-mortgage assistance is commonly paired with eligible first mortgages. Your lender will size it within program rules and confirm availability Easy Close reference.
Is Capital Access available right now?
- Assistance programs can be funding-dependent. WHEDA indicated Capital Access was not available for the remainder of 2025 as of May 1, 2025. Ask your lender to confirm current status lender toolkit.
What credit score do I need for WHEDA?
- Lenders use automated and, in some cases, manual underwriting following WHEDA matrices. Many approvals start near common agency thresholds, but exact requirements depend on your full file and lender overlays eligibility matrix.
Can I use a Mortgage Credit Certificate with WHEDA?
- Many buyers can. An MCC may provide a federal tax credit on part of your mortgage interest. Review WHEDA’s guidance and ask a tax professional about your benefit and any recapture considerations WHEDA tax info.
What documents should I prepare before I apply?
- Two years of tax returns and W-2s, recent paystubs, bank statements, ID, and documentation for any other income. Your lender will confirm anything else needed for your situation and WHEDA compliance program resources.
