Financing options

As the consumer lending market tightens, home buyers who do not have at least a 5% down payment for a home are finding it difficult to obtain financing for a home purchase. Traditionally, these buyers have had the option of getting an FHA loan if they have a 3% downpayment or utilizing Rural Development for their mortgage if they don't. Rural Development is currently not lending, however. Legislation is in the works to continue funding this government program, but until then, they are not lending.

Fortunately, another government agency has begun lending once again. WHEDA (Wisconsin Housing and Economic Development Authority) had suspended lending last year due to issues with the private mortgage insurance market. WHEDA loans are once again an option for buyers now, though.

WHEDA's newest loan program is WHEDA Fannie Mae Advantage. This loan allows buyers to purchase a home with as little as $1,000 down. WHEDA Advantage has a competitive, low interest rate and does not require any private mortgage insurance, making for a very affordable mortgage payment for consumers.

WHEDA loans are a very savvy option for home buyers. A home seller who is given an offer with a WHEDA pre-approval letter can have a measure of confidence in the offer. WHEDA does a very strict pre-approval process, fully documenting a buyer's ability to afford a mortgage before the pre-approval is given. WHEDA also requires home buyer to complete an education course before the loan is given, helping to insure that a buyer understand the mortgage loan they are taking out.

All the local banks are able to work with WHEDA, so talk with the mortgage broker at your bank about this great option.