Down Payment Assistance in Madison, WI

Overview

Quick Comparison of Every Program

Six programs cover almost every Madison-area first-time buyer. Here they are side-by-side. The details (eligibility, how repayment works) are in the sections below.

Sources: City of Madison HBAD program documents (June 2025), WHEDA program pages, and two Madison-area loan officers (verified May–June 2026). Always confirm current amounts with your lender before applying.

Program 01

City of Madison HBAD — Up to $35,000

The Home Buyers Assistance Down Payment program (HBAD) is the largest single source of down payment help in Dane County — but it only covers properties inside the City of Madison. It's a deferred shared-appreciation mortgage: no monthly payments, and you only repay when you sell, transfer the property, refinance with cash out, or stop using it as your primary residence.

Who qualifies

• First-time home buyer (no homeownership in the last 3 years)
• Household income at or below 80% of Dane County AMI
• Property must be inside City of Madison limits (since May 1, 2023)
• Borrower contributes a minimum of 1% of the purchase price
• Liquid assets at closing capped at 12 months of PITI (case-by-case exceptions)
• Maximum housing ratio 38%, total debt ratio 55%

How repayment works

HBAD is structured as a deferred shared-appreciation second mortgage. You make no monthly payments. When the home is sold or you do a cash-out refinance, you repay the original assistance plus a share of the home's appreciation, calculated using the program's formula. The longer you live in the home and the less the property appreciates, the smaller the repayment.

Source: City of Madison — Down Payment Assistance

Program 02

WHEDA Easy Close DPA — Up to 6% of Purchase Price

Easy Close is the most flexible WHEDA DPA program. You can borrow a minimum of $1,000 and up to 6% of the home's purchase price. It's structured as a 10-year second mortgage at the same interest rate as your first mortgage, with monthly payments. The cash can be used for the down payment, closing costs, or both.

• Must be paired with a WHEDA Advantage first mortgage
• 10-year repayment term with monthly payments
• Interest rate matches your first mortgage rate
• Not restricted to first-time buyers (depends on the first-mortgage product)

Easy Close is best if you want lower upfront cash and don't mind a small additional monthly payment for the first 10 years.

Source: WHEDA Available Programs

Program 03

WHEDA Capital Access DPA — $7,500 Flat

Capital Access is a $7,500 flat-amount DPA loan. It's a 30-year second mortgage at 0% interest with no monthly payments — you only pay it back when you sell, refinance, or pay off the first mortgage. The trade-off is that Capital Access has stricter income tiering than Easy Close.

• $7,500 flat amount (not based on a percentage)
• 30-year second mortgage at 0% interest
• No monthly payments — due on sale, refi, or first-mortgage payoff
• Must be paired with a WHEDA Advantage first mortgage

Capital Access is usually the better pick if you qualify by income, because the 0% rate and no monthly payment make it effectively free money until you sell.

Source: WHEDA Available Programs

Program 04

FHLBank Chicago Downpayment Plus — Up to $10,000

The Federal Home Loan Bank of Chicago's Downpayment Plus (DPP) program is a grant — not a loan — offered through participating member banks and credit unions. You can receive up to $10,000 toward down payment and closing costs, and it's forgiven after you live in the home for 5 years. If you move out sooner, you pay back a prorated portion.

• Up to $10,000 grant
• Buyer must contribute a minimum of $1,000 of their own funds
• Forgiven after 5 years of owner-occupancy
• Prorated payback if you sell, refi out, or move before year 5
• Income limits apply (varies by household size and area)
• Available only through participating FHLBank Chicago member lenders

Almost every Madison-area lender who does first-time-buyer loans participates in DPP. Ask your loan officer directly: "Are you a participating FHLBank Chicago DPP lender, and is the program funded right now?" DPP funds open and close each year, so timing matters.

Program 05

Movin' Out — For Households With a Permanent Disability

Movin' Out is a nonprofit lender in Madison that offers down payment assistance specifically to households where someone has a permanent disability. Their DPA is a 0% interest loan, deferred until sale or refinance.

• Household income at or below 80% of county median
• First-time buyer (3-year lookback)
• Some funds reserved for households where a member has a permanent disability
• 0% interest, deferred loan

Contact: (608) 251-4446 · movin-out.org

Program 06

Urban League of Greater Madison

The Urban League of Greater Madison runs a HUD-certified Home Ownership Program that combines one-on-one buyer counseling, pre-purchase education, and access to down payment assistance funds. In early 2026, the City of Madison awarded the Urban League additional funding specifically for down payment assistance.

• HUD-certified housing counselors
• Pre-purchase classes and 1:1 readiness coaching
• Connects buyers to DPA funding tied to City of Madison programs

Contact: (608) 729-1200 · ulgm.org/home-ownership-program

By City

What's Available in Each Dane County City

Most DPA programs are statewide or county-wide. Only Madison HBAD is restricted to one city. Here's what applies where:

Madison

Every program in this guide. HBAD ($35,000) is Madison-only and is the largest single source of help. Most buyers in Madison stack HBAD with a WHEDA Advantage first mortgage and the FHLBank Chicago $10,000 grant.

Fitchburg

Fitchburg doesn't run its own DPA, but it points buyers to the statewide and county programs. Available: WHEDA Easy Close, WHEDA Capital Access, FHLBank DPP $10,000 grant, Movin' Out, Urban League counseling, and Dane County CDBG/HOME funds. See fitchburgwi.gov for the city's referral list.

Middleton

Same set of statewide and county programs as Fitchburg. WHEDA programs, FHLBank DPP, Movin' Out, and Urban League counseling all apply. Middleton has not had a dedicated city DPA program in recent years.

Sun Prairie

Sun Prairie buyers use WHEDA, FHLBank DPP, Movin' Out, and Dane County CDBG/HOME funds. With Sun Prairie's median home price below Madison's, the WHEDA Capital Access $7,500 plus the FHLBank $10,000 grant can cover most of a 5–10% down payment on a typical entry-level home.

Verona

Same statewide and county options as the other suburbs. WHEDA, FHLBank DPP, Movin' Out, and Urban League programs all apply.

Dane County (CDBG/HOME)

Dane County's Community Development Block Grant (CDBG) and HOME programs provide federal funding for lower-income buyers throughout the county outside of the City of Madison. Funds are limited and program details change year to year — see cdbg.danecounty.gov.

Stacking

Can You Combine Programs?

Yes — and most successful first-time buyers in Madison stack two or more programs in the same closing. The most common combinations:

• WHEDA + HBAD — Confirmed by multiple Madison-area loan officers. WHEDA's first mortgage layered with HBAD's deferred second is the gold-standard combination inside the City of Madison.
• WHEDA + FHLBank Chicago DPP — The $10,000 grant pairs with any WHEDA first mortgage. This is the most common stack for buyers outside the City of Madison.
• WHEDA Advantage + Easy Close + DPP — Layering the first mortgage, a WHEDA DPA second, and the FHLBank grant can cover both the full down payment and most closing costs.

Not every combination is allowed by every lender, and there are guideline overlays that vary by year. Always ask your loan officer to model two or three stack scenarios before you commit.

Eligibility

Income Limits and Credit Score Requirements

WHEDA income limits (Dane County, 2026)

• Approximately $129,800 for 1–2 person households
• Approximately $149,270 for 3+ person households
• Approximately $99,120 threshold for discounted PMI

Credit score guidelines

• WHEDA Advantage Conventional: Typically 620 minimum. Program follows Fannie Mae guidelines, so lenders evaluate the full credit picture, not just the score.
• WHEDA Advantage FHA: 640 minimum.
• Madison HBAD: No separate score requirement — you qualify through the first mortgage.
• FHLBank DPP: No separate score requirement — set by the participating lender.

Income limits and the discounted-PMI threshold are typically updated by WHEDA early each calendar year. The numbers above were verified with a Madison-area loan officer in 2026. Confirm the current year's limits with your lender or on WHEDA's program page.

Avoid

Common Mistakes I See Buyers Make

• Counting only borrower income for WHEDA. WHEDA counts the whole household — non-borrowers included. Confirm with your lender before assuming you qualify.
• Falling for "$5,000 local bank grant" claims online. Two Madison loan officers confirmed in 2026 that no separate local bank DPA grant market exists in Dane County. Lenders only access the federal, state, and city programs in this guide.
• Waiting until you're "ready" to talk to a lender. WHEDA programs have a queue. HBAD has limited annual funding. The earlier you start the lender conversation, the better your odds of layering programs.
• Skipping a homebuyer education class. Some DPA programs require it. Even where it's optional, a HUD-certified class (Urban League, etc.) often unlocks a slightly better rate or fee structure.
• Assuming HBAD covers properties anywhere in Dane County. Since May 2023, HBAD is City of Madison only.

Next Steps

How to Actually Apply

You don't apply to most of these programs directly. Your lender does the layering. The order that works for most Madison-area first-time buyers:

• 1. Find a lender who knows WHEDA, HBAD, and FHLBank DPP. Ask each lender: "How many WHEDA-plus-HBAD closings did you do last year?" Lenders who don't know the answer are not the right lender.
• 2. Get pre-approved. Bring 2 years of tax returns, recent pay stubs, bank statements, and a written list of all household members and their income — including non-borrowers.
• 3. Confirm which programs you qualify for. The lender models WHEDA income, checks HBAD eligibility if you're in Madison, and confirms FHLBank DPP funding status.
• 4. Complete homebuyer education if required. Urban League of Greater Madison runs HUD-certified classes online and in-person.
• 5. Make an offer with confidence. Pre-approval letter, DPA layering plan, and a clear closing timeline make Madison-area sellers take you seriously.

FAQ

Frequently Asked Questions

What down payment assistance programs are available in Madison, WI?

The biggest ones are City of Madison HBAD (up to $35,000), WHEDA Easy Close (up to 6%), WHEDA Capital Access ($7,500), and the FHLBank Chicago Downpayment Plus grant (up to $10,000). Movin' Out and the Urban League of Greater Madison also provide DPA in specific situations.

How much down payment assistance can I realistically get?

In Madison: $15,000–$45,000 total is realistic by stacking HBAD with WHEDA and FHLBank DPP. Outside Madison: $15,000–$25,000 by combining WHEDA programs with FHLBank DPP. Exact amounts depend on your income tier, household size, and which programs are currently funded.

Do I have to pay back down payment assistance?

It varies. WHEDA Easy Close is a 10-year second mortgage with monthly payments. WHEDA Capital Access and HBAD are deferred — no payments until you sell, refinance, or move out. FHLBank DPP is forgiven after 5 years of owner-occupancy.

Do I have to be a first-time buyer for WHEDA?

Not for WHEDA Advantage Conventional or FHA — those are open to repeat buyers. Madison HBAD and several other DPA programs do require first-time-buyer status (no homeownership in the last 3 years).