WHEDA Loan Requirements, Eligibility, Income Limits

WHEDA requires home buyers to meet certain eligibility requirements above and beyond normal underwriting guidelines and rules, we call these Wheda Loan requirements. The requirements and rules below apply to WHEDA Advantage program which WHEDA offers to first time home buyers looking to purchase an owner-occupied home in Wisconsin. To find out more about Wheda Loans, check out our What is a Wheda loan? page. But now, onto the rules.

Rule #1: The home being purchased must be located in Wisconsin

This is fairly obvious, but worth mentioning. The address of your new home must reside within Wisconsin’s geographical limits. WHEDA would also like your new home to be within 50 miles of your work address.

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Rule #2: Wheda Income Limits 2016

Yes, Wheda has income limits for qualification. Your Total Household income must be below WHEDA’s maximum income limits, but high enough to support your monthly debts. Wheda has two different income limits depending if you are a first time home buyer or not. If you are a first time home buyer, you’ll be bound by the most restrictive income limits. A First Time Home Buyer is someone who has not owned a property in the last 3 years. The income limits for the First Time Home Buyer is more restrictive because Wheda offers their best Rates to First Time Home Buyers.

Wheda First Time Home Buyer and MCC Loan Limits 2016


Income Limits for All other Wheda Borrowers

However, if you are not a first time home buyer you have less restrictive income limits. These are the less restrictive income limits.

But there is more to the income story. The combined gross annual income of all adults intending to occupy the property cannot exceed the WHEDA’s Income limit. It’s important to note that this is the total income of the occupants of the house and not applicants on the loan. Every occupants’s income will be counted in the grand total of income. For example,  if someone aged 18+ lives with you, but isn’t applying for the loan, their income will still be counted in the grand income total. This grand total will be compared against WHEDA’s maximum income limits to determine if your income qualifies. This type of income calculation is known as Compliance Income.

On the other side of the coin, your Qualifying Income must be high enough to support your monthly debts. Qualifying income has many rules to determine what’s counted and it’s often easiest to enlist one of Accunet’s licensed loan consultant’s help you calculate your qualifying income compared against your debts. Just know that your income cannot be too high, but also not too low.

Rule #3: Home Buyer Education and Counseling prior to Closing

WHEDA requires home buyer education to be completed prior to closing on your new home. Home buyer education can be completed online and we will provide you with all the information for that when appropriate. It used to be the case that if your downpayment is less than 3% down, in-person education will be required, but as of January 2016, that is no longer the case.

Home buyer education will need to be completed after your interest rate is locked with WHEDA, but prior to closing. At the appropriate time, Accunet Mortgage will provide you with resources to obtain home buyer education. Since WHEDA only accepts completion certificates from WHEDA approved home buyer educators it’s important to get educated from approved sources.

Rule #4: Home must become your primary residence

You must move into your new home and occupy it as your primary residence.

Rule #5: To qualify for the best rates, you must be a first time home buyer

A first time home buyer is someone who has not had an ownership interest in a principal place of residence in the last three years. If you have had ownership in a home in the last 3 years, you will not be eligible for the WHEDA Advantage program.

Final Considerations

While these rules are specific to qualifying for the WHEDA Advantage program, it’s important to note that all other underwriting guidelines still apply. To help you get a better understanding of your situation, it’s important to obtain a pre-approval letter prior to writing an offer on a home. Accunet Mortgage is here to help you explore all your financing options while working to uncover any pitfalls that may occur down the road.