Years of rising interest rates and housing prices have left many would-be homebuyers without options, especially first-time and low- to moderate-income buyers. The Wisconsin REALTORS® Association reports that home prices in the state are continuing to climb — the August 2024 median price was up 8% from the same month in 2023 — and that means affordable options can be few and far between.
REALTORS® provide a powerful resource to help clients who are struggling with these challenges. Through membership in the Federal Home Loan Bank of Chicago (FHLBank Chicago), many of the local lenders Wisconsin REALTORS® know and trust provide programs that can shrink obstacles and help guide buyers on the path to successful homeownership like Downpayment Plus® (DPP®) and the Community First® Housing Counseling Resource Program (HCRP). By connecting homebuyers with community lenders who offer these resources, REALTORS® can give buyers the boost they need to bring their dreams of homeownership back within reach.
Help with down payment and closing costs
For many prospective buyers, the upfront costs of purchasing a home can be prohibitive. Fortunately, through the Downpayment Plus program, participating lenders who are members of FHLBank Chicago can provide their income-eligible borrowers with up to $10,000 to cover down payment and closing costs.
The funds come in the form of grants that are forgiven over the course of a five-year retention period, and the lender takes care of the application process. Buyers are responsible for supplying necessary documentation of their purchase and income eligibility, contributing at least $1,000 to the purchase transaction, and completing pre-purchase homebuyer education and counseling with an approved provider. In the first half of 2024, FHLBank Chicago members have already disbursed over $5 million in DPP grants to assist more than 500 Wisconsin households. And since the program was first started in 1994, it has allocated more than $200 million in DPP grants, benefiting over 40,000 homebuyers across Wisconsin and Illinois.
Best of all, DPP grants can be stacked with other sources of down payment assistance, such as WHEDA Advantage and other programs offered by the Wisconsin Housing and Economic Development Authority. Like DPP, these programs are open to both first-time and repeat homebuyers.
Improved access to homebuyer education and counseling
A home is one of the largest purchases an individual may ever make. The process of buying a home, as well as the financial commitment and responsibilities of homeownership, can feel both mysterious and overwhelming — particularly for first-time buyers. Quality homebuyer education and counseling can equip buyers with the information they need to understand the process, make the best decisions for themselves and their families, work through credit issues, pay down debt, and establish a budget so their REALTOR® can help them find a home that meets their needs. Through the HCRP, FHLBank Chicago has partnered with WHEDA to provide grants to HUD-certified housing counseling agencies. With the funds, FHLBank Chicago and WHEDA aim to increase access to these essential services and set up buyers — especially minority and low- to moderate-income buyers — for long-term, sustainable success as homeowners.
In 2023, the HCRP provided $2 million in funding to 30 agencies across Wisconsin and Illinois, contributing to homeownership or counseling services for more than 27,000 households and helping more than 2,000 buyers purchase a home. “WHEDA and FHLBank Chicago understand that the more we work together in support of our partner organizations across Wisconsin, the more we can raise hope for homeownership, particularly within communities of color and other underserved populations,” said WHEDA Executive Director and CEO Elmer Moore, Jr. “Not everyone has a family history of homeownership to draw on. By fostering relationships with trusted counselors, we can help buyers navigate the jargon and complexity of homebuying and mortgage lending to find new possibilities for themselves and their families.”
Making homeownership a reality
REALTORS® understand the importance of homeownership as a source of comfort, stability and self-determination for individuals and families, as well as the opportunities it provides to build financial resources that can be passed down across generations. With the help of DPP and access to quality education and counseling, homebuyers like Ashley Hoppe have the chance to enjoy these benefits. On her birthday in 2022, Hoppe received the gift of homeownership when she closed on a house in Neillsville, Wisconsin, using a DPP grant provided through a local FHLBank member, Simplicity Credit Union. Today, Hoppe enjoys watching the world from the backyard of her country home, together with her three daughters and the family dogs.
“It was an exciting experience to purchase our home, and everyone at Simplicity Credit Union was so friendly and helpful,” said Hoppe. “We love sitting in our backyard and seeing local wildlife like deer and their baby fawns. Thank you from the bottom of my heart to Simplicity and FHLBank Chicago for going above and beyond and playing a big part to help this dream come true, giving my kids a place to call their own!”
REALTORS® can open more doors
Why don’t more prospective buyers take advantage of these programs? Unfortunately, many are unaware of the benefits and availability of homebuyer education and counseling, and most don’t know about down payment assistance programs like DPP. By raising awareness and pointing clients to lenders who offer these resources, REALTORS® can open doors to homeownership that clients never knew existed. To find FHLBank Chicago members in your area, visit fhlbc.com/membership/wisconsin-members.
