Overview
Madison is the toughest first-time market in Wisconsin. Redfin put the city's median sale price at $439,791 in September 2026, up 4.7% from a year earlier. Every local program below is capped at 80% of Dane County's median income, which for 2026 (effective June 1) is $74,800 for one person and $106,800 for a family of four. At those incomes a detached house near the median is usually out of reach even with help, so most assisted buyers end up in condos, half-duplexes and smaller houses on the east, north and far-west sides, or they cross the city line into Sun Prairie, Fitchburg, Verona or Stoughton, which changes which program they can use.
The flagship is the City of Madison's Home-Buy the American Dream (HBAD) loan: up to $35,000 toward down payment and closing costs on a single-family home, condo or half of a duplex inside the city. It is a 0% deferred second mortgage with no monthly payment, but it is a shared-appreciation loan. When you sell, refinance for cash (other than improvements), move out or transfer title, you repay the original amount or the same percentage of the sale price the City put in, whichever is greater. You need 1% of the price from your own or gifted funds, you cannot have more than 12 months of PITI in liquid assets after closing, and your housing ratio must be at least 25% (max 38%/55%). Outside the city, Movin' Out runs Dane County's CDBG down payment loan (up to $32,000 at 0% deferred, $500 of your own funds) and a separate Madison Home loan of up to $75,000 for households that include someone with a permanent disability. Smaller grants round things out: the Urban League's Progressive UpPayment ($5,000 after its education program) and OWN It's $19,000 no-repayment grant, which has no income limit but requires two courses, a partner affiliation (One City Schools, Anesis Therapy or Centro) and a February or August lottery.
Local Programs in Madison
Home-Buy the American Dream (HBAD)
First-time buyer = no home owned in the last 3 years (exceptions: single parent with dependent child, displaced homemaker, mobile home not treated as real estate). Buyer puts 1% of price into the deal (gifts allowed); liquid assets after closing capped at 12 months of PITI (min $50) unless the household uses no traditional retirement savings; housing ratio at least 25%, max ratios 38%/55%; max 105% CLTV; first mortgage must be 30-year term with tax/insurance escrow and a rate no more than 2% above WHEDA's prevailing rate. HUD-approved homebuyer education AND a one-on-one counseling session required, certificates dated within 18 months of closing. City orders a Housing Quality Standards inspection at its expense (plus lead-based paint inspection on pre-1978 homes); failed items fixed before closing or within 60 days if escrowed. Lender submits the application; allow 20 business days; City pre-approvals valid 90 days. Can be stacked with FHLBank Chicago Downpayment Plus and WHEDA DPA but NOT with other City-funded DPA (e.g., Movin' Out Madison Home). First come, first funded; about $15.3 million lent to 1,425 households Aug 1991 to Feb 2026. Funded by WI DEHCR, HUD and the City. Contact homeloans@cityofmadison.com, 608-266-4223.
Dane County CDBG Down Payment Assistance
No disability required (the only Movin' Out program that is not disability-specific). $500 of buyer's own funds; housing ratio at least 25%, max 38%/55%; cash reserves after closing under 12 months PITI; HQS, lead-based paint and third-party inspections; homebuyer education certificate good for 12 months. Movin' Out also does the required HUD-certified education and counseling (online course $60). Amount discrepancy between the matrix ($32,000) and the City FAQ ($35,000) should be confirmed with Movin' Out at 608-251-4446 x7.
Movin' Out Madison Home
Only for households that include a family member with a permanent disability. 1% of buyer's own funds; HQS, lead and third-party inspections. Cannot be combined with Home-Buy the American Dream. Work directly with Movin' Out, which also provides the homebuyer education and counseling (certificate good for 18 months).
Progressive UpPayment Program
Must complete homebuyer education and counseling through ULGM; no buyer funds required. In February 2026 the Madison Common Council awarded ULGM up to $280,000 for down payment assistance to income-qualified first-time buyers plus $50,000 for its financial literacy/homebuyer education program (2025 Affordable Homeownership RFP). Listed on the Dane County DPA matrix maintained by the Home Buyers Round Table; confirm current terms with ULGM. The same matrix lists a $500 Home Buyers Round Table grant (limited number, no inspection) that can be added.
Own It Down Payment Grant
Grant; no repaymentFirst-time buyer = no home owned in 3 years, or a single parent with a dependent child. Must complete both the Wealth Building and Homeownership courses and be affiliated with a community partner (enrolled, alumni or employee of One City Schools; employee of Anesis Therapy or Centro of Dane County). Two application windows a year (Feb 1-15 and Aug 1-15 in 2026); lottery when applicants exceed funds; award earmarked for one year. Not compatible with FHA, VA or USDA loans; can be stacked with other DPA. Nine grants awarded in 2026 and demand outpaced funding.
Downpayment Plus (DPP)
Requires pre-purchase homebuyer education and counseling (DPP pays up to $500 toward it) and $1,000 of the buyer's own funds; cash back at closing capped at $250. 2026 funding totals $48 million for Illinois and Wisconsin ($28 million in January plus $17 million added July 28, 2026), reserved first come, first served. May be layered with federal, state or local grants/loans, including HBAD and WHEDA per the City of Madison FAQ.
Habitat for Humanity of Dane County Homeownership Program
Credit score 620+, 3 years of positive housing history, background check, down payment required if selected. Applicants must attend an informational meeting first; all current sessions are full with new dates expected in 2027. The City of Madison also awarded Habitat Dane up to $86,200 in February 2026 for down payment assistance to income-qualified first-time buyers (HOME funds), but program terms for that DPA are not published.
Stacking With Wisconsin Programs
The City of Madison's own FAQ spells out the stack: the $35,000 HBAD loan, FHLBank Chicago's $10,000 Downpayment Plus grant and a WHEDA down payment loan (Easy Close, up to 6% of price, or the $7,500 Capital Access when its limited 2026 allocation is open) can all be used on one purchase, provided the first mortgage is a WHEDA Advantage conventional or FHA loan and total CLTV stays at or under 105%. WHEDA requires its DPA to sit in second position directly behind its first mortgage and allows additional government assistance behind it (Fannie Mae Community Seconds rules for conventional, approved government DAP for FHA), so HBAD lands in third position; the City will also stack with a non-WHEDA FHA or conventional loan as long as the rate is within 2% of WHEDA's and the loan escrows. HBAD cannot be combined with other City-funded DPA such as Movin' Out's Madison Home loan, and OWN It's grant cannot be paired with FHA or VA loans.
- WHEDA Advantage (first mortgage)
- Capital Access Advantage DPA
- Easy Close Advantage DPA
- Tax Advantage MCC (Mortgage Credit Certificate)
Full details, income limits, and the federal FHA, VA, and USDA options are on the Wisconsin first-time homebuyer programs guide. When you know what you qualify for, compare the best mortgage lenders for first-time buyers and confirm the lender is approved for the program you plan to use.
Tips for First-Time Buyers in Madison
Stacking rules matter here. The City's HBAD FAQ says the $35,000 HBAD loan, the $10,000 FHLBank Chicago Downpayment Plus grant and a WHEDA down payment loan (Easy Close, up to 6% of price) can all be used together, as long as the first mortgage is a WHEDA Advantage loan. What you cannot do is combine HBAD with another City-funded program such as Movin' Out's Madison Home loan. FHA, VA and conventional first mortgages all work with HBAD as long as the loan has a 30-year term, escrows taxes and insurance, and carries a rate no more than 2% above WHEDA's prevailing rate. OWN It's grant is the exception: it is not compatible with FHA, VA or USDA loans.
Every borrower on an HBAD loan must complete HUD-approved homebuyer education plus a one-on-one counseling session, with certificates dated within 18 months of closing; the Home Buyers Round Table, the Urban League, Movin' Out and GreenPath all qualify. Apply through a lender who has closed HBAD loans before. The City can issue a 90-day pre-approval before you have a house, and once an offer is accepted it needs a minimum of 20 business days plus time for the City-ordered Housing Quality Standards inspection (and a lead inspection on pre-1978 homes), so write at least 15 days for that inspection into your offer. All Dane County down payment money is first come, first funded; HBAD has lent about $15.3 million to 1,425 households since 1991.
In a $440,000 market, $35,000 from the City plus $10,000 from DPP and a WHEDA second can get a qualifying household to closing with very little cash, but the payment on the rest still has to fit a 38% housing ratio at $106,800 or less. The shared-appreciation feature is the real cost of HBAD: cheap to carry, expensive to exit after a strong run-up, so model the payoff before you sign.
Frequently Asked Questions
Sources
- City of Madison - Down Payment Assistance for First Time Homebuyers (HBAD)
- City of Madison - HBAD Fact Sheet (0626, 2026 income limits)
- City of Madison - HBAD Frequently Asked Questions
- City of Madison - HBAD Brochure (0726)
- City of Madison - HBAD Underwriting Manual (0626)
- Home Buyers Round Table - Dane County Down Payment Assistance Programs matrix (July 15, 2026)
- City of Madison - Investing in the Future through Homeownership (HUD 2026 80% AMI, program history)
- City of Madison - Common Council approves investments into affordable homeownership (Feb 26, 2026)
- Movin' Out - Homeowners overview
- OWN It: Building Black Wealth - Grant Info and FAQs
- Habitat for Humanity of Dane County - Apply for a Home
- FHLBank Chicago - Downpayment Plus Programs
For educational purposes only -- not financial or tax advice. Program details, funding availability, income limits, and benefit amounts change, often mid-year. Verify everything with the administering agency before you apply. Median home price: Redfin, Madison WI Housing Market, median sale price September 2026 ($439,791, +4.7% YoY), https://www.redfin.com/city/12257/WI/Madison/housing-market. Last verified: October 29, 2026.