Home ownership has proven to be one of the most reliable means of self-sufficiency for American families. According to the City Assessor's Office, the average assessed value of a single-family home in Madison has increased 264% from 1992 to 2006. A house valued at $55,000 in 1992 was worth over $145,000 in 2006.
The Urban League's innovative program model creates a unique opportunity for low-income families to acquire substantial home equity. Nearly 50 families are currently working to acquire more than $7 million in real estate.
Coming up on its fifteenth anniversary, the Urban League's award-winning Single Family Home Ownership Program helps larger, low-income families work toward economic self-sufficiency through home ownership. This innovative program provides single-family housing with affordable rents and an option to purchase at the end of the program. Houses are purchased in various Madison neighborhoods, improved, and leased to qualifying families at less than market value. Participating families receive training and counseling. At the end of the program families may purchase the house at an affordable price with no down payment. All appreciation in value and mortgage reduction benefits are passed directly to the participating family.
The Urban League is excited to offer this wonderful 3 bedroom/1 bathroom home on Madison’s North Side, (4305 School Rd). Freshly painted with brand new carpeting/flooring throughout this home would be perfect for a family to enjoy living in a quiet neighborhood close to shopping, bus lines and schools. This home has a new furnace, AC, water heater, water softener and stove. A very spacious backyard and one car garage add to the value of this home. This lovely home is move in ready! Please contact Vickie Wright at 608.729.1221 or firstname.lastname@example.org for more details about the application process.
Frequently Asked Questions About the Single Family Home Ownership Program
Does our family qualify?
Your income, past rental, credit and behavior history will be verified as part of the application process. If your family meets the eligibility criteria, you will have the opportunity to view and inspect homes that are available and choose one that fits the needs of your family. If no homes are currently available, your name will be placed on a waiting and you will be contacted once something becomes available. If you are not eligible for the program, we will send you a letter stating the reason. You may be eligible to apply again once you meet the requirements that you were denied for.
What are the benefits to my participation in the Single Family Homeownership Program?Lower than market rent
- INCOME REQUIREMENTS: Local and federal guidelines require that your family meet certain income requirements for eligibility. The Urban League operates multiple programs, each with their own income requirements. Income eligibility is based on area median income (AMI) levels adjusted for family size. AMI is adjusted annually. Download application for current requirements. In assessing your family’s ability to afford the housing payments we also review the ratio of monthly housing payment (rent + utilities) to the monthly family income. Typically, families should be spending 30% or less of their monthly household income for their housing payment.
- PRIOR RENTAL HISTORY: Two years verifiable residence history from a third party landlord is required. We seek applicantants whose habits and practices are not expected to have a detrimental effect on neighbors or on the property’s environment. Reasons for denial may include, but are not limited to: Insufficient information on your application; Prior eviction or record of legal notices from past landlord; Payment history reflecting unpaid past due rent, property damages not paid for, or NSF checks; Any rental history upon which previous landlord or management refuses to re-rent to applicant or; Negative behavior such as domestic battery, drug charges, or disorderly conduct.
- CREDIT HISTORY: A free credit report will be run to assess your ability to obtain financing for the eventual purchase of the home. Because the short-term program will require you to obtain financing sooner, we seek a higher credit score - minimum of 650. To be eligible for the long-term program, we look for a credit score of 580. If your score needs improvement, the Urban League or one of its partners may be able to provide you with some financial counseling after which you would be eligible to apply again.
- WILLINGNESS TO PERFORM MAINTENACE/HOME CARE: You are expected to demonstrate your ability to be a homeowner by repairing and maintaining the house in a very good, clean and well kept condition. This includes, but is not limited to, mowing the lawn, shoveling snow, raking leaves, fixing dripping faucets, cleaning gutters, etc. Your “sweat equity” keeps your monthly rent payments below market rate. We will help your family develop these skills through individual maintenance counseling and formal homeownership workshops and educational programs.
- Locked-in rental rates during the entire program period
- No down payment
- A newly remodeled home
- Mortgage equity build-up and appreciation potential
- Training and education
- Home maintenance counseling
How do my responsibilities in the program differ from those in a traditional lessor-lessee relationship?
- Keep your home in good repair.
- You are required to provide extensive information about your family prior to acceptance into the program. Much of this information is provided under penalty of perjury.
- Maintain good credit while in the program (you will be required to finance a mortgage through traditional means at the end of the program period.)
- Annual re-certification of income and assets
How is the program able to offer rents at below market rates?
The Single Family Homeownership Program has forged a variety of partnerships that subsidize this program:
- The City of Madison’s Community Development Block Grant program provides loans for the length of the rental period at zero percent interest.
- The Urban League of Greater Madison assists the Madison Community Reinvestment Associates partnership in obtaining federal tax credit through the Section 42 Program. Through the partnership, these federal tax credits are passed on to U.S. Bank annually in exchange for providing equity funds up-front for purchasing and remodeling of the home.
- Annual grants from United Way of Dane County help cover the cost of screening, certification, counseling, and training.
How long do I “rent” before taking ownership?
The Urban League operates both a short and long term lease to purchase program. Homes are designated short or long term at the time they are You will be informed of the lease period before being accepted into the program.
LONG TERM PROGRAM: Federal regulations require that the home remain a rental property for 15 years. This means that if a family occupies the home for 3 years through this program and decides to move, the next family to move into that home will only be “renters” for 12 years. Due to limited turnover in this program, most homes that become available are newly acquired (i.e. 15 years). Household income must be between 40 and 60 percent of area median income adjusted for family size. Download application for current figures.
SHORT TERM PROGRAM: The partnership occasionally makes homes available through a 1 to 5 year program. The income requirements for this program are higher - between 60 and 80 percent of area median income level. Download application for current figures.
What happens if my income changes after I am accepted in the program?
There is no penalty for an increase in your family income. However, it is absolutely critical that your family income meet the eligibility guidelines at the time that you enter the program. We are required to third-party verify your income and assets much like banks must do when families purchase a home. This includes a certification and good-faith estimate of your projected income during your first year in the program.
What happens at the end of my lease?
Ownership of the home will transfer to you at the cost of $1. You will need to obtain a loan to cover the remaining mortgage balances on the home, closing costs, and expenses in connection with your home purchase. You will follow a process as would any home-buyer including shopping around for the best rate and undergoing a thorough credit verification and check. As a first-time home-buyer, you may be eligible for special programs (such as the WHEDA program), based on your income at the end of the program period. By making your monthly rent payments and by paying other bills on time while you are in the program, you help ensure your ability to obtain a loan at a favorable interest rate.
When I take on the mortgage at the end of the program, will the monthly cost increase?
While this is extremely difficult to predict due to many variables including the interest rate environment at the end of the “rental” period, your monthly housing cost (mortgage payment, taxes, insurance) is expected to approximate the monthly rent payment during your participation in the program.
What happens if our family wants to leave the program early?
There are several things you should take into account when considering leaving the program:
1. During your rental period, you sign one-year leases, which obligate you in exactly the same way that you would be obligated to a regular landlord.
2. Unless you complete the entire rental period (up to 15 years), you receive none of the benefits of homeownership including equity buildup and appreciation.
Who makes these programs possible?
The long term program is operated by Madison Community Reinvestment Associates, a partnership that includes the Urban League of Greater Madison, Wisconsin Affordable Housing Corporation, and U.S. Bank.
The short term program is operated by the Urban League of Greater Madison and Wisconsin Affordable Housing Corporation with financing provided by Forward Community Investments.
Additional financial support is provided by the City of Madison Community Development Block Grant Program, United Way of Dane County, and the Wisconsin Housing and Economic Development Authority (WHEDA).
Who do I contact with questions?
Vicki Wright, Program Coordinator
Urban League of Greater Madison
2222 S. Park Street, Suite 200
Madison, WI 53713
(608) 338-3417 (hotline)
(608) 729-1205 (fax)
Wisconsin Affordable Housing Corp.
402 South Gammon Place, Ste. 310
Madison, WI 53719
(608) 239-8137 (mobile)
Home Ownership Program Application (PDF)
Home Ownership Program Application (Word)