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City of Madison

Common Council approves investments into affordable homeownership

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Two new twin home buildings on Great Gray Drive that were built using previous Affordable Housing Fund Homeownership RFP funding
The latest round of Affordable Homeownership funding aims to fill more vacant lots in the Owl Creek neighborhood, like these twin homes that were recently completed on Great Gray Drive.

The City of Madison Common Council approved more than $6 million of funding to support several homeownership programs and new owner-occupied homes during its February 24, 2026, meeting, continuing the City’s efforts to support more affordable homeownership opportunities for households earning less than the Area Median Income. 

The funding is the result of the Community Development Division’s 2025 Affordable Homeownership Request for Proposals (RFP), which asked for proposals for affordable owner-occupied housing developments and homeownership programs that offer assistance for down payments and closing costs, minor home repairs, or homebuyer education for income-qualified households. Twelve of the seventeen proposals received were selected for funding. 

In total, the funded proposals will help create 29 new, affordable owner-occupied homes and fund 5 homeownership service programs. The  Common Council action also authorizes the City’s Economic Development Division to make 10 vacant City-owned residential lots in the Owl Creek neighborhood available to support the creation of the new homes.

4301 Valor Way

4307 Valor Way

5109 Great Gray Dr

5117 Great Gray Dr

4314 Valor Way

4320 Valor Way

5133 Great Gray Dr

4307 Crested Owl Ln

4308 Valor Way

5109 Horned Owl Dr

Development proposals in the Owl Creek neighborhood that will receive funding in the form of loans include:

  • Up to $800,000 each for three projects by Kaba Baal Inc., the Wisconsin Partnership for Housing Development, and Anchorhaus Development, all in partnership with the Madison Area Community Land Trust. Combined, these projects will produce 12 twin homes with permanent affordability. 

  • Up to $200,000 to Tri-State Custom Construction to build an affordable single-family home  

  • Up to $190,000 to the Ho-Chunk Nation Department of Housing or an income-qualified first-time homebuyer selected by the Department to build two affordable single-family homes 

  • Up to $86,200 to Habitat for Humanity of Dane County to support the development of 2 affordable twin homes on one lot 

Additionally, the Madison Area Community Land Trust will receive loans totaling up to $2,538,050 in City-administered Federal HOME funds to support the development of 12 affordable owner-occupied townhomes within the Voit Farm Development on Madison’s east side. 

Homeownership programs that will receive grant funding include: 

  • Up to $300,000 to Project Home, Inc. to support a minor home repair program for income-qualified homeowners 
  • Up to $50,000 to Urban League of Greater Madison, Inc. to support its financial literacy and homebuyer education program for first-time homebuyers 
  • Up to $86,200 to Habitat for Humanity of Dane County to support down payment assistance to income-qualified first-time homebuyers 
  • Up to $180,000 to the Ho-Chunk Nation Department of Housing to support down payment assistance to income-qualified first-time homebuyers 
  • Up to $280,000 to Urban League of Greater Madison, Inc. to support down payment assistance to income-qualified first-time homebuyers

Funding Sources

Funding for these awards came from a combination of sources:

  • $2,970,000 City Affordable Housing Fund
  • $2,990,450 Federal HOME Investment Partnerships Program
  • $300,000 Federal Community Development Block Grants
  • $50,000 City Property Tax Levy

All of this funding is authorized in the City’s 2026 Adopted Capital and Operating budgets.

Homeownership in Madison 

The City’s goal in awarding these funds is to expand homeownership opportunities for households with more modest incomes. The 2025 Housing Snapshot report, released earlier this month, noted that Madison’s owner-occupied home vacancy rate remains well below the national average, with only one out of every 166 homes being vacant and available for purchase at any given time. That limited supply increases competition – and prices – for homes, making it increasingly difficult for first-time homebuyers to find a home in Madison. 

It’s especially difficult for households earning less than the Area Median Income ($90,900 for a single-person household, or $103,900 for a two-person household in 2025). That helps explain why only 25% of Madison’s homeowners make less than 80% of the Area Median Income, while 61% of homeowners make more than the Area Median Income.

% AMI as Annual Incomes by Houshold Size, 2025
Income Level1-Person Household2-Person Household3-Person Household4-Person Household5-Person Household
80% AMI$72,720 $83,120 $93,520 $103,840 $112,160 
Median (100% AMI)$90,900 $103,900 $116,900 $129,800 $140,200 

The 2025 Housing Snapshot also notes that while a household making 80% of the Area Median Income could have comfortably afforded a typical $275,000 Madison home a decade ago, a household earning a comparable level of income today would fall tens of thousands of dollars short of affording even the least expensive homes in the current market. 

Activities like those supported through this Affordable Homeownership RFP help increase the number of homes available and affordable to households with modest incomes who want to purchase their first home and helps put them in position to make those purchases.

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