Wisconsin's condition report now warns buyers about resale-price covenants
Wisconsin's condition report now warns buyers about resale-price covenants
2026-09-21 · Wisconsin · Legislation
Wisconsin has a species of restrictive covenant most people have never heard of: a recorded, land-running restriction imposed as a condition of state housing finance, keeping a home owner-occupied for ten years and capping what it can be resold for. As of this year, the seller-disclosure form every Wisconsin residential seller fills out warns buyers about exactly that.
2025 Wisconsin Act 237 began as 2025 Assembly Bill 194, with Senate companion SB 180. The act's own cover states a date of enactment of April 8, 2026 and a date of publication of April 9, 2026.1
It has been reported almost everywhere as a Wisconsin Housing and Economic Development Authority loan-programme tweak. Its own relating clause says more: “relating to: modifications to housing programs under the Wisconsin Housing and Economic Development Authority and disclosure of restrictive covenants and deed restrictions.”
The new disclosure question
Sections 49 and 50 of the act amend the two statutory condition-report forms — § 709.03 (form) item F7, and § 709.033 (form) item E7, which is the condominium-specific report. Both now read:
“Are you aware of restrictive covenants or deed restrictions on the property? A restrictive covenant or deed restriction may include a provision that imposes resale price limits, occupancy requirements, or other restrictions for a specific period of time (e.g., a development that received Infrastructure Access or Vacancy-to-Vitality funds from the Wisconsin Housing and Economic Development Authority (WHEDA). For more information, visit https://www.wheda.com.).”
Wisconsin's condition report has long asked whether a seller is aware of restrictive covenants. It now explains what one might do, and names a state agency and a URL.
Sellers who already furnished a report are not required to redo it. Section 51(1) provides that “[n]otwithstanding s. 709.035, the treatment of ss. 709.03 (form) F7. and 709.033 (form) E7. does not require a property owner that has furnished to a prospective buyer of the property an original or amended report before the effective date of this subsection to submit an amended report.”
The covenant the question is pointing at
Wisconsin's workforce- and senior-housing loan programmes impose two recorded restrictions on owner-occupied housing built with a WHEDA loan. Both run with the land.
The occupancy restriction, § 234.66(4)(g)1.b., requires that housing built in connection with the loan “shall remain workforce housing or senior housing, as applicable, for a period commencing on the date of the loan and concluding 10 years following initial occupancy…, except that residential housing constructed in connection with the loan that is intended to be owner-occupied is not required to remain workforce housing or senior housing, as applicable, if the residential housing is sold after the sale to the initial owner-occupier. This restriction shall be recorded against the residential property with the applicable register of deeds and shall run with the land.”2
The price cap, § 234.66(4)(g)1.d., as the statutes now read:
“With respect to each loan under this subsection for workforce housing or senior housing intended to be owner-occupied, for a period of 10 years beginning on the date the developer closes on the sale of the housing to the initial owner-occupier, the housing shall remain owner-occupied and may not be sold for a price greater than the original purchase price paid by the initial owner-occupier, increased by no more than 5 percent per year, compounded annually. These restrictions shall be recorded against the residential property with the applicable register of deeds and shall run with the land.”
And an escape valve at subd. 2: any restriction recorded under subd. 1 “shall terminate on the date the property is acquired by foreclosure, or by an instrument in lieu of foreclosure, unless the authority determines that the acquisition is part of an arrangement a purpose of which is to terminate the restriction.”
What Act 237 actually changed in that cap
This is the part the loan-tweak framing misses. Before Act 237, the escalator was an agency-administered index: the price could be adjusted annually by the average compounded annual increase in the sale price of all residential housing in the county, as determined by the authority — and WHEDA was required to publish the acceptable sales price range for the property on its website for the ten-year period.
Act 237 struck all of that and replaced it with a flat ceiling: “increased by no more than 5 percent per year, compounded annually.” The website-publication requirement went with it.
So Wisconsin moved from a county-indexed, state-published resale price to a fixed arithmetic one that any owner can calculate without asking an agency. In a county where housing appreciates faster than 5 percent a year, the new cap binds harder than the old one did; in a slower county, it binds less.
The loan changes that came with it
The reported half is real. Section 234.66(4)(c)2 raises the ceiling on a loan from 20 to 33 percent of total development cost including land purchase, and § 234.66(5)(c) raises another from 10 to 25 percent. “Developer” is redefined to include a tribal housing authority or a business entity created by a tribal council. A new eligibility condition ties a loan to whether the governmental unit has updated the housing element of its comprehensive plan under § 66.1001(2)(b) within the preceding five years.
Loosening the programmes enlarges the pipeline of Wisconsin housing carrying the recorded restrictions above.
Why it lands inside associations
A Wisconsin association whose members include WHEDA-financed workforce or senior units has owners subject to a recorded governmental restriction sitting on top of the declaration — one limiting occupancy and constraining resale price for a decade. The two instruments are separate, with separate enforcement, and the association is not a party to the second.
A companion act adds a second disclosure of the same family. 2025 Wisconsin Act 120, enacted March 27, 2026, created § 709.03 (form) E3m and § 709.033 (form) D2m, each reading “Are you aware of an existing neighborhood improvement special assessment?” Those take effect October 1, 2026, and they point at a municipal special assessment that can now fund a subdivision's roads and utilities on the tax roll alongside association dues.3
Our Wisconsin estoppel and resale page covers what a Wisconsin buyer is told before closing, and governing statute covers how recorded restrictions bind.
The effective-date oddity, unresolved
Section 53 of the act provides that it “takes effect on the day after publication, except as follows: (1) The treatment of ss. 709.03 (form) F7. and 709.033 (form) E7. and SECTIONS 51 (1) and 52 (2) of this act take effect on January 1, 2026.”
The act was published April 9, 2026. The stated effective date for the form changes had therefore already passed when the act was published. How that is applied in practice is not answered by the act's own text, and no agency guidance resolving it has been published.
What to watch next
WHEDA's spring 2026 competitive cycle opened May 6, 2026 with submissions due June 19, 2026 and awards expected in July, so the first units carrying the amended restriction are arriving now. Whether the flat 5 percent escalator produces resale disputes that the old county index would have avoided is the question this change sets up, and there is no Wisconsin case law on either version.
Related Wisconsin HOA Topics
Stay on top of Wisconsin HOA law
Every week: new Wisconsin legislation, court rulings, and regulatory developments affecting condos, planned communities, and property managers. Free.
No spam. Unsubscribe anytime.