Hume, IL USDA Loans VS FHA Loans

Hume, IL USDA Home Loans vs Hume, IL FHA Home Loans: Which is Right for You?

Homeownership is a dream for many people. To make it achievable for a wider range of individuals, there are various mortgage programs available. Among the most popular are USDA Home Loans and Hume, IL FHA Home Loans. Both of these loan programs aim to assist buyers, especially those with low-to-moderate incomes, but they serve different populations and have distinct criteria. Let’s delve into the differences and similarities of these two loan types to help you decide which one might be right for you.

Hume, IL USDA Home Loans

1. What it is: The Hume, IL USDA Home Loan program is backed by the United States Department of Agriculture (USDA). It’s designed to help rural residents, especially those with lower incomes, purchase homes.

2. Eligibility:

  • Location: Homes must be located in eligible rural areas as defined by the USDA.
  • Income limits: There are maximum income limits, which vary based on the size of the household and the county in which the property is located.
  • Credit score: While the USDA doesn’t have a set credit score requirement, most lenders require at least a 640 score.

3. Benefits:

  • No down payment: USDA loans allow for 100% financing.
  • Competitive interest rates: Often lower than conventional loans.
  • Low mortgage insurance: The upfront guarantee fee can be rolled into the loan, and the annual fee is generally lower than FHA mortgage insurance.

4. Limitations:

  • Geographic restrictions: The program is limited to certain rural areas.
  • Income caps: Not suitable for those with higher incomes.

Hume, IL FHA Home Loans

1. What it is: FHA Home Loans are backed by the Federal Housing Administration (FHA). This program aims to help those with low-to-moderate incomes and Hume first-time homebuyers purchase homes.

2. Eligibility:

  • Credit score: Borrowers need a minimum credit score of 580 to qualify for the 3.5% down payment. Those with scores between 500-579 can still qualify but will need a 10% down payment.
  • Debt-to-Income Ratio (DTI): Generally, the ratio should be less than 43%, but exceptions can be made with compensating factors.
  • Mortgage Insurance: Borrowers are required to pay both an upfront and an annual mortgage insurance premium.

3. Benefits:

  • Low down payment: Requires only 3.5% down with a 580 credit score.
  • Flexible credit requirements: Suitable for those with lower credit scores.
  • Assumable mortgage: An Hume, IL FHA loan can be assumed by a future buyer, which can be a selling point in a rising interest rate environment.

4. Limitations:

  • Mortgage insurance: FHA loans come with both upfront and ongoing mortgage insurance premiums.
  • Loan limits: There are maximum loan amounts, which vary by county.

Which is Right for You?

Your decision between a USDA Home Loan and an Hume, IL FHA Home Loan will largely depend on your individual circumstances:

  • Location of Desired Property: If you’re looking at a home in a rural area, the USDA loan might be the best fit. If you’re considering urban or suburban areas, an FHA loan may be the only option among the two.
  • Down Payment: If you don’t have a down payment, a USDA loan, with its 100% financing, can be attractive.
  • Credit Score: If you have a lower credit score, the FHA loan might be more forgiving.
  • Income: Remember that USDA loans in Hume, IL  have income caps which could rule out higher earners, while FHA loans in Hume do not.

To make the best decision, consider speaking with a mortgage professional who can provide advice tailored to your situation. Both Hume, IL  USDA and FHA loans offer opportunities for homeownership, but the right one for you will depend on your personal and financial circumstances.

Questions about the Hume, IL USDA and FHA loan options? Call today (888)416-4805.

We service the following areas for FHA and USDA loans.

Learn more about Hume, Illinois

Hume is a village in Shiloh and Young America townships, Edgar County, Illinois, United States. As of the 2020 census, the village population was 325.

The future site of Hume was most likely part of the Illinois Confederation in the Pre-Columbian period. White settlers of the 19th century in the area reported relationships with Kickapoo peoples.

In the early 19th century, the area of Illinois including the future site of the Village of Hume and the Young America Township was prairie and thus considered unsuitable for settlement or tillage. Land speculators bought local land from the government (known as “entering land”) on the hope that it would become possible to cultivate it in the near future. Large herds of cattle often grazed on the open land during this period.

In 1857, the Indiana and Illinois Airline railroad was laid out and graded, although it would be fifteen years before rails were laid. In February 1865, Elzephan W. S. Hume moved to Illinois from Boone County, Kentucky, and purchased about 300 acres (1.2 km2) of land along the proposed line of the Indiana and Illinois Airline railroad. By November, he opened a farm and began cultivation. In the spring of 1873, the railroad was complete through Edgar county. In later years, the railroad was expanded to Indianapolis and was called the Indianapolis, Decatur and Springfield Railway. The railroad would change names several times before being incorporated into the Baltimore and Ohio Railroad.

In 1873, E. W. S. Hume made plans for a town on his land, although no buildings existed on the planned town at that time. He also made an agreement with the railroad company to build a station for Hume, in exchange for lots of land in the new village. The names Elzephan W. S. Hume, Henry C. Moore, Thomas H. McCoughty, and H. B. Hammond appear on the original plat for the incorporation of Hume. George W. Foreman laid out the village of Hume in early November 1873 for those four men.