Calumet City, IL USDA Eligibility

USDA Eligibility Guide

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Calumet City, IL USDA Loan Eligibility Guide

A USDA (United States Department of Agriculture) mortgage, also known as a Calumet City, IL USDA Rural Development Loan, is designed to assist low-to-moderate-income households in purchasing homes in eligible rural and some suburban areas. Here are the general eligibility requirements:

1. Property Eligibility:

    • The home must be located in a USDA-eligible rural or suburban area around Calumet City, IL. The USDA provides an online tool to help potential borrowers determine if a specific property is in an eligible area.
    • The property must be used as the borrower’s primary residence.
    • The home must meet all local codes and program regulations.

2. Applicant/Household Eligibility:

    • U.S. citizenship or permanent residency is required.
    • The borrower must be unable to obtain a loan from other resources on terms and conditions that can reasonably be expected to meet.
    • The applicant must have a stable and dependable income, typically verified by two years of consistent employment. The income must also be sufficient to cover the mortgage payment, including taxes and insurance.
    • The household’s adjusted income must be at or below the applicable low-to-moderate income limit for the area.
    • A reasonable credit history. While a specific credit score is not mandated, a credit score of 640 or higher is typically required for streamlined processing. However, those with lower scores may still be eligible but may undergo a more stringent evaluation.

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    3. Income Limits:

    • Income limits vary by county and household size. You’ll need to check with our Calumet City, IL USDA service center or the USDA’s online tools to see specific limits.

    4. Loan and Debt Ratios:

    • Typically, a 29/41 ratio is followed. This means that 29% or less of your monthly income can go towards your mortgage (Principal, Interest, Taxes, and Insurance) and 41% or less of your monthly income can go towards your total debt (this includes the mortgage and other debt obligations). Exceptions can be made in certain circumstances.

    5. Other Requirements:

    • Borrowers must personally occupy the dwelling as their primary residence.
    • The borrower must be legally able to take on the loan obligation.
    • First-time homebuyers are required to take a homeowner counseling class in some situations.

    6. Loan Terms:

    • The loan term is typically 30 years.
    • No down payment is usually required.
    • The interest rate can be set by the lender but is subject to USDA review.

    7. Guarantee Fee and Annual Fee:

      • The USDA charges an upfront guarantee fee, which can be rolled into the loan amount.
      • There’s also an annual fee, which is a percentage of the remaining principal amount, typically spread out in monthly installments.

    It’s crucial to remember that while these are the general requirements for Calumet City, IL USDA mortgages, eligibility details can change. It’s always a good idea to consult with one of our Calumet City, IL USDA home loan professionals. Get pre-approved with our easy and stress free Calumet City, IL USDA home mortgage today.

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    More About Calumet City, Illinois

    Calumet City (/ˌkæljʊˈmɛt/ KAL-yuu-MET) is a city in Cook County, Illinois, United States. The population was 36,033 at the 2020 census, a decline of 2.7% from 37,042 in 2010. The ZIP code is 60409.

    The word Calumet is the Miꞌkmaq and French word for a Ceremonial pipe as used by Native Americans.

    Calumet City (commonly referred to locally as “Cal City”) was founded in 1893 when the villages of Schrumville and Sobieski Park merged under the name of West Hammond, since it lies on the west side of the Illinois-Indiana line from Hammond, Indiana.

    In 1916, when alcohol was prohibited in Indiana, West Hammond became a preferred location for drinkers coming from northwest Indiana. Bootleggers including Al Capone built on this basis once the Prohibition era arrived, and West Hammond gained the nickname of “Sin City”. The city became known for illegal alcohol consumption, gambling, and prostitution. In 1923, residents wishing to rid the city of its reputation voted to change the name from West Hammond to Calumet City.

    Frank LaPorte is believed to have been the member of the Chicago Outfit who was most responsible for developing and maintaining the “Sin Strip” area of Calumet City. Police avoided Sin Strip and risked violence if they tried to make an arrest. In 1959, the state of Illinois conducted a police raid that resulted in 98 arrests and the seizure of business records. An article published in Chicago Daily News on June 2, 1959, exposed LaPorte as being instrumental in the illegal activities in Calumet City.