Glen Ellyn, IL USDA Home Loans vs Glen Ellyn, 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 Glen Ellyn, 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.
Glen Ellyn, IL USDA Home Loans
1. What it is: The Glen Ellyn, 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.
Glen Ellyn, 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 Glen Ellyn 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 Glen Ellyn, 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 Glen Ellyn, 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 Glen Ellyn, IL have income caps which could rule out higher earners, while FHA loans in Glen Ellyn do not.
To make the best decision, consider speaking with a mortgage professional who can provide advice tailored to your situation. Both Glen Ellyn, 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 Glen Ellyn, IL USDA and FHA loan options? Call today (888)416-4805.
We service the following areas for FHA and USDA loans.
Learn more about Glen Ellyn, Illinois
Glen Ellyn is a village in DuPage County, Illinois, United States. A suburb located 24 miles (39 km) due west of downtown Chicago, the village has a population of 28,846 as of the 2020 Census. Glen Ellyn, like the neighboring town to the east, Lombard, had its genesis in an 1833 claim by two brothers from the Finger Lakes region of New York, Morgan and Ralph Babcock. The two claimed property in a large stand of timber near present-day St. Charles Road and the East Branch of the DuPage River. The brothers also arranged for a claim for their New York neighbor Deacon Winslow Churchill, who arrived in 1834 along with some of his adult children and their families. The nascent settlement became known as Babcock’s Grove, and it included property currently part of both Glen Ellyn and Lombard. Up the trail from the river to the west was a five-cornered intersection. In 1835, Daniel Fish built a cabin there, and other settlers followed. By the 1840s the intersection was called Fish’s Corners and held a general store, blacksmith’s forge, shops selling or repairing wagons and harnesses, and a Baptist church. Moses Stacy, a soldier in the War of 1812, arrived in 1835 and built a house south of Fish’s Corners. In 1846, Stacy built at the five corners an inn, Stacy’s Tavern, to serve as a halfway stop between Chicago and the Fox River Valley and a probable stop for Galena, Illinois stagecoaches on their way to Rockford, Illinois. Stacy’s Tavern, now a historical monument, stands at what is now the intersection of Geneva Road and Main Street. In 1849, construction of the Galena and Chicago Union Railroad through Glen Ellyn was finished. The railroad was about a mile south of the corners. At first, trains running through the town on the railway did not stop there. A local landowner, Lewey Quitterfield Newton, made an offer to the railroad company: Newton would provide land for a right-of-way and build a depot and water tank if the railroad would require trains to stop there. The depot that Newton built became known as Newton Station, and the locus of the community shifted to the area around the station.