Hazel Crest, IL USDA Loans VS FHA Loans

Hazel Crest, IL USDA Home Loans vs Hazel Crest, 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 Hazel Crest, 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.

Hazel Crest, IL USDA Home Loans

1. What it is: The Hazel Crest, 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.

Hazel Crest, 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 Hazel Crest 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 Hazel Crest, 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 Hazel Crest, 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 Hazel Crest, IL  have income caps which could rule out higher earners, while FHA loans in Hazel Crest do not.

To make the best decision, consider speaking with a mortgage professional who can provide advice tailored to your situation. Both Hazel Crest, 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 Hazel Crest, IL USDA and FHA loan options? Call today (888)416-4805.

We service the following areas for FHA and USDA loans.

Learn more about Hazel Crest, Illinois

Hazel Crest is a village in Cook County, Illinois, United States. The population was 13,382 at the 2020 census.

Hazel Crest was first settled in 1870 in a farming community known as South Harvey. An enterprising newspaper editor named William McClintock moved here from Ohio in 1890, buying 80 acres (320,000 m2) from farmer Fred Puhrman, McClintock named the town South Harvey, and the town would receive its modern name in 1895, after a referendum.

McClintock built a depot for a local milk train and subsequently opened transportation opportunities to Chicago and beyond. The depot also served as the area’s first real estate office, public meeting place, Sunday school, day school, and post office.

In 1900, the name was changed to Hazel Crest to reflect the large numbers of hazelnut bushes that grew on a rise of land just south of town. At the time, the southern border was 175th Street and the western edge of the village was Kedzie Avenue.

Hazel Crest was incorporated in 1912. Many of the families of the early residents still live in the village.