Hickory Hills, IL USDA Loans VS FHA Loans

Hickory Hills, IL USDA Home Loans vs Hickory Hills, 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 Hickory Hills, 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.

Hickory Hills, IL USDA Home Loans

1. What it is: The Hickory Hills, 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.

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

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

We service the following areas for FHA and USDA loans.

Learn more about Hickory Hills, Illinois

Hickory Hills is a city in Cook County, Illinois. Located principally in Palos Township, it is a suburb of Chicago. The population in 2020 was 14,505.

The Hickory Hills Country Club was founded in 1917 in the area of the present-day city, with an 18-hole golf course designed by Scottish-American golfer James Foulis. The club exists to the present day.

The village of Hickory Hills was incorporated in September 1951 from the territory between 91st to 95th streets, and between 80th to 88th avenue. The village at the time of incorporation had around 450 residents. Voters approved a change from village to city form of government in October 1966.

In 1961, the Poor Clares nuns, a branch of the Franciscan order, acquired 20 acres of land at 89th street and Keane avenue with which to establish a new monastery. However, the monastery closed in 1992 due to dwindling numbers. The order returned to Chicago in 1999, moving to a new monastery in nearby Palos Park in 2003.

Hickory Hills lies on the relatively hilly Tinley Moraine, a belt of ridges laid down about 14,000 years ago during the Wisconsin glaciation.