Oak Forest, IL USDA Loans VS FHA Loans

Oak Forest, IL USDA Home Loans vs Oak Forest, 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 Oak Forest, 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.

Oak Forest, IL USDA Home Loans

1. What it is: The Oak Forest, 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.

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

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

We service the following areas for FHA and USDA loans.

Learn more about Oak Forest, Illinois

Oak Forest is a city in Cook County, Illinois, United States. The city is out 24 miles (39 km) south-southwest of downtown Chicago in Bremen Township. Per the 2020 census, the population was 27,478.

Human habitation in Oak Forest began during the early Holocene. This is made evident by the remains of hunting camps on what would become the grounds of the city’s hospital. Several millennia later, the final known indigenous settlement in Oak Forest, a Potawatomi longhouse village, was established nearby. However, it was abandoned by the 1620s.

The origins of present-day Oak Forest begins with a railroad whistle stop on the Chicago, Rock Island and Pacific Railroad 1 block south of the intersection of 167th street and Central Avenue which primarily served area dairy farmers. This stop was located in a largely forested area of what was previously known as the Cooper’s Grove Stand of Timber. By the 1880s this particular area of timber was being referred to as the “Oak Forest” due to its abundance of oak trees. A section of the former “Cooper’s Grove Road” paralleling the railroad track from 66th Court to 167th Street in Tinley Park became known as “Oak Forest Avenue,” because it was the road from the Village of Bremen/New Bremen (now Tinley Park) that lead to this “Oak Forest.”

In 1907, Cook County approved construction of a second county poor farm and infirmary on a site generally at the southeast corner of 159th Street and Cicero Avenue to address overcrowding conditions at the County Poor Farm in Dunning on the northwest side of Chicago. This location was very near the Rock Island railroad and a new railroad station was constructed northwest of the present day intersection of 159th Street (US Route 6) and Cicero Avenue (Illinois Route 50), which provided convenient rail access to the facility. A railroad spur off of the Rock Island railroad line was also constructed onto the Oak Forest Hospital site that was used for both delivery of materials during its construction and delivery of coal for its heating plant and other goods used at the facility for many years. The Oak Forest Infirmary opened in 1910. Shortly after its opening, the facility accommodated close to 2,000 people suffering from poverty, mental illness, alcoholism, and other problems. The residents of the Infirmary helped maintain farmlands at and around the facility. By 1932, the Infirmary was serving more than 4,000 patients, including over 500 with tuberculosis.

Over the ensuing years following the opening of the Oak Forest Infirmary, a small settlement developed near both the railroad stop and the Oak Forest Infirmary populated by both workers at the facility and relatives of individuals in the Oak Forest facility. By the 1920s there were several residential subdivisions developing near the facility. The 1940 census reflected 611 residents outside the hospital. The hospital provided other business opportunities. For example, several mortuaries/funeral homes were to be found just outside the facility.