Oak Park, IL USDA Loans VS FHA Loans

Oak Park, IL USDA Home Loans vs Oak Park, 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 Park, 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 Park, IL USDA Home Loans

1. What it is: The Oak Park, 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 Park, 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 Park 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 Park, 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 Park, 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 Park, IL  have income caps which could rule out higher earners, while FHA loans in Oak Park do not.

To make the best decision, consider speaking with a mortgage professional who can provide advice tailored to your situation. Both Oak Park, 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 Park, 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 Park, Illinois

Oak Park is a village in Cook County, Illinois, adjacent to Chicago. It is the 26th-most populous municipality in Illinois, with a population of 54,583 as of the 2020 U.S. Census estimate. Oak Park was first settled in 1835 and later incorporated in 1902, when it separated from Cicero. It is closely tied to the smaller town of River Forest, sharing Oak Park and River Forest High School. Architect Frank Lloyd Wright and his wife settled in Oak Park in 1889, and his work heavily influenced local architecture and design, including the Frank Lloyd Wright Home and Studio. Over the years, rapid development was spurred by railroads and streetcars connecting the village to jobs in nearby Chicago. In 1968, Oak Park passed the Open Housing Ordinance, which helped devise strategies to integrate the village rather than resegregate.

Today, Oak Park remains ethnically diverse, and is known for its socially liberal politics, with 80% or higher voter turnout in every presidential election since 2000. Oak Park is closely connected to Chicago with Chicago Transit Authority access via the Green Line and Blue Line “L” train lines, as well as the Metra Oak Park station downtown.

In 1835, Joseph and Betty Kettlestrings, immigrants from Yorkshire, England, staked out a farm and built a house near Lake Street and Harlem Avenue, west of Chicago. Once their children were born, they moved to Chicago for the schools in 1843, and moved back again in 1855 to build a more substantial home a bit east on their quarter section of land. More farmers and settlers had entered the area. Their land was called by several names locally, including Oak Ridge, Harlem, and Kettlestrings Grove. When the first post office was set up, it could not use the name Oak Ridge, as another post office was using that name in Illinois, so the post office chose Oak Park, and that name became the name for the settlement as it grew, and for the town when it incorporated in 1902.

By 1850, the Galena and Chicago Union Railroad (after that, the Chicago & Northwestern and now Union Pacific) was constructed as far as Elgin, Illinois, and passed through the settlement area. In the 1850s the land on which Oak Park sits was part of the new Chicago suburb, the town of Cicero. The population of the area boomed during the 1870s, with Chicago residents resettling in Cicero following the Great Chicago Fire of 1871 and the expansion of railroads and streetcars to the area. “In 1872, when Oak Park received its own railroad depot on the Chicago and Northwestern Railway, its rapid emergence as a residential suburb of Chicago began. In 1877, the railroad was running thirty-nine trains daily between Oak Park and Chicago; in the subsequent year, more railroads and streetcar lines, with increased service, came to link Oak Park and Chicago. As Chicago grew from a regional center to a national metropolis Oak Park expanded – from 500 residents in 1872 to 1,812 in 1890, to 9,353 in 1900, to 20,911 in 1910, to 39,585 in 1920. Oak Park thus emerged as a leading Chicago suburb.”

A review of Oak Park’s history by Wiss, Janny, Elstner Associates in 2006 further explains the importance of railroads and streetcars in the development of Oak Park: