Orland Park, IL USDA Loans VS FHA Loans

Orland Park, IL USDA Home Loans vs Orland 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 Orland 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.

Orland Park, IL USDA Home Loans

1. What it is: The Orland 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.

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

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

Orland Park is a village in Cook County, Illinois, United States, with a small portion in Will County. The village is a suburb of Chicago. Per the 2020 census, Orland Park had a population of 58,703.

Located 25 miles (40 km) southwest of Chicago, Orland Park is close to several interstate highways, with the I-80 east-west coast connector as its southern border. The Metra commuter rail system links it to the Chicago Loop and from there to O’Hare and Midway airports.

Orland Park was first settled as “Orland” in 1834, with Henry Taylor being the area’s first settler. Other original settlers include Ichabod and William Myrick, Jacob and Bernard Hostert, Thomas Cooper and John Humphrey. The Hostert brothers built log cabins for their families, which became some of the first homes built in Orland Park. In 1879 the railroad was extended to Orland Park, leading way for the towns first train station, “Sedgwick Station.” This development took the town from an agrarian society to a commercial hub that provides shipping services to local farms. The village was incorporated on May 31, 1892.

Orland Park’s growth since the mid-20th century has been largely driven by waves of white flight from Chicago’s South Side and inner-ring suburbs. Orland Square Mall opened in 1976.

According to the 2021 census gazetteer files, Orland Park has a total area of 22.31 square miles (57.78 km2), of which 22.03 square miles (57.06 km2) (or 98.72%) is land and 0.29 square miles (0.75 km2) (or 1.28%) is water.