South Roxana, IL USDA Loans VS FHA Loans

South Roxana, IL USDA Home Loans vs South Roxana, 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 South Roxana, 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.

South Roxana, IL USDA Home Loans

1. What it is: The South Roxana, 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.

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

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

We service the following areas for FHA and USDA loans.

Learn more about South Roxana, Illinois

South Roxana, incorporated in March 1967, is a village in Madison County, Illinois, United States. The population was 1,891 at the 2020 census.

South Roxana is bordered to the north and east by the village of Roxana, to the south by a western extension of the city of Edwardsville, and to the west by the village of Hartford.

Illinois Route 111 runs along the western edge of South Roxana, leading north 2 miles (3 km) to Wood River and south 6 miles (10 km) to Pontoon Beach. Downtown St. Louis is 20 miles (32 km) to the south-southwest. Illinois Route 255, a four-lane expressway, passes just east of the village limits, with access from Exits 3 and 5. Route 255 leads south 4 miles (6 km) to Interstates 255 and 270 and north 6 miles (10 km) to Bethalto.

According to the U.S. Census Bureau, South Roxana has a total area of 2.3 square miles (6.0 km2), of which 0.1 square miles (0.3 km2), or 4.51%, are water.

At the 2000 census there were 1,888 people, 707 households, and 518 families living in the village. The population density was 1,190.0 inhabitants per square mile (459.5/km2). There were 809 housing units at an average density of 509.9 per square mile (196.9/km2). The racial makeup of the village was 97.67% White, 0.32% African American, 0.42% Native American, 0.21% Asian, 0.11% Pacific Islander, 0.32% from other races, and 0.95% from two or more races. Hispanic or Latino of any race were 0.85%.