Springfield, IL USDA Eligibility

USDA Eligibility Guide

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Springfield, IL USDA Loan Eligibility Guide

A USDA (United States Department of Agriculture) mortgage, also known as a Springfield, IL USDA Rural Development Loan, is designed to assist low-to-moderate-income households in purchasing homes in eligible rural and some suburban areas. Here are the general eligibility requirements:

1. Property Eligibility:

    • The home must be located in a USDA-eligible rural or suburban area around Springfield, IL. The USDA provides an online tool to help potential borrowers determine if a specific property is in an eligible area.
    • The property must be used as the borrower’s primary residence.
    • The home must meet all local codes and program regulations.

2. Applicant/Household Eligibility:

    • U.S. citizenship or permanent residency is required.
    • The borrower must be unable to obtain a loan from other resources on terms and conditions that can reasonably be expected to meet.
    • The applicant must have a stable and dependable income, typically verified by two years of consistent employment. The income must also be sufficient to cover the mortgage payment, including taxes and insurance.
    • The household’s adjusted income must be at or below the applicable low-to-moderate income limit for the area.
    • A reasonable credit history. While a specific credit score is not mandated, a credit score of 640 or higher is typically required for streamlined processing. However, those with lower scores may still be eligible but may undergo a more stringent evaluation.

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    3. Income Limits:

    • Income limits vary by county and household size. You’ll need to check with our Springfield, IL USDA service center or the USDA’s online tools to see specific limits.

    4. Loan and Debt Ratios:

    • Typically, a 29/41 ratio is followed. This means that 29% or less of your monthly income can go towards your mortgage (Principal, Interest, Taxes, and Insurance) and 41% or less of your monthly income can go towards your total debt (this includes the mortgage and other debt obligations). Exceptions can be made in certain circumstances.

    5. Other Requirements:

    • Borrowers must personally occupy the dwelling as their primary residence.
    • The borrower must be legally able to take on the loan obligation.
    • First-time homebuyers are required to take a homeowner counseling class in some situations.

    6. Loan Terms:

    • The loan term is typically 30 years.
    • No down payment is usually required.
    • The interest rate can be set by the lender but is subject to USDA review.

    7. Guarantee Fee and Annual Fee:

      • The USDA charges an upfront guarantee fee, which can be rolled into the loan amount.
      • There’s also an annual fee, which is a percentage of the remaining principal amount, typically spread out in monthly installments.

    It’s crucial to remember that while these are the general requirements for Springfield, IL USDA mortgages, eligibility details can change. It’s always a good idea to consult with one of our Springfield, IL USDA home loan professionals. Get pre-approved with our easy and stress free Springfield, IL USDA home mortgage today.

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    More About Springfield, Illinois

    Springfield is the capital city of the U.S. state of Illinois and the county seat of Sangamon County. The city’s population was 114,394 at the 2020 census, which makes it the state’s seventh most-populous city, the second largest outside of the Chicago metropolitan area (after Rockford), and the largest in central Illinois. Approximately 208,000 residents live in the Springfield metropolitan area.

    Springfield was settled by European-Americans in the late 1810s, around the time Illinois became a state. The most famous historic resident was Abraham Lincoln, who lived in Springfield from 1837 until 1861, when he went to the White House as President of the United States. Major tourist attractions include multiple sites connected with Lincoln including the Abraham Lincoln Presidential Library and Museum, Lincoln Home, Old State Capitol, Lincoln-Herndon Law Offices, and the Lincoln Tomb at Oak Ridge Cemetery. Largely on the efforts of Lincoln and other area lawmakers, as well as its central location, Springfield was made the state capital in 1839.

    Springfield lies in a valley and plain near the Sangamon River. Lake Springfield, a large reservoir owned by the City Water, Light & Power company (CWLP), provides city residents with recreation and drinking water. Weather is fairly typical for middle latitude locations, with four distinct seasons including hot summers and cold winters. Spring and summer weather is like that of most Midwestern cities; thunderstorms may occur in late spring. Lying in Downstate Illinois, a part of Tornado Alley, tornadoes have hit the region on a few occasions.

    The city has a mayor–council form of government and governs the Capital Township. The government of the state of Illinois is based in Springfield. State government institutions include the Illinois General Assembly, the Illinois Supreme Court and the Office of the Governor of Illinois. There are three public and three private high schools in Springfield. Public schools in Springfield are operated by District No. 186. Springfield’s economy is dominated by government jobs, plus the related lobbyists and firms that deal with the state and county governments and justice system, and health care and medicine.

    Settlers originally named this community as “Calhoun”, after Senator John C. Calhoun of South Carolina, expressing their cultural ties. The land that Springfield now occupies was visited first by trappers and fur traders who came to the Sangamon River in 1818.