Steward, IL USDA Loans VS FHA Loans

Steward, IL USDA Home Loans vs Steward, 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 Steward, 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.

Steward, IL USDA Home Loans

1. What it is: The Steward, 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.

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

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

We service the following areas for FHA and USDA loans.

Learn more about Steward, Illinois

Steward is a village in Lee County, Illinois, United States. The population was 256 at the 2010 census, down from 271 in 2000.

Steward, Illinois, was named for Wesley Steward, who in 1855 came to this area in Alto Township to settle the land owned by his father, Marcus Steward. John Grimes built the first house in Alto Township in Plum Thicket in 1847, located east on the outskirts of the village as it is today. In 1861, Mr. Steward married and built the first farm house in the location of Steward, which is still standing. The town is located in the west central part of Alto Township and the northeast part of Lee County. Mr. Steward was influential in getting the Chicago and Iowa Railroad, now known as the Burlington Northern, through the township extending from Hinckley, Illinois to Rochelle, Illinois completed in 1870. The Village Hall on Main Street is one of the oldest buildings in existence and the jail cells bought in 1903 and housed in the building are still one of the few reminders of the early days (not used). In 1872 Mr. Steward built the first elevator at the east end of Main Street run by steam. The history of the elevators in Steward over the years is a story in itself. The first house in Steward after the town’s formation is on John Street, also standing today, built in 1872.

The railroad offices and warehouse were in Wesley Steward’s barn until 1871, when the first depot was then built. It is said to have burned down in 1894. The present depot, no longer in use by the Burlington Northern and in the process of being salvaged by a group in interested citizens of the village as a historical landmark, a museum, library, and social meeting place for anyone in the community, was built in 1896. This project “The Steward Illinois Depot Project, Inc.” was being projected as a Bicentennial venture during the 1976 year. In 1902 Steward was selected as the junctional point for the Chicago, Milwaukee and St. Paul Railroad Company as they recognized the need for a railroad to run south out of Rockford, Illinois. The Milwaukee depot and switch tower for both railroads were on the northwest edge of town.

The first businesses were a restaurant and general merchandise store built in 1871. By the early 1900s, business houses were located on both sides of Main Street with a steady growth and expansion until the depression days when the town could then gradually see a decline in the businesses. The charter for the First National Bank of Steward was signed and issued on December 18, 1902. A new building was erected and business started January 2, 1903 and continued till 1933. The first Post Office was established at Heaton Aug. 31, 1871 and located in the Steward depot. It was relocated in Steward April 12, 1876. Today it is located in the old bank building on Main Street. By 1976, the village became mostly a residential community with the exception of the Post Office.

Steward, IL has one public school in its district (district #220) named, Steward Elementary School. This school serves children ages Kindergarten through 8th grade. Their mascot is an Eagle.