Towanda, IL USDA Home Loans vs Towanda, 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 Towanda, 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.
Towanda, IL USDA Home Loans
1. What it is: The Towanda, 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.
Towanda, 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 Towanda 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 Towanda, 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 Towanda, 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 Towanda, IL have income caps which could rule out higher earners, while FHA loans in Towanda do not.
To make the best decision, consider speaking with a mortgage professional who can provide advice tailored to your situation. Both Towanda, 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 Towanda, IL USDA and FHA loan options? Call today (888)416-4805.
We service the following areas for FHA and USDA loans.
Learn more about Towanda, Illinois
Towanda is a village in McLean County, Illinois, United States. The population was 431 at the 2020 census. It is part of the Bloomington–Normal Metropolitan Statistical Area. The village was named for Towanda in Bradford County, Pennsylvania. The name means “burial ground” in Nanticoke, an Algonquian language. The land on which Towanda stands was first entered by Charles Badeau who had graduated from Wesleyan University, Middletown, Connecticut, in 1840, and was employed as the assistant to the chief engineer of what was then the Alton and Springfield Railroad. Because in Illinois at that time it was illegal for railroads or their officials to establish new towns, much of the land was then transferred to two McLean County real estate developers, Jesse W. Fell (1808 – 1887) and Charles W. Holder (1819 – 1900). These two men laid out the town of Towanda and filed the plat on December 7, 1854. Fell, a native of Chester County in southeastern Pennsylvania, was a widely known land dealer in central Illinois who played a major role in founding many towns in the region, including Clinton, Dwight, Normal, and Pontiac, and who was the driving force behind the establishment of the school that would become Illinois State University. Holder was linked with Fell in many of his town founding schemes including Normal, Illinois, and Larchwood in Lyon County, Iowa; the McLean County town of Holder is named in his honor. Fell’s association with the railroad goes back to the time when it was surveyed. On at least two occasions he was able to alter the path of the railroad to suit his own interests: organizing a bend in the road so it would pass through his town of Normal and making a slight change in the survey so it would pass through the Livingston County town of Pontiac, where he had interests, rather than the rival town of Richmond. Shortly after Towanda was laid out, most of the land was back in the hands of the railroad’s land agent, English-born Charles Roadnight (1814-?). Roadnight built the first warehouse in Towanda; he settled in Bloomington, had a farm in Dwight, and in 1858 later became treasurer of what was then the Chicago and Alton Railroad. Central Illinois towns of the 1830s, such as Bloomington, Lexington, Leroy and Pontiac, were usually built around a central square. In contrast, most towns of the 1850s, like Towanda, were oriented toward the railroad tracks. In the case of Towanda a diagonal main street was established parallel to the railroad, with the main building lots on only one side; the effect was to have the commercial establishments look across the street toward the tracks. This was a common design in newly established towns along the Chicago and Alton Railroad and may be found, with slight variations, in places like Dwight, Gardner, Odell and McLean; Fell’s town of Normal, established at the same time as Towanda, was to have had exactly the same arrangement; except that in Normal, the original street paralleling the railroad quickly lost its importance to the reverse side of the block. This standard town plan often left town designers with odd triangular pieces of land, where the diagonal street met with other streets which were aligned north–south or east–west. These triangles are often still in public hands. In the case of Towanda, Fell gave each of two triangular areas, one on either side of the tracks, to the town. On the original deed they were given the name “plaza”, and both have always served the city as parks. Alex Warren built the first residence in the new town and James Alexander the first warehouse. These were soon followed by Wesley Bishop’s grocery and Frank Henderson’s dry goods store. The largest building was a two-story structure built by Charles Roadnight, which was 50 by 100 feet (15 by 30 m); the first floor was used for stores and the second as a meeting room. It burned about 1900. In 1873–1874, wooden sidewalks were being built, followed by brick sidewalks in 1891 and concrete walkways in 1916. The town was officially incorporated in 1870. The first jail was built in the North Park and replaced at least once; the structure can not have been very substantial because in 1901 the town fathers were forced to appoint a committee to inquire into what had happened to the jail. Perhaps the most exciting event in the town’s history was the attack on the Buena Vista Tavern. A group of local women took exception to the amount of money their menfolk were spending on whiskey. They assembled at the hardware store where they were issued hatchets. They then marched into the Buena Vista smashing bottles, threatening the barman, and hurling whatever they could find through the tavern windows. Each of the women was fined one dollar. A series of photographs taken in the 1870s give a striking view of early Towanda town. They show a town crisscrossed with fences and looking rather like the set for a western movie. Cattle and hogs were driven into town at night and penned before shipping on the railroad. Houses are carefully fenced to protect gardens from stray livestock. The majority of the homes are wooden I-cottages: single story, or story-and-a-half, wood frame dwellings with a symmetrical façade. There are some modest two-story structures. Along the railroad, long rail corn crib may be seen. The simple board-and-batten railroad station is clearly visible. Perhaps the most striking structure is a stone tank house topped with a windmill.