Urbana, IL USDA Eligibility

USDA Eligibility Guide

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Urbana, IL USDA Loan Eligibility Guide

A USDA (United States Department of Agriculture) mortgage, also known as a Urbana, 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 Urbana, 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 Urbana, 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 Urbana, IL USDA mortgages, eligibility details can change. It’s always a good idea to consult with one of our Urbana, IL USDA home loan professionals. Get pre-approved with our easy and stress free Urbana, IL USDA home mortgage today.

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    More About Urbana, Illinois

    Urbana (/ɜːrˈbænə/ ur-BAN-ə) is a city in and the county seat of Champaign County, Illinois, United States. As of the 2020 census, Urbana had a population of 38,336. As of the 2010 United States Census, Urbana is the 38th-most populous municipality in Illinois. It is included in the Champaign–Urbana metropolitan area.

    Urbana is notable for sharing the campus of the University of Illinois Urbana-Champaign with its twin city of Champaign.

    The Urbana area was first settled by Europeans in 1822, when it was called “Big Grove”. When the county of Champaign was organized in 1833, the county seat was located on 40 acres of land, 20 acres donated by William T. Webber and 20 acres by M. W. Busey, considered to be the city’s founder, and the name “Urbana” was adopted after Urbana, Ohio, the hometown of State Senator John W. Vance, who authored the Enabling Act creating Champaign County. The creation of the new town was celebrated for the first time on July 4, 1833.

    Stores began opening in 1834. The first mills were founded in c. 1838-50. The town’s first church, the Methodist Episcopal Church, and the parsonage, was built in 1840 by the Rev. A. Bradshaw, with the Baptist Church following in 1855. The Presbyterian Church was founded in 1856. The city’s first school was built in 1854.

    Urbana suffered a setback when the Chicago branch of the Illinois Central Railroad, which had been expected to pass through town, was instead laid down two miles west, where the land was flatter. The town of West Urbana grew up around the train depot built there in 1854, and in 1861 its name was changed to Champaign. The competition between the two cities provoked Urbana to tear down the ten-year-old County Courthouse and replace it with a much larger and fancier structure, to ensure that the county seat would remain in Urbana.