Vernon Hills, IL USDA Loans VS FHA Loans

Vernon Hills, IL USDA Home Loans vs Vernon Hills, 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 Vernon Hills, 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.

Vernon Hills, IL USDA Home Loans

1. What it is: The Vernon Hills, 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.

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

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

We service the following areas for FHA and USDA loans.

Learn more about Vernon Hills, Illinois

Vernon Hills is a suburb north of Chicago, Illinois in Lake County, Illinois, United States. The population was 26,850 at the 2020 census. Vernon Hills serves as a retail hub for its surrounding area (Libertyville, Lake Forest, Mundelein, Long Grove, Lincolnshire and Buffalo Grove).

The land that was to become Vernon Hills, founded by Richard Theodore Freese, Ron Freese, Nathan Kowitt, and Jim Carswell, began with the establishment of a 200-acre (0.81 km2) farm in 1857. Use of the land remained relatively static until the 1960s, when part of it was purchased for a residential community and golf course; the development was the first use of the name “Vernon Hills.” On June 16, 1958, the village officially incorporated with 123 residents and 125 houses in a single subdivision built by Quinn Hogan and Barney Loeb. During these times, the village and police department were run from a local motel until 1971 when village trustees bought two portable buildings. It saw steady but slow growth until the annexing of a plot of land near the corner of IL-60 and IL-21 in 1971, which led to the building of 1,200,000-square-foot (110,000 m2) Hawthorn Center. By 1980, the village’s population had grown to almost 10,000 residents, and by 2000, it had surpassed 20,000.

Through the 1980s and 1990s, the village grew geographically through the annexation of surrounding areas. This included land that would become the Corporate Woods business park and Centennial Crossing residential development (1986), a 1,200-acre (4.9 km2) section of Hawthorne-Mellody Farms (1988), and part of the village of Half Day (1994).

According to the 2010 census, Vernon Hills has a total area of 7.917 square miles (20.50 km2), of which 7.71 square miles (19.97 km2) (or 97.39%) is land and 0.207 square miles (0.54 km2) (or 2.61%) is water.

As of the census of 2010, there were 20,120 people, 7,568 households, and 5,312 families residing in the village. The population density was 2,708.3 inhabitants per square mile (1,045.7/km2). There were 7,813 housing units at an average density of 1,051.7 per square mile (406.1/km2). The racial makeup of the village was 81.86% White, 1.69% African American, 11.67% Asian, 0.10% Native American, 0.03 Pacific Islander, 2.92% from other races, and 1.72% from two or more races. Hispanic or Latino of any race were 7.19% of the population.