West Frankfort, IL USDA Loans VS FHA Loans

West Frankfort, IL USDA Home Loans vs West Frankfort, 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 West Frankfort, 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.

West Frankfort, IL USDA Home Loans

1. What it is: The West Frankfort, 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.

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

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

We service the following areas for FHA and USDA loans.

Learn more about West Frankfort, Illinois

West Frankfort is a city in Franklin County, Illinois. The population was 7,275 at the 2020 census. The city is well known for its rich history of coal. The city is part of the Metro Lakeland area.

Although one might associate the name “West Frankfort” with the city “Frankfurt” in Germany, or Frankfort in Kentucky, the truth is far more local. Around 1810, early Tennessee settler Francis (“Frank”) Jordan and his seven brothers began the construction of no fort atop a hill in present-day Franklin County. Completed in 1811, the fort was named “Frank’s Fort,” in Jordan’s honor.

Frank’s Fort was built in today’s Williamson County, Ill., near Corinth. A few miles to the east, Francis’ brother, Thomas Jordan, built “Jordan’s Fort” in Cave Township, Franklin County, Ill., near the town of Thompsonville.

The construction of these forts was in response to the danger of attack during Tecumseh’s War, which culminated in the Battle of Tippecanoe in 1811. Then-governor of the Illinois Territory, Ninian Edwards, actively encouraged the construction of these forts and offered the services of the Saline Militia in their erection. Thus, both Jordan family forts were built with the help of the Illinois Militia for safety of the civilians.

Since the Shawnee Trail, an important trading route linking Kaskaskia, Illinois and Old Shawneetown, Illinois, ran along the high ground in the vicinity of the fort, this area became an attractive destination for settlers in search of cheap land made available by the recently passed Bit Act of 1850. The resulting settlement took the name of the nearby fort, which was subsequently shortened to “Frankfort.” Frankfort grew quickly during this period, with its population rivaling that of Chicago, at the time.