Wood River, IL USDA Home Loans vs Wood River, 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 Wood River, 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.
Wood River, IL USDA Home Loans
1. What it is: The Wood River, 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.
Wood River, 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 Wood River 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 Wood River, 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 Wood River, 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 Wood River, IL have income caps which could rule out higher earners, while FHA loans in Wood River do not.
To make the best decision, consider speaking with a mortgage professional who can provide advice tailored to your situation. Both Wood River, 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 Wood River, IL USDA and FHA loan options? Call today (888)416-4805.
We service the following areas for FHA and USDA loans.
Learn more about Wood River, Illinois
Wood River is a city in Madison County, Illinois. The population was 10,464 as of the 2020 census. Wood River is located in western Madison County on the Mississippi River approximately 15 miles (24 km) upstream of downtown St. Louis, Missouri. It is among several contiguous cities and villages that have come to be known as the “Riverbend” area. The current confluence of the Mississippi and the Missouri rivers is just south of one of these neighboring villages, Hartford. Wood River is bordered to the northwest by East Alton, to the north by Rosewood Heights, to the northeast by Bethalto, to the southeast by Roxana, to the south by Hartford, and to the southwest, across the Mississippi River, by West Alton, Missouri. Illinois Route 3 passes through the west side of the city, leading north 5 miles (8 km) to the north side of Alton and south 18 miles (29 km) to East St. Louis. Illinois Route 143 passes through the center of Wood River as Madison Avenue, leading northwest 5 miles (8 km) to the center of Alton and southeast 9 miles (14 km) to Edwardsville. Illinois Route 111 follows Central Avenue through the center of Wood River, leading north 3.5 miles (5.6 km) to the west part of Bethalto and south 16 miles (26 km) to Washington Park. Illinois Route 255, a four-lane limited-access highway, passes through the east side of Wood River, leading northwest 10 miles (16 km) to Godfrey and south 15 miles (24 km) to Collinsville. According to the U.S. Census Bureau, Wood River has a total area of 7.23 square miles (18.73 km2), of which 6.98 square miles (18.08 km2) are land and 0.25 square miles (0.65 km2), or 3.47%, are water. At the 2000 census there were 11,296 people, 4,725 households, and 2,995 families living in the city. The population density was 1,865.2 inhabitants per square mile (720.2/km2). There were 5,001 housing units at an average density of 825.8 per square mile (318.8/km2). The racial makeup of the city was 97.57% White, 0.63% African American, 0.27% Native American, 0.45% Asian, 0.35% from other races, and 0.73% from two or more races. Hispanic or Latino of any race were 1.21%.