First Time Home Buying in Illinois with FHA Mortgages and Down Payment Assistance
FHA mortgages are home loans that are given to Illinois prospective home buyers by lenders who are backed by the Federal Housing Administration. These loans are often very attractive to first time home buyers across the state of Illinois, as they allow these future home owners a way to obtain a loan that has a reasonable interest rate, famously low down payment, and availability to those with low credit or no credit at all. A FHA mortgage will come with mortgage insurance that allows lenders to feel safe giving loans to those with less than perfect credit, as the insurance ensures that the lender will not suffer a loss should the loan go unable to be repaid.
One of the most desirable traits of FHA mortgages for first time home buyers across the state of Illinois is the benefit of low down payment rates. Often, down payments on mortgages will need to be saved for during the course of months or even years, causing the home buying process to take much longer than a person may have anticipated. With FHA mortgages, however, home loan down payment rates are often only 3.5% of the total cost of the loan, making this expense one that is far more affordable to a first time buyer.
Home loans through FHA mortgages in Illinois do have limits, and it is best for those looking to finance a home using this option to investigate the limits in their chosen area before applying for their FHA home loan. A home loan limit is an amount that the cost of the mortgage cannot exceed in order to qualify for the loan, and these costs will generally directly reflect the income statuses and home prices of a given area. In Illinois, the higher income areas of Grundy Count y or Kane County will have limits of around $272,000, meaning that the mortgage being sought cannot exceed this amount.
For lower income regions, much lower limit rates are often seen, and in counties such as Knox County or Jefferson County, the loan limit will be under $70,000 for the year 2014. Although this amount may seem low, it is based on the median housing price rates within the region, meaning that many suitable residences can be found within these limits in the area. These limits are also subject to change from year to year along with the changes seen in the housing market, making it a good idea for home loan limit research to be kept up to date for any prospective home buyers in the state of Illinois looking to mortgage a new home for the first time using an FHA lender.
Illinois Home Buying Resources:
To help potential buyers, the Illinois Affordable Housing Trust Fund program offers low- and very low-income individuals help with down payment and closing cost assistance. Assistance is available in the form of a grant or a loan. Households earning at or below 50 percent of the area median income are eligible for a maximum grant amount of $5,000. Households earning between 51 percent and 80 percent of the area median income (AMI) are eligible for a maximum grant of $3,000. Grants are forgiven monthly over a five-year recapture period.
Subordinate loan assistance: Households between 51 percent and 80 percent AMI are eligible for a maximum loan amount of $20,000. Households at 50 percent AMI are eligible for a maximum loan amount of $30,000.
Grants for Home Buying in Illinois
HUD House Buying Advice in IL