FHA Loans in Illinois
If you're in Illinois and are considering the purchase of your first home, now would be a great time. Housing prices are the lowest they've been in years thanks to a slower than average economy, and sellers are usually very willing to negotiate terms such as purchase price, closing costs, and other considerations.
Illinois FHA Loan Limits
There aren't many special requirements to qualify for an Illinois FHA loan, but you should be aware that there is a maximum loan amount which the program will provide. The loan value is set each year based on the median house prices in the country for the previous year and then adjusted for the cost of living in certain areas. Some cities or counties with high housing costs receive an adjustment from the FHA which provides a larger loan value for these areas.
In 2009, the maximum loan value for average cost of living areas was $271,050 for a single family home. However, for parts of Illinois, the amount is greater. In Chicago, for example, the maximum loan value is $410,000 for a single family home, and in Rockford, the maximum is $339,250. Check with your lender for Illinois FHA loan values for your county and for your situation, particularly if you plan to buy a multi-family dwelling. Multi family dwelling loan amounts are generally higher and also vary by state and county.
Why Choose an FHA Loan?
If, despite the benefits of owning your own home, you're still concerned about obtaining financing due to your credit history or the amount of cash you've saved for your down payment, you might want to consider an Illinois FHA loan. Illinois FHA loans are designed for buyers who might not be able to qualify comfortably for a traditional loan from a bank or other lending institution. The FHA (Federal Housing Administration) doesn't actually provide these loans, but instead guaranties them through your local bank to make your loan less of a risk than it would be without the guaranty. The lllinois FHA loan program can be a boon to borrowers with poor credit history (even bankruptcy) and those with less than the traditional 20% down payment. In fact, the FHA permits buyers to have as little as 3.5% of the purchase price for a down payment.