If you are looking for a loan that makes it easy to qualify for competitive rates and a low down payment, you may want to consider applying for an FHA mortgage.
You can buy a home in Chicago or elsewhere in Illinois with just 3.5% down with this type of mortgage.
What is an FHA Loan?
An FHA loan is a mortgage that is guaranteed by the Federal Housing Administration.
Because the FHA backs this type of mortgage, it poses less risk than a comparable conventional loan.
That means lenders are able to offer excellent rates and terms and easy qualification requirements.
Benefits of FHA Loans in Illinois
With an FHA mortgage, you can enjoy these advantages:
- Easy credit qualifications mean that you do not need perfect credit to enjoy affordable rates.
- Your down payment could be as low as 3.5%.
- Closing costs are capped, and in some cases, there may be no closing costs.
With an FHA mortgage, you can buy a home, build one, consolidate your debts, renovate your home, or refinance.
You can choose whether you prefer a fixed rate or an adjustable rate for this type of loan. A variety of loan terms also are available.
Requirements for Illinois FHA Loans
A common misconception about FHA loans is that they are only available for first time homebuyers. But regardless of whether you are a first time home buyer or a returning home buyer, applying for an FHA mortgage is an option.
Below, you can view the basic eligibility requirements for an FHA loan:
- If you want to quality for a 10% down payment, your credit score can fall anywhere between 500 and 579. To qualify for a 3.5% down payment, your credit score must be 580 or above.
- Your debt-to-income ratio should be 43-45% or lower.
- You will need to document two years of steady employment.
- Your Credit Alert Verification Reporting System (CAIVRS) record must be clear.
- You must have passed the 12-24 month waiting period since bankruptcy, if you have declared it in the past.
- If you were foreclosed on, the 3 year waiting period must be over.
- You must be buying a home to serve as your primary residence. It needs to rest on a permanent foundation, and must have been built on or after June 15th, 1976. It can be a single-family home, a 2-4 unit multifamily home, or a HUD-approved condo.
Buy a Home Now With an FHA Loan
If you are ready to buy a home with easy credit qualifications and a low down payment, we can help you apply for an FHA mortgage in Illinois, Indiana or Florida. Please give us a call today at
(708) 237-4050 to get started.