Illinois FHA Loan Limits for 2024
The Illinois FHA loan limits in 2024 have been updated and the limits may vary by county with the potential to change next year. For this year, the limits for a single family residence in Arizona range starts at $498,257. We will keep you updated on any changes as they occur.
FHA loans designed for individuals who may not have abundant savings for a down payment or whose credit scores don’t meet conventional loan requirements. These loans, known for their flexible guidelines, attract a sizable portion of first-time homebuyers who are looking to purchase their dream home.
Reach out to us for a rate quote in your area and to see whether you qualify. We have helped thousands of Illinois residents this year to get a low rate FHA home loan.
Illinois FHA Mortgage Benefits
One of the standout qualities of FHA loans is their flexibility with down payments. While conventional home loans typically require around 20% down payment, FHA loans generally ask for as little as 3.5%. This substantially lowers the barrier to entry, making it much easier for first-time homebuyers and others with limited funds to qualify for a mortgage.
- FHA mortgages allow for low credit scores down to 500.
- FHA mortgages require very low down payments of just 3.5%.
- FHA mortgages also never have pre-payment penalties
- FHA mortgages help borrowers to find their dream home and are often the choice for first time home buyers.
Illinois FHA Loan Requirements
FHA loans are easier to qualify for than conventional loans. However, you must fully document your income with pay stubs, W2’s and tax returns.
- FHA Employment Requirements– You must have a full two year work history to qualify. If you are self employed, you would need to have owned your business for two years.
- Residency Requirements – The home you plan to purchase must be occupied as your primary residence. Multi family buildings up to 4 units are eligible as long as you occupy one of those units are your own residence. Investment properties are not allowed.
- FHA Income Documentation – You must show recent pay stubs, tax returns for the past two years, and bank statements for the past two months. If you are self employed, you will need to also document your income.
- FHA Mortgage Down Payment Requirement – The minimum down payment requirement for an FHA mortgage in 2018 is 3.5% with a credit score of 580 or higher. Read more about FHA DOWN PAYMENT INFORMATION
- FHA Credit Score Requirement – You can qualify for an Illinois FHA mortgage with a credit score of 580 or more. You may also get qualified with a credit score as low as 500, but you will likely have to put as down as much as 10%.
- FHA Mortgage Insurance (MIP) – You will be required to have an FHA mortgage insurance premium (MIP). You may read more about what this insurance will cost at our full FHA mortgage page.
FHA Property and Usage Requirements
Something that is important to understand is FHA loans are only for primary residences. You can purchase or refinance a home that is 1-4 units. It can be a single family, multi family, condo, townhome, or mobile/manufactured home.
In southern IL there are many mobile homes that would meet the criteria for an FHA loan. However, the property cannot be a working farm which in which case both an FHA and USDA loan would not be approved.
Another FHA requirement is for the property to pass the rigorous FHA inspection. The purpose of the inspection is to protect you from purchasing a home that is in disrepair or potentially poses a health hazard. The inspection will cost you a few hundred dollars but it is well worth it. The information you find out about the home while walking with the inspector is worth every penny.
Click to connect to an Illinois FHA loan specialist to see if you qualify and to get a rate quote
2024 Illinois FHA Loan Limits
FHA Application Process
When buying a home using an FHA loan in Illinois, it all starts with the loan application. This first step informs your loan officer about your financial background and the type of home you want to buy. You will need to provide important financial documents, such as pay stubs, tax returns, and bank statements.
Once you submit your loan application and provided all necessary financial documentation, your loan officer will pull your credit report and run your application through the automated underwriting system (AUS). Remember to fully complete the loan application. We often have to go back to applicants asking them to finish portions they thought were not relevant. An incomplete application will delay the process for you.
If you receive an approval, you can receive a pre-approval letter to share with your real estate agent and begin the home shopping process.
Once you are in contract, provide us with a copy of your signed purchase contract and the file can then be submitted to underwriting. If you receive a conditional approval from underwriting, then you should consider ordering the FHA inspection and appraisal.
Once you are beyond the inspection and appraisal, the title work and insurance documentation can commence. This can take up to a week to complete and return to the underwriter who can issue the “clear to close” to you and the loan officer.
Let us help you with this process. Simply contact us here and we will take care of it all for you.
Illinois FHA Streamline Refinance Loan Information
FHA Loan Frequently Asked Questions – FHA FAQ
Q: How long do you have to live in the house with an FHA loan?
A: The guidelines indicated that you must occupy the home for 12 months after closing.
Q: Does the FHA loan have to be for a primary residence?
A: Yes, FHA loans are only for a primary residence.
Q: What is the Illinois FHA down payment requirement?
A: You will need to put down 3.5% for an FHA loan. More if your credit scores are extremely low.
Q: Do FHA loans require mortgage insurance?
A: Yes, if you are putting down less than 20%, you will need to pay monthly MI (Mortgage Insurance)
Q: Is an FHA loan only for first time home buyers?
A: No, anyone can apply for an FHA loan as long as you meet all of the criteria.
Q: Can veterans apply for an FHA loan?
A: Yes, but they will need to submit a DD form 212 with your application. We believe the best program for veterans is the VA Loan.
Q: What are the FHA mortgage loan fees?
A: The fees are regulated but we recommend that you contact an FHA lender here to outline all of the fees that may pertain to you.
Q: Can I get an FHA loan with a 500 credit score?
A: There are some lenders who will work with scores that low, but you will need a larger down payment.
Q: What is the FHA Loan limit in my area?
A: We recommend that you discuss this with one of our lenders or click the link above where you can research the limits in your area.
Q: Can I get an FHA loan with bad credit?
A: Yes, you can but the down payment requirement may be higher as well as the interest rate.
Q: Can I get an FHA loan on more than one property?
A: Typically no but there are some circumstances where it would be allowed. Contact one of our FHA Lenders to find out more.
Q: Are gift funds permitted to be used towards the down payment?
A: Yes, a gift can come from a relative, close friend, your employer, a charity, or a government agency.
We are able to help you to find an FHA loan with the best FHA lenders in the following states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming.