FHA Mortgage Loans for Illinois Home Purchases
On August 20, 2013, Fannie Mae announced that it will increase the minimum down requirement on fixed rate mortgage loans to 5% from a previous minimum down payment of 3%. This change increases the amount of cash that home buyers have to bring to closing to purchase a home in Illinois and throughout the rest of the nation.
This change makes FHA mortgage lending in Illinois that much more important. FHA mortgage loans have many benefits which help home buyers. Some of these benefits are:
- 3.5% minimum down payment
- Marginal credit history may be acceptable
- Easier debt to income ratios (this is your mortgage payment plus your monthly debt divided by your gross monthly income)
- The down payment can be a gift, and in some cases, a loan from a relative or family member
- FHA mortgage loans allow co-borrowers to help primary borrowers get approved
- $410,000 maximum FHA mortgage limit for single family homes in the Chicago-Naperville-Joliet MSA as established by HUD
Although FHA recently made a change that now requires that borrowers pay mortgage insurance for the life of the loan, it will still continue to play an important role for first time buyers and other home buyers who do not have a large down payment. You do not need to be a first time buyer to obtain an FHA mortgage loan.
If you have questions about Illinois FHA mortgage loans or any other mortgage product, please contact United Home Loans today.