Illinois FHA Loans – Requirements and Loan Limits for 2024 – Illinois FHA Lenders
Illinois home buyers who need a small down payment or have poor credit scores may be able to purchase a home with an Illinois FHA loan. There are many FHA lenders who offer FHA loans, but not all of them participate in all of the FHA loan options available.
We will take you through the Illinois FHA loan requirements, detail what is needed to qualify, then help you to get pre-qualified. If you already know that an FHA loan is right for you, then we can help you to speak with a loan officer whether you live in Chicago, Aurora, Joliet, Naperville, or even in a rural area of Illinois.
We also have a helpful FHA mortgage payment calculator so you can get an estimate of what your monthly payment could be.
Why Choose an FHA Loan?
FHA loans happen to be the most popular type of mortgage after conventional loans. They account for over 25% of all mortgages and FHA is an important program to help first time home buyers.
Some of the reasons why an FHA loan may be right for you are as follows:
- Lower down payment options
- Allows for lower credit scores
- FHA interest rates are sometimes lower than conventional rates
- You can have a cosigner help to qualify for a larger loan amount
- Stretch your buying power with a higher debt to income ratio limit
- Gift funds are permitted to help with the down payment
- Seller concessions allowed to help with closing costs
- Shorter waiting period after a bankruptcy
If one or more of these apply to you, then you may want to consider an FHA loan.
Illinois FHA Down Payment Requirements
The down payment requirements for an FHA loan is the same in every state. The minimum requirement for an FHA loan is 3.5% of the purchase price. However, if your credit score is below 580, then the down payment requirement will be 10%.
If you do not have the down payment needed, you can also use gift funds from a relative. You may also qualify for down payment assistance either from a local organization or your lender.
Illinois FHA Down Payment Assistance
There are various down payment assistance programs in every state. Below is a list of just a few down payment assistance programs that may be available to you in Illinois . Home buyers will need to contact, and arrange for these programs independently. Lenders will accept the funds from these programs for your down payment but they will not arrange for the down payment assistance.
Madison County Down Payment Assistance
Illinois Down Payment Assistance Program
Kane County Down Payment Assistance Program
Chicago Home Buyer Assistance Program
Joliet Home Buyer Assistance Program
There are also lenders who offer down payment assistance as part of their mortgage program. It is often an additional smaller loan to cover the down payment portion. If you hold onto the mortgage long enough, some lenders make that down payment forgivable. If you are interested in down payment assistance from your lender, then contact us here to discuss.
Illinois FHA Loan Requirements for 2024
These are the basic FHA loan requirements for this year. All of these must be met to be approved for an FHA loan. If you are not positive on whether you meet these standards or have questions, an FHA lender can help.
- Down payment of 3.5% or 10% if your credit score is below 580
- 2-year employment history with some exceptions allowed
- Fully document your income for the past two years
- Minimum FICO score requirement of 500 – down payment will vary
- Mortgage Insurance Premium (MIP) is required for every FHA loan
- Maximum debt to income ratio of 43% with exceptions up to 56%
- The home must be your primary residence
- No bankruptcies or foreclosures in the past two years
Top Illinois FHA lenders
These lenders are just a few options for you to consider. Please note that each lender is different and it is possible that none of these options are best for you depending upon your scenario.
- Carrington Mortgage Services – Contact
- Bank of England Illinois – Contact
- Flagstar Bank – Contact
- Quicken Loans – Contact
- Home Point Financial – Contact
- Town and Country Bank – Contact
Let us help you to find the best FHA lender in your area by completing this FHA loan scenario form with some basic loan scenario information. No credit report will be pulled and we can connect you with the best option.
Illinois FHA Loan Limits
Every county in the United States has specific maximum loan limits that are set for single family homes, as well as 2-4 unit properties. The limits are set based upon the average home sales value in that county. The base FHA loan limit for single family residences in Illinois for all counties is $498,257. There do not appear to be an high cost counties in Illinois.
Use this FHA loan limit lookup tool to see what the FHA loan limits are in your county.
| County Name | Single Family | 2 Units | 3 Units | 4 Units |
|---|---|---|---|---|
| ADAMS | $498,257 | $637,950 | $771,125 | $958,350 |
| ALEXANDER | $498,257 | $637,950 | $771,125 | $958,350 |
| BOND | $498,257 | $637,950 | $771,125 | $958,350 |
| BOONE | $498,257 | $637,950 | $771,125 | $958,350 |
| BROWN | $498,257 | $637,950 | $771,125 | $958,350 |
| BUREAU | $498,257 | $637,950 | $771,125 | $958,350 |
| CALHOUN | $498,257 | $637,950 | $771,125 | $958,350 |
| CARROLL | $498,257 | $637,950 | $771,125 | $958,350 |
| CASS | $498,257 | $637,950 | $771,125 | $958,350 |
| CHAMPAIGN | $498,257 | $637,950 | $771,125 | $958,350 |
| CHRISTIAN | $498,257 | $637,950 | $771,125 | $958,350 |
| CLARK | $498,257 | $637,950 | $771,125 | $958,350 |
| CLAY | $498,257 | $637,950 | $771,125 | $958,350 |
| CLINTON | $498,257 | $637,950 | $771,125 | $958,350 |
| COLES | $498,257 | $637,950 | $771,125 | $958,350 |
| COOK | $498,257 | $637,950 | $771,125 | $958,350 |
| CRAWFORD | $498,257 | $637,950 | $771,125 | $958,350 |
| CUMBERLAND | $498,257 | $637,950 | $771,125 | $958,350 |
| DE WITT | $498,257 | $637,950 | $771,125 | $958,350 |
| DEKALB | $498,257 | $637,950 | $771,125 | $958,350 |
| DOUGLAS | $498,257 | $637,950 | $771,125 | $958,350 |
| DUPAGE | $498,257 | $637,950 | $771,125 | $958,350 |
| EDGAR | $498,257 | $637,950 | $771,125 | $958,350 |
| EDWARDS | $498,257 | $637,950 | $771,125 | $958,350 |
| EFFINGHAM | $498,257 | $637,950 | $771,125 | $958,350 |
| FAYETTE | $498,257 | $637,950 | $771,125 | $958,350 |
| FORD | $498,257 | $637,950 | $771,125 | $958,350 |
| FRANKLIN | $498,257 | $637,950 | $771,125 | $958,350 |
| FULTON | $498,257 | $637,950 | $771,125 | $958,350 |
| GALLATIN | $498,257 | $637,950 | $771,125 | $958,350 |
| GREENE | $498,257 | $637,950 | $771,125 | $958,350 |
| GRUNDY | $498,257 | $637,950 | $771,125 | $958,350 |
| HAMILTON | $498,257 | $637,950 | $771,125 | $958,350 |
| HANCOCK | $498,257 | $637,950 | $771,125 | $958,350 |
| HARDIN | $498,257 | $637,950 | $771,125 | $958,350 |
| HENDERSON | $498,257 | $637,950 | $771,125 | $958,350 |
| HENRY | $498,257 | $637,950 | $771,125 | $958,350 |
| IROQUOIS | $498,257 | $637,950 | $771,125 | $958,350 |
| JACKSON | $498,257 | $637,950 | $771,125 | $958,350 |
| JASPER | $498,257 | $637,950 | $771,125 | $958,350 |
| JEFFERSON | $498,257 | $637,950 | $771,125 | $958,350 |
| JERSEY | $498,257 | $637,950 | $771,125 | $958,350 |
| JO DAVIESS | $498,257 | $637,950 | $771,125 | $958,350 |
| JOHNSON | $498,257 | $637,950 | $771,125 | $958,350 |
| KANE | $498,257 | $637,950 | $771,125 | $958,350 |
| KANKAKEE | $498,257 | $637,950 | $771,125 | $958,350 |
| KENDALL | $498,257 | $637,950 | $771,125 | $958,350 |
| KNOX | $498,257 | $637,950 | $771,125 | $958,350 |
| LAKE | $498,257 | $637,950 | $771,125 | $958,350 |
| LASALLE | $498,257 | $637,950 | $771,125 | $958,350 |
| LAWRENCE | $498,257 | $637,950 | $771,125 | $958,350 |
| LEE | $498,257 | $637,950 | $771,125 | $958,350 |
| LIVINGSTON | $498,257 | $637,950 | $771,125 | $958,350 |
| LOGAN | $498,257 | $637,950 | $771,125 | $958,350 |
| MACON | $498,257 | $637,950 | $771,125 | $958,350 |
| MACOUPIN | $498,257 | $637,950 | $771,125 | $958,350 |
| MADISON | $498,257 | $637,950 | $771,125 | $958,350 |
| MARION | $498,257 | $637,950 | $771,125 | $958,350 |
| MARSHALL | $498,257 | $637,950 | $771,125 | $958,350 |
| MASON | $498,257 | $637,950 | $771,125 | $958,350 |
| MASSAC | $498,257 | $637,950 | $771,125 | $958,350 |
| MCDONOUGH | $498,257 | $637,950 | $771,125 | $958,350 |
| MCHENRY | $498,257 | $637,950 | $771,125 | $958,350 |
| MCLEAN | $498,257 | $637,950 | $771,125 | $958,350 |
| MENARD | $498,257 | $637,950 | $771,125 | $958,350 |
| MERCER | $498,257 | $637,950 | $771,125 | $958,350 |
| MONROE | $498,257 | $637,950 | $771,125 | $958,350 |
| MONTGOMERY | $498,257 | $637,950 | $771,125 | $958,350 |
| MORGAN | $498,257 | $637,950 | $771,125 | $958,350 |
| MOULTRIE | $498,257 | $637,950 | $771,125 | $958,350 |
| OGLE | $498,257 | $637,950 | $771,125 | $958,350 |
| PEORIA | $498,257 | $637,950 | $771,125 | $958,350 |
| PERRY | $498,257 | $637,950 | $771,125 | $958,350 |
| PIATT | $498,257 | $637,950 | $771,125 | $958,350 |
| PIKE | $498,257 | $637,950 | $771,125 | $958,350 |
| POPE | $498,257 | $637,950 | $771,125 | $958,350 |
| PULASKI | $498,257 | $637,950 | $771,125 | $958,350 |
| PUTNAM | $498,257 | $637,950 | $771,125 | $958,350 |
| RANDOLPH | $498,257 | $637,950 | $771,125 | $958,350 |
| RICHLAND | $498,257 | $637,950 | $771,125 | $958,350 |
| ROCK ISLAND | $498,257 | $637,950 | $771,125 | $958,350 |
| SALINE | $498,257 | $637,950 | $771,125 | $958,350 |
| SANGAMON | $498,257 | $637,950 | $771,125 | $958,350 |
| SCHUYLER | $498,257 | $637,950 | $771,125 | $958,350 |
| SCOTT | $498,257 | $637,950 | $771,125 | $958,350 |
| SHELBY | $498,257 | $637,950 | $771,125 | $958,350 |
| ST. CLAIR | $498,257 | $637,950 | $771,125 | $958,350 |
| STARK | $498,257 | $637,950 | $771,125 | $958,350 |
| STEPHENSON | $498,257 | $637,950 | $771,125 | $958,350 |
| TAZEWELL | $498,257 | $637,950 | $771,125 | $958,350 |
| UNION | $498,257 | $637,950 | $771,125 | $958,350 |
| VERMILION | $498,257 | $637,950 | $771,125 | $958,350 |
| WABASH | $498,257 | $637,950 | $771,125 | $958,350 |
| WARREN | $498,257 | $637,950 | $771,125 | $958,350 |
| WASHINGTON | $498,257 | $637,950 | $771,125 | $958,350 |
| WAYNE | $498,257 | $637,950 | $771,125 | $958,350 |
| WHITE | $498,257 | $637,950 | $771,125 | $958,350 |
| WHITESIDE | $498,257 | $637,950 | $771,125 | $958,350 |
| WILL | $498,257 | $637,950 | $771,125 | $958,350 |
| WILLIAMSON | $498,257 | $637,950 | $771,125 | $958,350 |
| WINNEBAGO | $498,257 | $637,950 | $771,125 | $958,350 |
| WOODFORD | $498,257 | $637,950 | $771,125 | $958,350 |
FHA 203k Loans in Illinois
FHA 203k loans are a great program which will allow you to borrow the money needed to purchase the home plus additional funds needed to rehabilitate or remodel the home. You can use the program to make minor changes such as painting, or larger renovations like kitchen and bath remodels. Some lenders will also approve the loan to add more rooms to the home.
This program is also available in your state and we work with lenders that help with your FHA 203k loan.
If you would like to fully understand how this program works, we suggest reading our article on FHA 203k loans.
FHA Streamline Refinance in Illinois
The FHA streamline refinance program is available to existing homeowners who would like to refinance for a lower rate while eliminating some of the refinance costs such as an appraisal. You may also get a discount on the mortgage insurance premium which is another advantage.
For more information, please read our article on the FHA streamline refinance.
FHA Cash Out Refinance
If you already own your home and would like to cash out the equity, an FHA cash out refinance will allow you to do that. The loan program has a limit of what you can cash out capped at 80% of the appraised value of the home.
You can use the funds for anything and you are not required to make home improvements like you are with the 203k rehab loan. The cash out refinance is a great way to help consolidate high interest consumer debt to help lower your total monthly payments.
Illinois FHA Loan Pre-Approval Process
If you are looking for an FHA loan, there is an optimal process you should follow to get pre-approved.
- The first step is to make sure you have the minimum down payment needed to qualify
- check your credit and try to cleanup anything that is pulling down your scores
- Get a copy of your tax returns for the past two years
- Get copies of your pay stubs for the past month
- Get copies of your last two months’ bank statements
- Speak to an FHA lender about your loan scenario
Speak to a lender early in the process because they can identify opportunities to help with your FHA approval. This should be done months before you start looking for a home. Read more about how to get pre-approved for an FHA loan.
What to Look for in an FHA Lender
We take a few things into consideration when looking at which Illinois FHA lenders we work with. Some of these also may be, or should be very important to you as you continue shopping for an FHA loan.
A good FHA lender will:
- Allow for credit scores as low as 500
- Provide FHA 203k loans
- Offer competitive rates and fees
- Have a great processing and underwriting team
- Work closely with you throughout the loan process
- Communicate well and will provide you with updates along the way
Illinois FHA Loan Calculator
Our FHA loan calculator will help you to determine what your payment could be. Simply change or complete the information in the calculator below to reflect your personal scenario and requirements.
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FHA Loans in Chicago
Chicago has a nice mix if single family homes, multi family and also condominiums. The loan limits are the same for Chicago as they are in all other counties in the state. However, for the multi family homes, the loan limits are much higher.
Something to look out for is the condition of the home you may be interested in buying. There are a lot of older homes for sale and FHA loans require a very thorough inspection. The home must be safe and everything should be in working order to finance the home with an FHA loan.
If you are considering buying or refinancing a home in Chicago, we can help provide you with a competitive quote.
Credit Score to Buy a House in Illinois
The minimum credit score to purchase a home in Illinois is 3.5% with credit scores of at least 580. If your scores are 500-579, the down payment will ne 10%. Adding a co-signer can help bring additional income to the application, but it will not help with credit.
One of our experienced loan officers can work with you to help improve your credit scores. That is just part of the service provided when applying for a mortgage.
First Time Home Buyer in Illinois with Bad Credit
If you are a first time home buyer in Illinois with bad credit, you may still qualify for purchase a home. As a first time home buyer, you potentially can qualify for some of the down payment programs referenced above. However, with bad credit your down payment will need to be higher.
If your credit issues are related to collections or late payments, your loan officer may ask you to repair some of those issues and possibly remove disputes.
Illinois FHA Loan with a Bankruptcy
Buying a home in Illinois with a bankruptcy is possible with an FHA loan. With a recent Chapter 7 bankruptcy, you will need to wait two years from your discharge date before applying for an FHA loan. In rare occasions, you can get an exception to the two year waiting period if you can demonstrate extreme circumstances.
Those who have had a Chapter 13 bankruptcy may apply for an FHA after you have made just 12 on time bankruptcy payments.
Frequently Asked FHA Questions
Can I get an FHA loan with a bankruptcy?
In general, you will need to wait two years before applying for an FHA loan after a bankruptcy. However, there are some exceptions which may allow you to apply sooner. Read our article on the bankruptcy waiting period.
Are all FHA lenders the same?
Not all lenders who offer FHA loans are the same. They all do not offer all of the FHA programs and their rates and fees may also vary. Most importantly, the individuals who help to process and underwrite your loan will have a huge impact on your FHA loan experience.
Can I use gift funds for an FHA loan?
FHA loans do allow for gift funds to cover your down payment as well as your closing costs. The gift funds must come from a relative or a close friend as approved by the lender. You will need to provide the lender with a gift letter that is signed by the donor.
Do I need an appraisal for an FHA loan?
The FHA does require an appraisal and inspection before your loan can be approved. The FHA inspection has clear guidelines on what needs to be repaired before your loan can close. They want to make sure home buyers are moving into a home that is safe and operational.
Can I get an FHA loan for an investment property?
FHA loans are for primary residences only and if your goal is to purchase an investment property, you cannot use FHA insured financing for that purchase. However, if you are currently living in a home that is financed with an FHA loan, you can move to a new home and keep the current home as an investment.
We have FHA lenders who can help with your FHA loan in these 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