USDA Rural Development Loans: A Guide for Rural Homebuyers in Illinois

Are you a small-town or rural resident looking for affordable mortgage options in Illinois? Town and Country Bank is proud to be an approved lender for the USDA's Rural Development Home Loan program. We believe in the USDA's mission of making home ownership more affordable and accessible to low and moderate-income families in our state's rural areas. Keep reading to learn more about eligibility for a Rural Development Single Family Home Loan, and how to start the application process. If you have questions, our experienced mortgage lenders are here to help.

What is the USDA Rural Development Loan Program?

The United States Department of Agriculture's Rural Development Single Family Home Loan Guarantee program helps low to moderate-income families in eligible rural areas. Approved lenders receive a 90 percent guarantee on every USDA loan they make. This reduces their risk and makes it possible to offer 100 percent loans to rural homebuyers who meet the program requirements.

For eligible rural homebuyers in Illinois, the no-money-down USDA Rural Development loans can be used to purchase an existing home or build a new residence in a designated USDA Rural Development area. However, this program isn't limited to farming communities. Many areas approved by the RHS for the USDA Loan program are residential areas, near major cities.

What are the Requirements for USDA Development Loans?

In order to qualify for the Department of Agriculture's Single Family Home Loan program, applicants must meet income requirements. These vary by state, county and family size; for example, in Sangamon County, IL, where Town and Country Bank's Springfield headquarters is located, the maximum adjusted household income for a family of four is $90,300. In Macon County, the income limit for a four-person family is slightly lower: $82,700. You can verify your household income eligibility online. You'll need to answer questions about the number of adults and children in your house, annual childcare expenses, monthly household income, and more.

Once you've established income eligibility, the next step is to check your property address. Simply type it in and you'll get a yes or no answer on eligibility. If the address doesn't qualify, the map will show you the areas that are and are not eligible. This can be helpful for home buyers who are still looking for property. If a potential house doesn't qualify, you can move your search to a different, qualifying community. The same thing goes for buyers who wish to purchase land to build on. 

Additional Rules and Qualifications

• Citizenship Status: S. Citizen, U.S. non-citizen national, or Qualified Alien
• Primary Residence: Must commit to personally living in the property
• Federal Program Eligibility: Cannot be suspended or debarred
• Credit Worthiness: Documented ability to meet credit obligations

What can USDA Rural Development loans be used for?

• Finance the purchase of an existing home.
• Closing costs and other standard expenses associated with a home purchase.
• Refinance an eligible home loan.
• Renovations and equipment purchases for the accommodation of a household member with a physical disability.
• Prorated real estate taxes due at closing
• Hazard and/or flood insurance premiums
• The purchase and installation of energy efficient equipment/features.

What are the benefits of the USDA Home Loan Program?

Families who live in rural Illinois with a low-to-moderate income may experience limited access to mortgage financing. The USDA's Rural Development Administration encourages lenders to offer affordable home loans to eligible buyers by reducing their risk. Both individual families and rural communities benefit from increased rates of homeownership, which builds wealth and improves the quality of life. With a USDA Guaranteed Single Family Home Loan, you can benefit from:

• No down payment
• 100 percent USDA Loan Financing
• Low Monthly Mortgage Insurance
• Flexible Credit Approval
• Secure 30-year fixed-rate mortgage
• Unlimited Seller Assistance with Closing Costs

What programs are available in the Central Illinois region?

The Single Family Housing Guaranteed Loan Program in Illinois is the most widely used homeownership program among rural residents looking for a no down payment mortgage. Another option is the IHDA Mortgage program from the Illinois Housing Development Authority. As with USDA loans, eligibility for an IHDA Mortgage is based on household income (and other factors). While there is a purchase price limit, there are no restrictions on the location of the home.

The Application Process

Applying for a USDA Home Loan is similar to applying for any of our mortgage loans. You'll need to provide documentation of your credit history, source of income, taxes, current debts, and other financial information. Our mortgage lenders will work one-on-one with you during the application and underwriting process to ensure a smooth and efficient journey from application to closing.

Get Started or Learn More About Rural Development Guaranteed Housing Loans!

Town and Country Bank is a top housing lender in our market. We have extensive experience getting borrowers to closing, especially when it comes to government loan programs. From start to finish, we provide friendly, professional service to help you find the best loan option and get to closing in 30 days or less. Contact our mortgage lending team to learn more about USDA loans and loan rates in Central Illinois and the Metro East or start the application process. You can also browse the full range of home loan options we offer.