What To Know About USDA Rural Development Loans in IL

Are you a small-town or rural resident looking for affordable mortgage options in Illinois? Town and Country Banc Mortgage Services, Inc. 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 (USDA) Rural Development Loan Program helps individuals and families purchase housing in rural areas. The program aims to support rural economies and improve the quality of life for the rural population of the United States, particularly as these communities recover from the impacts of the pandemic and seek to reduce the negative effects of climate change.

Eligibility for the program is based on income and varies based on the property's geographic location. Qualifying individuals and families can usually buy a single-family home with no down payment in a designated USDA Rural Development area and benefit from no down payment, 100 percent financing, low monthly mortgage insurance, and a fixed mortgage rate.

What are the Requirements for USDA Development Loans?

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, and 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 on the USDA Rural Development website, 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, which can be helpful for home buyers who are still looking for property.

Under the current administration, priority points have been introduced to further determine eligibility for funding. These points can raise a property's score, which gives it a better chance of being approved for a USDA Rural Development loan. Priority points are generally awarded to properties that are:

• Located in one of the top 10% of counties impacted by COVID-19
• Located in or serving a community with a 0.75 or above score on the CDC Social Vulnerability Index
• Located in or serving a fossil-fuel-dependent community (e.g. coal, gas, oil, or power plant) whose economic well-being is considered to be in the most distressed tier

Taking steps to provide climate-impactful improvements toward clean energy and pollution mitigation in their community.

Additional Rules and Qualifications

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

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. Our experienced team of lenders provides 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.