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Decatur, Illinois FHA Home Loans

FHA Home Loan Information and Programs in Decatur, Illinois
2019 Loan Limits - Program Options - Loan Requirements - FHA Process

FHA Home Loans in Decatur, IL

FHA loans provide an excellent opportunity to buy a home in Decatur, Illinois.  The FHA (Federal Housing Administration) was created to give the average American a chance at owning their own home.  FHA loans provide home financing to many that might not otherwise qualify for a conventional mortgage.  Many people think of FHA loans as being synonymous with first time home buying.  While they are certainly a great choice for first time home buyers, they are also a great option for a repeat home buyer, as well as current homeowners who need to refinance their mortgage.

2019 FHA Loan Limits in Decatur, Illinois:

The city of Decatur is part of Macon County, which has maximum 2019 FHA loan limits of:

  • 1 unit (single family)– $314,827
  • 2 units (duplex) – $403,125
  • 3 units (triplex) – $487,250
  • 4 units (fourplex) – $605,525

The above numbers represent the absolute highest loan amounts allowed for FHA financing in Decatur.  If you are in need of a larger loan amount, we have other loan products that may be suitable for you, including jumbo loans offering up to $2,000,000.  As far as the minimum loan amount, we only will provide financing for $90,000 or higher.  You may find other Decatur FHA lenders that provide lower loan amounts, but we have a $90k minimum loan amount (regardless of the number of units).

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FHA Mortgage Programs Available in Decatur, IL:

Every type of FHA loan that exists is available in Decatur.  This includes all of the following options and loan products:

  • FHA First Time Home Buyer Loans – Many consider FHA loans to be the “go to choice” for first time home buyers being that they are much easier to qualify for compared to conventional loan products, or VA and USDA loans which are restricted to veterans (VA) and rural properties (USDA).  FHA loans also only require a 3.5% down payment, and allow down payment assistance to be used, adding to their attractiveness.
  • FHA Repeat Buyer Loan – While FHA is great for first time home buyers, it is not limited to them.  Many second time buyers, or even people buying a home for the third or fourth time will use FHA financing.  This is largely the result of the easier qualification guidelines and low down payment option.
  • FHA 203k Rehab Loan – Want to rehab a property in Decatur?  FHA 203k loans may be the perfect loan option for your renovation project.  The 203k program allows a borrower to receive funding in addition to the purchase price which can be used towards renovation projects.
  • FHA Back to Work Program – For those who have experienced the unfortunate situation of a job loss, resulting in a foreclose or bankruptcy, the FHA Back to Work Program offers an opportunity to own a home again.  This special home buying program for extenuating circumstances allows someone with otherwise decent credit history to buy a home again after just 1 year after a foreclosure or bankruptcy.  This is a special opportunity considering all other loans require a 2 or 3 year waiting period.
  • FHA Energy Efficient Mortgage – Also known as the “FHA green mortgage”, the FHA EEM provides financing for enhancements to a home that will allow it to save on energy costs.  This includes various enhancements related to insulation, furnaces, cooling systems, floors, ceilings, windows, and other cost saving improvements.
  • FHA Streamline Refinance – Already have a FHA loan?  Streamline refinance your mortgage and efficiently reduce your interest rate and monthly payments with the FHA streamline loan.  The streamline program does not require a new appraisal, credit check, or income documentation.  It is a simple and economical method of reducing your mortgage payment efficiently.
  • FHA Cash Out Refinance – FHA loans enjoy the highest LTV ratios available for a cash out refinance.  While conventional mortgages only allow 80% LTVs, FHA loans allow up to a 85% loan-to-value.  On a $200,000, this means you can refinance and take cash out to a loan amount of $170,000.  Aside from VA loans (only available to veterans), no other cash out loan allows this high of a loan-to-value ratio.

Would You Like to Get Prequalified or Apply For a FHA Loan Now?
Click Here to Get Pre-Approved for a FHA Loan

FHA Loan Eligibility Requirements

The standard requirements for FHA mortgages are the same regardless of program, with the only exception being the FHA streamline refinance which requires no documentation, no appraisal, or credit check.  For home purchase loans, cash out refinancing, and renovations loans, the basic requirements include all of the following.  Depending on your particular application and the type of FHA loan you need, you may be required to provide additional documentation or meet other conditions.

  • Credit Score – To qualify for the 3.5% down payment, you must have a 580 credit score or higher. If your credit score is between a 500-579, you still may qualify for an FHA loan, but will be required to put 10% down.
  • Credit History – In addition to your credit score rating, there are other credit history requirements, such as no bankruptcies or foreclosures in last 3 years.
  • Debt-to-Income – You can not have a debt-to-income ratio higher than 43%.  However, if you have “compensating factors” you might be able to get approved with higher debt levels (a compensating factor could be more money in savings, longer job history, or great credit).
  • Financial Statements – You must provide bank statements, pay stubs, and tax returns. Generally, your two most recent bank statements, two most recent pay stubs, and last 2 years of tax returns.
  • Property Requirements – The home you want to buy must not have any hazardous conditions or materials. If the home is in bad shape and needs repairs, it might qualify for a FHA 203k rehab loan. For a standard FHA loan, the home must be move in ready though, and the appraisal of the property must specify conditions which will inform the underwriter if it is ready to be moved into.
  • Owner Occupied – Must occupy the home yourself and it must be your primary residence.  FHA loans are not allowed to finance an investment property.

Some other requirements are that you must not already have a FHA loan. You can only have one FHA loan at a time.

FHA Loan Pros and Cons

  • Pros: Low down payment, easier to qualify for than conventional loans, assumability, and streamline refinancing.
  • Cons: Costly mortgage insurance premiums, not available for investment properties, and low loan limits in certain areas.

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Property State

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 Purchase Refinance

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