HUD, the parent of FHA, has increased FHA loan limits in Chicago for six consecutive years due to rising home prices. HUD has again increased FHA loan limits. Here are the updated FHA loan limits for 2024. FHA loan limits in Chicago and surrounding areas have been increased to $492,257 in non-high-cost areas for single-family homes. Home prices in Chicago and surrounding suburbs continued to increase without any sign of a housing correction. The FHA floor will increase from $472,030 to $498,257 for 2024 in single-family home loans in standard median priced counties throughtout the United States.
| Property Size | Low-Cost Area | High-Cost Area | Alaska, Hawaii, Guam, U.S. Virgin Islands |
| One Unit | $492.257 | $1,149,825 | $1,724,725 |
| Two Units | $637,950 | $1,472,250 | $2,208,375 |
| Three Units | $771,125 | $1,779,525 | $2,669,275 |
| Four Units | $958,350 | $2,211,600 | $3,317,400 |
The floor amount is the lowest the FHA loan limit can be for any area of the country with average standard median housing prcies. FHA’s ceiling loan limits, the maximum loan amount the agency will insure, will increase from $1,089,300 to $1,149,825 for a single-family homes. The ceiling rises even higher to $1,724,725 in Alaska, Hawaii, Guam and the U.S. Virgin Islands. The housing market in Chicago and its surrounding suburbs have been bullish for the past several years. However, homes in Chicago and its suburbs have never increased as they did in 2022 and 2023. Buying homes over the list prices were becoming the norm in early 2021. The minute a home was listed on the MLS, dozens of homebuyers showed interest, and the home was normally under contract within a few days with a higher-than-list price. It is no doubt a seller’s market in Chicago and its surrounding suburbs.
FHA and The FHFA Increases Loan Limits For 2024 to Stabilize the Housing Market
HUD and the FHFA increase FHA and conforming loan limits every year so homebuyers are not priced out of the market. Without HUD and the FHFA not keeping up with the price of the housing market, many homebuyers would be priced out of the housing purchase market. HUD follows the Federal Housing Finance Agency’s (FHFA) lead on loan limit increases every year.
The Federal Housing Finance Agency has increased conforming loan limits for the past 8 years due to skyrocketing home prices. Chicago and its 6 surrounding counties have always had higher FHA loan limits than the rest of Illinois.
The city and state of Illinois have nothing to do with increasing FHA loan limits in Chicago. The U.S. Housing Administration is the federal government agency in charge of the administration, operations, and regulations of the Federal Housing Administration and running the FHA loan program throughout the nation. Speak With Our Loan Officer for Mortgage Loans
2024 FHA Loan Limits In Chicago Increases
Many home buyers, especially home buyers in Chicago and the suburbs of Illinois ask What Are FHA Loan Limits In Chicago? The Chicagoland Area consists of Chicago and its surrounding suburbs, which are in six Counties of Northeastern, Illinois. According to HUD’s guidelines, a low-cost area is one where you can multiply the median home price by 115% and the product is less than $492,257. Similarly, a high-cost area is one where the median home price multiplied by 115% is greater than $492,257. The answer to what Is FHA loan limits In Chicago has often been often asked. This is because the rumors that FHA was increasing the FHA Loan limits nationwide went viral. We will answer the question what are the FHA loan limits In Chicago later in this article?
Home Prices in Chicago and Surrounding Counties
Here are the six Counties of the Chicagoland Area and its suburbs in Northeast Illinois
- Cook County: Cook County, Illinois is where the city of Chicago, Illinois is in
- Lake County: Lake County, Illinois borders the state of Wisconsin
- Large cities such as Gurnee, Illinois, Fox Lake, Illinois, and Waukegan, Illinois are located
- Will County: Will County, Illinois is where large cities like Joliet, Illinois, Lockport, Illinois, New Lenox, Illinois, and Romeoville, Illinois are located
- DuPage: DuPage County, Illinois
- McHenry: McHenry County, Illinois
- Kane: Kane, County Illinois
FHA Loan Limits in Chicago and Suburbs
HUD normally had higher loan limits for Chicago and the six suburbs of Chicago, Illinois than other counties of Illinois. The current FHA loan limits in Chicago, as well as the surrounding Chicagoland and its six counties, have increased substantially for single-family homes and multi-family homes.
FHA Loans Limits in Chicago and Suburbs For 2024
Here were the FHA loan limits in Chicago and surrounding suburbs where the Cook, Lake, Will, DuPage, McHenry, and Kane Counties are:
- Single Family Home FHA Loan Limits In Chicago And Surrounding Suburbs of Illinois $492,257
- Two Unit Properties, FHA Loan Limits In Chicago And Surrounding Counties $637,950
- Three Unit Properties, FHA Loan Limits In Chicago And Surrounding Counties of Chicago $771,125
- Four Unit Residential Properties, FHA Loan Limits In Chicago And Surrounding Counties of Chicago $958.350
You can qualify and purchase a one to four-unit property for an FHA loan in Chicago and the Chicagoland Area with a 3.5% down payment and a 580 FICO Credit Score. Get Qualify for Mortgage Loans with 580 FICO Credit Score
2024 FHA Loan Limits in Chicago Same As The Increase For The Rest of The Country’s Average Median Home Prices
Chicago is the largest the state’s most populous city and the third most popular city in the United States. The city of Chicago is surrounded by six counties. FHA Loan Limits used to be substantially in the Chicago Metropolitan Area and surrounding counties than in the rest of Illinois. The following six counties are considered high-cost counties.
FHA Loan Liimits in Chicago Increases 8 Years in a Row
HUD has increased the 2024 FHA loan limits for areas with national median home prices are $92,257. The 2023 FHA loan limit was almost a $60,000 increase from the 2022 FHA loan limits. 2022 FHA loan limits in Chicago increased to $420,680 from the 2021 national standard $356,362 FHA loan limit. The Federal Housing Finance Agency increased 2024 conforming loan limits to $766,550 on single-family homes in counties with national median home prices. The ceiling in high-cost counties on both conforming and FHA loans is capped at $1,149,825.
Read more https://gustancho.com/fha-loans-chicago/
Qualifying For A FHA Loan In Chicago and The Surrounding Suburbs
What is an FHA Loan? Many first-time homebuyers often are not familiar with the mortgage loan process and rely on getting a home loan from the first mortgage lender they contact. The mortgage loan officer will often time offer different mortgage loan programs that they may qualify for or may just tell them that they qualify for only a particular mortgage loan program. Two of the most popular mortgage loan programs in the United States are the following mortgage loans:
- Conventional Loans
- FHA Loans
FHA Home Loans Explained
In this section, we will cover the basics of FHA loans. FHA loans are by far the most popular mortgage loan program out today. FHA loans are mortgage loans that are originated, processed, underwritten, and funded by private banks and mortgage bankers who are FHA-approved. FHA, the Federal Housing Administration, is a subsidiary of the United States Department of Housing and Urban Development and is not a mortgage lender. FHA is a governmental agency that insures mortgage loans to banks and mortgage companies that have originated FHA Loans that meet FHA lending guidelines.
How HUD Insures FHA Loans
FHA insures lenders in the event of borrower default on their FHA Loan and the home goes into foreclosure. In order for a HUD to insure the FHA Loan of a Lender who has a borrower that defaults on his or her loan, the lender that originates and funds the FHA loans needs to make sure the borrower has met all FHA Guidelines. Borrowers need to meet guidelines with respect to minimum credit scores, debt-to-income ratios, and other credit and income FHA mortgage guidelines.
2024 FHA Minimum Loan Requirements For Chicago
FHA sets its own rules and regulations which are called FHA mortgage lending guidelines. Minimum HUD Lending Guidelines are very lenient. The minimum credit score of 580 FICO credit scores qualifies for a 3.5% down payment home purchase. Homes that are eligible are only owner-occupied homes that are one to four units. Condominiums need the condominium complex to be FHA Approved. Manufactured homes need to be on fixed concrete foundations. Mobile homes do not qualify.
HUD Credit Score Requirements on FHA Loans With 500 FICO In Chicago
Homebuyers in Chicago can qualify for an FHA loan with credit scores down to 500 FICO. The borrower needs to get an approve/eligible per the automated underwriting system (AUS) or qualify for a manual underwrite. Manual underwriting applies. The key to getting automated approval via AUS is to have timely payments in the past 12 months. The key to getting approved for an FHA loan in Chicago is to have been timely in the past 24 months on all of their payments.
HUD DTI Mortgage Guidelines on FHA Loans
In this section, we will go over debt-to-income ratios on FHA loans. If your credit scores are 620 FICO or higher, the maximum back-end debt-to-income ratio allowed is capped at 56.9%. The maximum front-end debt-to-income ratios are capped at 46.9%. If your credit scores are under 620 FICO, then your debt-to-income ratio normally gets reduced to 43% DTI. Apply for Mortgage Loans with Low Credit Scores
Qualifying For FHA Loans After Bankruptcy In Chicago
Borrowers of FHA Loans can qualify for an FHA Loan after the following:
- Chapter 7 Bankruptcy
- Chapter 13 Bankruptcy
- Foreclosure
- Deed In Lieu Of Foreclosure
- Short Sale
However, there is a mandatory waiting period to qualify for an FHA loan after the above.
HUD Waiting Period Mortgage Guidelines After Bankruptcy And Foreclosure
Homebuyers in Chicago are eligible for FHA loans after meeting the waiting periods. To qualify for an FHA loan after bankruptcy and foreclosure, there is a two-year mandatory waiting period after a Chapter 7 bankruptcy discharge. To qualify for an FHA loan, you need re-established credit and no late payments after bankruptcy.
You can qualify for an FHA loan one year into a Chapter 13 Bankruptcy repayment period with trustee approval. There is no waiting period to qualify for an FHA loan after a Chapter 13 Bankruptcy discharge date.
There is a three-year waiting period after a foreclosure, deed-in-lieu of foreclosure, and short sale to qualify for an FHA loan The start date of the waiting period after foreclosure and deed in lieu of foreclosure is from the recorded date or the date of the sheriff’s sale. Not the date the keys were surrendered to the lender. The waiting period after the short sale starts from the date that is reflected in the short sale on the HUD Settlement Statement. Non-occupant co-borrowers are allowed. More than one non-occupant co-borrowers are allowed by the United States Department of Housing and Urban Development (HUD) to qualify for FHA loans. 100% of the down payment can be gifted by a family member.
What Are FHA Loan Limits In Chicago Versus Other Cities?
The FHA Loan Limits In Chicago Versus Other Cities remain the same because Chicago and its six counties of Cook County, Lake County, DuPage County, Will County, McHenry County, and Kane County have higher FHA Loan Limits than the rest of the counties in the state of Illinois. FHA Loan Limits In Chicago Versus Other Counties in Illinois are the following:
| Property Size | Low-Cost Area | High-Cost Area | Alaska, Hawaii, Guam, U.S. Virgin Islands1 |
| One Unit | $492,257 | $1,149,825 | $1,724,725 |
| Two Units | $637,950 | $1,472,250 | $2,208,735 |
| Three Units | $711,125 | $1,779,525 | $2,669,275 |
| Four Units | $958,350 | $2,211,600 | $3,317,400 |
What Are FHA Loan Limits In Other Counties of the Chicagoland Area
Here are the FHA Loan Limits In Other Counties Of Illinois:
- Single Family Unit $492,257
- Two Family Unit $637,950
- Three Family Unit $771,125
- Four Family Unit $958,350
FHA Lender With No Lender Overlays In Chicago and Suburbs
If you are a first-time homebuyer or home buyer and have more questions on What Are FHA Loan Limits In Chicago and are looking for a lender with no lender overlays, contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster. Or email us at alex@gustancho.com. The staff at Gustan Cho Associates is available 7 days a week, including evenings, weekends, and holidays. There are two sets of FHA Lending Guidelines. The main HUD Guidelines are the FHA Mortgage Lending Guidelines set by FHA. The second set of FHA Guidelines are mortgage lender overlays that each individual FHA mortgage lender sets that can far exceed the minimum FHA lending guidelines. The answer to the question is if all FHA Lenders have the same lending guidelines, the answer to that is no.
Read more https://gustancho.com/fha-loans-chicago/
HUD Agency Guidelines Versus Lender Overlays
Just because you meet the minimum FHA Lending Guidelines set by FHA does not guarantee you an FHA-insured mortgage loan by a lender. On the flip side, just because you are told you do not qualify for an FHA loan by a particular mortgage lender does not mean that you do not qualify for an FHA loan. For example, all you need to qualify for a 3.5% down payment FHA loan is a 580 FICO credit score. However, most mortgage companies and banks will not qualify you for an FHA Loan with a 580 FICO credit score. Many will require you to have a 640 FICO credit score or higher. This is called an FHA mortgage lender overlay on credit score. If you are told you do not qualify for an FHA loan because you do not have 640 FICO credit scores or higher, no worries. You may not qualify for an FHA loan with that particular lender, but that does not mean you do not qualify for an FHA loan. Qualify for a 3.5% down payment FHA loan is a 580 FICO credit score
FAQ Based on the Article About FHA Loan Limits in Chicago and Surrounding Suburbs:
- 1. What are the updated FHA loan limits for 2024 in Chicago and its suburbs? The updated FHA loan limits for 2024 in Chicago and its suburbs have increased, with the limit for single-family homes in non-high-cost areas set at $492,257. Different property sizes and areas have varying limits, with higher limits in high-cost areas and regions like Alaska, Hawaii, Guam, and the U.S. Virgin Islands.
- 2. How do FHA loan limits in Chicago compare to other cities? Comparatively, FHA loan limits in Chicago and its surrounding areas are higher than those in other counties in Illinois due to these regions’ unique housing market dynamics.
- 3. What are the qualification requirements for an FHA loan in Chicago? Qualifying for an FHA loan in Chicago involves meeting relatively lenient requirements. A credit score of at least 580 FICO is necessary to qualify for a 3.5% down payment. Borrowers must also meet debt-to-income ratio guidelines and other FHA mortgage lending criteria.
- 4. What are the waiting periods after bankruptcy, foreclosure, deed instead of foreclosure, and short sale to qualify for an FHA loan in Chicago? There are specific waiting periods to qualify for an FHA loan in Chicago after a bankruptcy, foreclosure, deed instead of foreclosure, or short sale. For a Chapter 7 bankruptcy discharge, there is a two-year waiting period. If filing for Chapter 13 Bankruptcy and making repayments, approval from a trustee must be granted, and the waiting period is one year. To qualify for an FHA loan in Chicago after foreclosure, a deed instead of foreclosure, or a short sale, it’s important to note that there is a waiting period of three years.
- 5. Are there FHA lenders in Chicago with no lender overlays? Yes, there are FHA lenders in Chicago with no lender overlays. These lenders strictly adhere to HUD guidelines without imposing additional requirements beyond the FHA minimums.
