Illinois FHA Loan Requirements 2026
FHA loan limits for Illinois, credit score and down payment rules, mortgage insurance costs, and how FHA financing compares to conventional loans in the Illinois housing market.
Illinois FHA Loan Limits (2026)
FHA loan limits are set by HUD and track a percentage of the conforming loan limit. Unlike many states, Illinois is uniform — every county carries the same FHA limit, with no high-cost designations anywhere in the state.
| Property Type | 2026 FHA Limit (all Illinois counties) |
|---|---|
| Single-family (1-unit) | $541,287 |
| 2-unit | $693,050 |
| 3-unit | $837,700 |
| 4-unit | $1,041,125 |
Illinois has no FHA high-cost counties. The single-family limit of $541,287 applies statewide — the same in Cook County (Chicago) as in every downstate county. Confirm your county at HUD’s official FHA Mortgage Limits lookup tool.
FHA Requirements in Illinois
| Requirement | FHA Standard | Illinois Notes |
|---|---|---|
| Minimum credit score (3.5% down) | 580 | Many Illinois lenders add a 580–620 overlay |
| Minimum credit score (10% down) | 500 | Limited lender options below 580 |
| Minimum down payment | 3.5% | Can be covered by IHDA down payment assistance |
| Maximum DTI | 43% (up to ~50%) | Higher DTI possible with strong compensating factors |
| Loan limit (statewide) | $541,287 (1-unit) | Same in every Illinois county |
| Upfront MIP | 1.75% of loan | Financed into the loan or paid at closing |
| Annual MIP (most loans) | 0.55%/year | For a 30-yr loan with <10% down |
| MIP duration (<10% down) | Life of loan | Key FHA disadvantage vs. conventional |
| Property requirement | Primary residence | Must be owner-occupied within 60 days |
FHA Mortgage Insurance (MIP)
Every FHA loan carries two mortgage insurance premiums: an upfront premium of 1.75% of the loan amount (which can be financed into the loan), and an annual premium — 0.55% for most 30-year loans with less than 10% down — paid monthly.
Example on a $335,000 purchase with 3.5% down (a ~$323,275 loan): the upfront MIP is about $5,657 (financed), and annual MIP at 0.55% adds roughly $1,778 per year, or about $148 per month. With less than 10% down, MIP lasts the life of the loan; with 10% or more down, it drops off after 11 years. Many borrowers later refinance to a conventional loan at 20% equity to remove it.
FHA vs. Conventional for Illinois Buyers
| Factor | FHA | Conventional |
|---|---|---|
| Min credit score | 580 | 620 |
| Min down payment | 3.5% | 3–5% |
| Mortgage insurance | Life of loan (if <10% down) | Cancels at 20% equity |
| IHDA DPA compatible | Yes | Yes (HFA options) |
| Best for Illinois buyers | 580–679 credit, limited savings | 680+ credit, stable income |
