Guide to VA Home Loans in Illinois | Best VA Mortgage Lenders in Illinois [2022]

VA Home Loans in Illinois–home loan programs for veterans, active-duty service members, and military spouses–are offered by mortgage lenders throughout the state. But if you want the best VA Home Loan option for your credit score and income, it’s important to do research on the best VA mortgage lenders in Illinois. 

Whether it’s a townhome in Chicago or you’re buying your first home in the Illinois country, VA Loans allow for more flexibility when you’re looking for a home that fits you and your families’ needs. 

What are VA Loans? 

VA Loans are a mortgage option that requires zero down payment. Active service, select military spouses, and veterans are some of the people who are eligible for this kind of loan. 

A common misconception is that the VA Loan is put together by the Department of Veterans Affairs. However, the beauty of a VA Loan is that they are put together by private lenders, and then guaranteed by the Department of Veterans Affairs. Created in 1944 by the United States government, the VA Loan was one of the initiatives which were intended towards the assistance of returning service members in the business of buying a home for themselves without depending on a down payment or great credit. 

To date, this game-changing loan program has resulted in more than 25 million houses for active-duty service members, veterans, and their families–and it’s more important than ever.

Illinois VA Loan Requirements 

While it’s not required, finding a VA mortgage lender in your state that offers a VA Home Loan can make the process simpler. Fortunately, lenders like Hero Loan offer VA Loans for states all across the country–including Illinois. 

From a standard VA Loan, to VA Streamline Refinance or VA Cash-Out Loan, there are many VA Home Loans offered by mortgage lenders in Illinois

To qualify for VA Loan benefits in Illinois, you need to know if you fulfill the VA Loan eligibility requirements or not. 

These include:

  • Duty status
  • Length of service
  • Character of service

For service members and veterans who are on active duty, their history of active-duty service should look like this:

  • At least 2 years if you are a regular service member
  • At least 6 years if you are a member of the National Guard or a Reservist
  • During times of war, at least 90 days of active-duty service
  • During times of peace, at least 181 days of active-duty service

Something that might affect the final decision is a service-related disability. Furthermore, interested veterans will need to apply or qualify for:

  1. Certificate of Eligibility (CEO): This document allows a lender to know that you satisfy either the military service or the surviving spouse requirements to be approved for the VA home loan that you’re looking for.
  2. Lending Requirements: While the qualifying guidelines vary from individual lender to individual lender, generally a credit score of around 620 is satisfactory, along with a debt to income (DTI) ratio of around 41% or lower. If you have more than enough residual income, exceptions to the DTI rule apply.

What is the VA loan limit in Illinois? 

As of January 2020, VA borrowers in Illinois with their full VA loan entitlement are not restricted by VA loan limits, which means you can borrow as much as a lender is willing to lend–all without a down payment. 

Veterans without their full VA loan entitlement are still bound to Illinois’ VA loan limits, which for all counties are $647,200 as of January 2022.  $647,200 is the standard VA loan limit across the country, but loan limits can rise in pricier housing markets and fall in more affordable areas. In high-cost counties, VA loan limits have reached $970,800. 

What is the minimum income for a VA Loan? 

One of the benefits of a VA Loan is that homebuyers using VA Loans aren’t required to reach any kind of income threshold to use the loan benefits. However, in order for the agreement to make sense to the lender, the borrower is expected to have:

  • A stable, reliable income that is sufficient to cover foreseen monthly expenses, like mortgage payments. 
  • Proof of income left over each month once necessary expenses are covered. The excess is needed to cover expected costs, like food, transportation, and other residual income requirements.

In terms of personal finance, residual income is the level of income an individual has after the deduction of all personal debts and expenses have been paid. The residual income calculation occurs monthly after paying all monthly debts. Simply put, you must make more money than you spend each month.

Note, the VA does not limit income: if you qualify for a VA Loan, you can receive it regardless of how much other income you’re making. 

Credit scores necessary for VA Loans 

The VA does not set a minimum credit score to receive a VA Loan, but it’s important to have good credit history to get the best VA Loan options from your mortgage lenders. Usually, a credit score of 620 and above is sufficient for VA Loan. 

VA Home Loans Benefits:

  • No down payment necessary
  • No private mortgage insurance (PMI) or mortgage insurance premiums
  • Average interest rates are lower
  • Absence of prepayment penalty
  • Lower closing costs
  • Large selection of purchase and refinancing options
  • For veterans who have entitlement remaining, VA Loans are reusable

VA Home Loans Disadvantages

  • The VA Loan funding fee might be higher in each subsequent use
  • Only viable for people associated with the armed forces of the country
  • VA Loans are not offered by all mortgage lenders

Steps to finding the best VA mortgage lender in Illinois

  1. Check your eligibility. Not all veterans and service members are eligible for a VA home loan. You must have served in the military for a certain amount of time and meet other requirements. You’ll be required to produce a Certificate of Eligibility which is dependent on total time of service and which branch you are in. At Hero Loan, we work with you every step of the way to obtain this paperwork and apply for your COE. But if you’ve already got it, that’s great!
  2. Get your documentation ready to go for your mortgage company, like tax documents, pay stubs, W2s, bank records, and more. Check out our handy guide on How to Acquire a VA Loan here.
  3. Compare lenders and what each respective lender is offering. 
  4. Choose the VA mortgage lender that suits your needs. 

As a direct-endorsed VA Lender, Hero Loan can close VA Loans in as little as 14 days–compared to most lenders that take up to 60 days. And you can get started with their 5-Minute Loan Approval* application right now! 

Best VA Mortgage Lenders in Illinois

There are many great VA mortgage lender options in Illinois, so here is a list of some of the best that offer VA Home Loans. 

Hero Loan

Hero Loan–one of the fastest growing lending platforms in the country–serves active- duty military, veterans, and their families to provide fast, personalized loan services.

As a direct-endorsed VA Lender, Hero Loan can close VA Loans in as little as 14 days–compared to most lenders that take up to 60 days. We underwrite all VA Loans in house, meaning lower mortgage rates and no upfront or out of pocket costs—that includes the appraisal. 

How It Works: 

Hero Loan has an enticing roster of loans and services that they offer. Apart from the standard VA Loan, some of these also include: 

  • VA Streamline Refinancing
  • Conventional Loan Refinancing
  • VA Cash-Out Refinancing 
  • FHA Loans

After you’ve made your choice, you can use the website to fill out a few preliminary details and apply for the loan or service that you have chosen. From there, a loan officer will be assigned to you who will take you through the minutiae and explain the details of the loan that you are about to borrow.

In addition, we’ll also help you get the all-important VA Loan Certificate of Eligibility and fill out all the VA paperwork for you. After you’ve sorted out the necessary details, all that remains for you to do is wait till the loan is closed. But don’t worry–with Hero Loan that takes as little as 14 days (compared to the standard two months)!

Pros: 

  • Complete all VA paperwork for clients 
  • Underwrite all VA Loans in-house
  • Can close VA Loans in as little as 14 days
  • No appraisal fees or out-of-pocket fees (we pay for appraisal) 

Cons: 

  • Services are for active-duty military, veterans, and their families only

The Home Loan Expert 

The Home Loan Expert keeps everything as hassle-free as possible when you’re trying to get a VA Loan in Illinois. They understand that the process of getting your first mortgage can feel like a lot, which is why they work to ensure that the process of getting your VA Home Loan is as straightforward and approachable as possible. 

In addition to VA Loans, The Home Loan Expert also offers Adjustable-Rate Mortgages, Bank Statement Mortgages, Cash-Out Refinances, Conventional Loans, Debt Consolidation, FHA Loans, a First Responder Program, and many more. You can see them all here. 

Pros: 

VA Interest Rate Reduction Refinance Loans and Cash-Out Refinancing options available

  • A robust Native American Direct Loan program at your disposal, if you need it
  • In case you need to accommodate a disability, house grants can be adapted
  • Includes a nifty VA Home Loan calculator, among others

Cons: 

  • You might be tempted to consider other types of loans from their varied roster, instead of the VA Home Loan that you wanted in the first place

Ready to learn more? To find out what rates you could qualify for, start 5-Minute Loan Approval* application right now!

Veterans United Home Loans

Veterans United Home Loans is a prime direct mortgage lender which specializes in VA mortgages in Illinois, but also offers FHA, USDA, conforming, and jumbo mortgages. You can choose between: 

  • VA IRRRL (Interest Rate Reduction Refinancing Loan), which is used to convert an ARM to an FRM, or to reduce the interest of the borrower
  • Cash-Out Refinance

Unlike many other lenders, Veterans United Home Loans allows you to apply for mortgage credit data, which is not your primary credit data. For instance, you could potentially show proof that you usually take care of your bills on time. This makes this particular lender a good option if you have a lower than optimum credit score.

Pros: 

  • Convenient application online or at a brick and mortar location
  • Has other loan options apart from VA Home Loans 
  • Can use alternative forms of credit (like utility bills) because you have a low or no credit score

Cons: 

  • No common loan types like the home equity loan, home equity line of credit loan, or construction loan
  • Customized rates are not available online

Carrington Mortgage Services

Founded in 2007 and headquartered in California, Carrington Mortgage Services is a fairly new entrant to the home loan game. Offering a special Carrington Mortgage Advantage to borrowers who have low credit scores and high DTI (debt to income) ratios, they have a small selection of loans and services. 

Carrington also offers a Prime Advantage program, which is targeted at people who have very satisfactory credit scores but miss qualifying for loans due to having old credit events. 

Loans & Services

  • Conventional Loans
  • FHA Loans
  • USDA Loans
  • VA Loans
  • Adjustable-Rate Mortgages
  • Carrington Flexible Advantage

Pros: 

  • Plenty of options for a variety of credit score groups
  • Detailed monthly payment calculator with provision for comparing loans

Cons: 

  • Low selection of loans and services
  • Not licensed to originate mortgages in Massachusetts and North Dakota

Minimum down payment:

Ranging from 3.5% down to 0% (for VA members)

Navy Federal Credit Union

Navy Federal Credit Union is a well-established institution that has around 200 branches throughout the US, as well as nine in overseas locations and on U.S. military bases. 

At Navy Federal, even if you have used up all of your VA Loan benefits, you might qualify for a Military Choice Loan. This is a 30-year mortgage with no minimum down payment.Check your eligibility. Not all veterans and service members are eligible for a VA home loan. You must have served in the military for a certain amount of time and meet other requirements. You’ll be required to produce a Certificate of Eligibility which is dependent on total time of service and which branch you are in. At Hero Loan, we work with you every step of the way to obtain this paperwork and apply for your COE. But if you’ve already got it, that’s great!

  1. Get your documentation ready to go for your mortgage company, like tax documents, pay stubs, W2s, bank records, and more. Check out our handy guide on How to Acquire a VA Loan here.
  2. Compare lenders and what each respective lender is offering. 
  3. Choose the VA mortgage lender that suits your needs. 

You will also be eligible for a VA Home Loan if you live with a Navy Federal member. You can qualify for Navy Federal membership even if you don’t fulfill the eligibility requirements for a VA Loan.

You might also qualify for a Homeowners’ Choice Loan, which is very similar to Military Choice. However, it’s made for people who are not eligible for VA Loans.

You will also be able to refinance your:

  • VA Loan
  • Conventional Loan
  • Military Choice Mortgage
  • Homeowners Choice Mortgage

Navy Federal’s website has an easy-to-understand interface with facilities for online pre-approval applications.

Pros: 

  • You can opt for a no-down-payment mortgage
  • You can choose to apply with alternative credit data
  • A smooth and simple online application process
  • More competitive rates than the others

Cons: 

  • Certain loans like the USDA, FHA, home equity, construction loans, home equity line of credit, and reverse mortgages are not available 
  • Membership is not easily available
  • Does not include a VA Home Loan calculator
  • You won’t be able to see the personalized rates before applying for the pre-approval process

NBKC Bank

Formerly National Bank of Kansas City, NBKC is a bank tailor-made for small businesses and individuals. Over the years, it has pushed online banking over physical banking and as a result has only four physical branches in the United States. 

Through its website, you have access to some useful tools like a detailed and layered mortgage calculator and a refinancing savings calculator. 

Loans & Services:

  • Conventional Loans
  • VA Loans
  • FHA Loans
  • Adjustable-Rate Mortgages
  • Jumbo Loans
  • New Construction Loans
  • Pilot Program

Pros: 

  • Slick and modern online experience
  • Good customer service

Cons: 

  • No USDA or mobile home loans
  • Only four physical branches in Kansas City.

Minimum down payment: 

Ranging from 3% down to 0% (for VA members)

Conclusion: Best Lender for VA Home Loans in Illinois? 

Out of all of the best mortgage lenders in Illinois, Hero Loan was built specifically to make the sometimes stressful VA Loan process easy. That’s why we complete your VA paperwork for you, help with your COE, pay your appraisal fees…and then close in as little as 14 days. 

All while answering any question you have about the entire process. Even though we’re one of the fastest growing lending platforms in the country, our loan officers all live within the communities they serve—meaning you’ll get the resources of a big-time lender with the service you’d expect from a local. And you can get started with your 5-Minute Loan Approval* application at Hero Loan right now!