FHA Loans in Michigan: Low Down Payment, Flexible Qualifying
FHA loans remain one of the most popular options for Michigan buyers. Learn about the 3.5% down payment, credit score requirements, and how FHA compares to conventional financing.
FHA loans are backed by the Federal Housing Administration and are designed to make homeownership more accessible. In Michigan, they are one of the most commonly used loan types — especially for buyers with limited savings or credit scores in the 580–620 range.
The minimum down payment is 3.5% with a 620+ credit score. Buyers with scores between 500 and 579 may still qualify with a 10% down payment. Debt-to-income ratios are more flexible than conventional loans, which helps buyers with student loans or other obligations.
FHA loans do require mortgage insurance — both an upfront premium (1.75% of the loan amount) and an annual premium paid monthly. For many buyers, the lower down payment and easier qualifying more than offset this cost.
FHA can be combined with MSHDA Down Payment Assistance, which makes it an even stronger option for buyers who need help covering the down payment and closing costs.
If you are weighing FHA versus conventional, the right answer depends on your credit score, down payment, and how long you plan to stay in the home. Let's run the numbers for your specific situation.