For home buyers
FHA Loans in Michigan
An FHA loan is insured by the Federal Housing Administration, which lets lenders accept lower credit scores and smaller down payments. What decides it is whether the mortgage insurance ever goes away, and the table below answers that.
- No credit pull to talk
- Licensed mortgage broker, NMLS 2041154
FHA Loan
Key benefits
Low Down Payment
A low minimum down payment with a credit score of 580 or higher.
Flexible Credit Requirements
500 to 579 is possible with a larger down payment. Past credit issues do not automatically rule you out; FHA sets waiting periods after a bankruptcy or foreclosure.
Refinance Options
FHA Streamline and FHA Cash-Out refinance programs may let you refinance or tap equity later, if you qualify at the time.
Assumable Later
When you sell, a qualified buyer can take over an FHA loan with the lender’s approval, which can matter to a buyer if rates have risen since you bought.
FHA or conventional: which one actually fits
Most people compare these two on the down payment and stop there. The down payments are almost the same. What separates them is whether the mortgage insurance ever goes away.
| What decides it | FHA | Conventional |
|---|---|---|
| Does mortgage insurance ever come off? | Not when the loan starts above 90% of the home’s value: then it stays for the life of the loan. At 90% or less, it drops after 11 years. | Borrower-paid mortgage insurance, yes: you can ask to cancel it once the balance reaches 80% of the home’s original value, and it ends automatically when the balance is scheduled to reach 78%, if your payments are current. |
| Lowest credit score that works | 580 with the low minimum down payment. 500 to 579 is possible with a larger one. | Usually 620, and pricing improves steadily above that. |
| Smallest down payment | Low, with a credit score of 580 or higher. | Also low, and lowest for first-time buyers or incomes at or under 80% of area median (HomeReady, Home Possible). |
| Upfront mortgage insurance | An upfront premium applies, usually added to the balance rather than paid at closing. | None. |
| How much debt you can carry | Up to 57% of income with an automated approval; manually underwritten files cap lower. | Generally up to 50%. |
| Condition of the house | The appraiser checks for safety and habitability. Peeling paint, a bad roof or missing handrails can hold up closing. | Appraised for value. Safety and soundness issues still have to be fixed; cosmetic items matter less. |
| Where it usually wins | Credit in the 500s or 600s, or a debt load a conventional file will not take. | Credit around 680 and up. FHA’s rate can be lower, but its mortgage insurance usually stays for the life of the loan, so over time it often costs more. |
Talk through which one fits me
Guidelines
Guidelines for this loan
What FHA lenders usually check. HUD sets the floor, and each lender can add its own requirements.
Primary Residence Only
The home must be your primary residence, not a vacation or investment property.
Read the guideCredit Score
HUD sets the floor and each lender sets its own minimum above it; pricing depends on the whole file.
Read the guideDTI Ratio
Debt-to-income ratios can reach 57% with an automated approval; manually underwritten files cap lower.
Read the guideClosing Costs
Listed line by line on your Loan Estimate; seller or lender credits can help offset them.
Read the guideMortgage Insurance
An upfront mortgage insurance premium applies, plus monthly premiums.
Read the guideOfficial sources
Check the rules at the source
Program guidelines change. These are the official pages we check them against.
Questions about this loan
If yours is not here, ask it on the call. There are no dumb questions.
Can I use an FHA loan if I have owned a home before?
Yes. While they’re especially popular with first-time buyers, FHA loans are available to anyone meeting the requirements, even repeat homebuyers.
Can my parents give me the whole down payment?
Yes. FHA allows 100% of your down payment and closing costs to come from gift funds, provided the donor is an approved source (family, employer, etc.).
What is an FHA Streamline Refinance?
It’s a simplified refinance option for borrowers with existing FHA loans. It usually requires no appraisal or income documentation, and it has to lower your payment or move you to a fixed rate, which FHA calls a net tangible benefit.
Can a parent co-sign if they will not be living with me?
Yes. FHA allows a co-borrower who will not live in the home, usually a family member, and their income and debts are counted alongside yours.
Can I buy a duplex and rent out the other side?
Yes, you can finance up to a 4-unit property with FHA, as long as you occupy one of the units as your primary residence.
Will I be stuck paying FHA mortgage insurance forever?
If the loan starts above 90% of the home’s value, yes: FHA mortgage insurance stays for the life of the loan. At 90% or less, it falls off after 11 years. The usual way out is refinancing to a conventional loan once you have around 20% equity, if you qualify at the time. Know that before you choose FHA, not after.
What is the FHA loan limit in Michigan?
For 2026 the FHA limit for a one-unit home is $541,287 in every Michigan county. A loan above that amount needs a different program, such as conventional or jumbo. Budget the tax line as the new owner too: The year after a Michigan home sells, its taxable value resets to half of the assessor’s market value, so the seller’s tax bill is not your tax bill. Estimate the tax for an address.
What our clients say
I got my FHA loan through Align Lending and Samantha helped a lot with her expert guidance.
Want to shout out Samantha for the expert guidance, made my first-time homebuyer experience seamless! It exceeded expectations and was a stress free process throughout. Grateful for all your help and loving my new home in Bloomfield Hills!
Samantha Shelton is amazing!! She helped me get into my first home in Ferndale. The closing process was easy I was able to take care of everything without taking a day off of work. Being a first time homebuyer was stressful but she provided clear communication and true experience guidance throughout the entire process
Individual experiences. Results vary.
Ask Samantha whether this loan fits
Bring your credit history, including anything you are worried about. Samantha will compare FHA with conventional on your numbers, mortgage insurance included.
- 1
Tell us what you are trying to do
Not what product you want. What you are actually trying to accomplish.
- 2
We look at your situation
Samantha works out what matters most for you specifically.
- 3
You leave with a plan
Your options, the tradeoffs, and your next step. No obligation to go further.
Start with your question
- First-Time Homebuyer
- Mortgage Readiness Review
- Homebuying Budget Review
- When does FHA mortgage insurance end?
Align Lending LLC, NMLS #2041154, is a mortgage broker. Samantha Shelton, NMLS 1647301. Equal Housing Opportunity. Licensed in Michigan, Ohio, North Carolina, Florida, Louisiana and Texas. Program guidelines on this page are general and change over time; they are not a credit decision, a preapproval, a commitment to lend, or an offer of credit. Approval depends on your full application, the property and the lender's current guidelines.
