Current FHA guidelines, updated from one source.
Every figure in this block comes from one guideline source built on HUD’s handbook and updates here when the rules change. These are purchase terms; refinance leverage and the seller-contribution limit are summarized under the ladders.
Up to 96.5% loan-to-value on a purchase
The purchase leverage is 96.5% loan-to-value, which means the buyer brings a 3.5% minimum investment on the lesser of price and value; closing costs are separate, and sellers may help with those.
Decision score for maximum financing
Eligibility for the full 96.5% leverage starts at a 580 decision score; the score is read as the lowest middle score among the borrowers, and the file is qualified on the whole picture rather than the score alone.
Plus 0.50%–0.55% a year on most thirty-year loans
FHA mortgage insurance has two parts: 1.75% upfront, which is added to the loan, and an annual premium of 0.50%–0.55% on most thirty-year loans, charged monthly; the ladder below shows the schedule by loan size, leverage, and duration.
Housing and total debt, manual reference
The manual-underwriting reference ratios are 31/43 for housing and total debt; with documented compensating factors the ladder below stretches them, and automated underwriting commonly allows more than the manual reference.
| Decision score | Housing / total | Compensating factors |
|---|---|---|
| 500–579 or no credit score | 31% / 43% | not applicable — ratios may not exceed 31/43 (energy efficient homes 33/45) |
| 580 and above | 31% / 43% | no compensating factors required (energy efficient homes 33/45) |
| 580 and above | 37% / 47% | one of: verified and documented cash reserves; minimal increase in housing payment; residual income |
| 580 and above | 40% / 40% | no discretionary debt |
| 580 and above | 40% / 50% | two of: verified cash reserves; minimal increase in housing payment; significant additional income not reflected in effective income; residual income |
| Base loan | Leverage | Annual premium | Duration |
|---|---|---|---|
| Standard base loan amounts | at or below 90% LTV | 0.50% | 11 years |
| Standard base loan amounts | above 90% to 95% LTV | 0.50% | mortgage term |
| Standard base loan amounts | above 95% LTV | 0.55% | mortgage term |
| Larger base loan amounts | at or below 90% LTV | 0.70% | 11 years |
| Larger base loan amounts | above 90% to 95% LTV | 0.70% | mortgage term |
| Larger base loan amounts | above 95% LTV | 0.75% | mortgage term |
Refinances: rate-and-term to 97.75% loan-to-value on a home occupied for the past year; cash-out to 80% after twelve months of ownership and occupancy; streamline refinances of an existing FHA loan without an appraisal. Sellers and other interested parties may contribute up to 6% of the price toward closing costs; the entire minimum investment may be a gift.
Current FHA snapshot · updated October 1, 2026 · owner-occupied principal residences, one to four units · county loan limits apply — ask a Lendmire loan officer for the limit where you are buying · FHA loans are assumable · Lendmire is not affiliated with FHA or HUD.
Program guidelines only, not an offer of credit. The minimum investment, decision-score tiers, mortgage insurance premiums, qualifying ratios, and refinance leverage on this page are FHA parameters and lender overlays subject to change without notice and to full underwriting of the borrower and the property. Nothing here states a rate, a payment, a cost, or a loan limit; those are provided in writing by a licensed Lendmire loan officer. Licensed for consumer mortgage lending in sixteen states. Lendmire is not affiliated with FHA, HUD, or the federal government. Lendmire, LLC, NMLS #2371349. Equal Housing Opportunity.
What an FHA loan is — and how the file is qualified.
An FHA loan is a conventional-looking mortgage with a federal insurance policy attached: HUD insures the lender against loss, and in exchange the program sets the minimum investment, the credit rules, the premiums, and the ratios. The four cards below cover each piece as it applies to a Livonia file.
For the program overview, see Lendmire’s FHA loan program, or the statewide guide at FHA Loans in Michigan.
The minimum required investment
HUD requires the buyer to invest a set share of the lesser of the price and the appraised value; the loan covers the rest. On a Livonia purchase the investment can be the buyer’s own savings, a gift from a family member or another acceptable donor, or approved secondary financing, and closing costs are separate from it.
The decision score sets the leverage
The decision score is the lowest of the borrowers’ middle scores. At the maximum-financing threshold and above, a Livonia buyer reaches the full purchase leverage; HUD allows lower scores at reduced leverage, but the wholesale programs behind these pages start at the threshold, so that is the practical floor.
Two premiums: upfront and annual
Mortgage insurance is the price of the leverage. HUD sets both premiums by schedule rather than by credit score, which is why a Livonia buyer with a modest score pays the same premium as one with a strong score; a conventional loan with private insurance prices the score, which is the comparison worth running.
Qualifying ratios and compensating factors
Effective income is the income the lender can document as stable and likely to continue, and the ratios are measured against it. A Livonia buyer with a modest score is held to the base ratios; above the maximum-financing score the compensating factors open the higher tiers.
This is the same arithmetic the lender runs on a Livonia file. The moving parts are the price, which the appraisal may lower, the down payment, which can be a gift, and the rate, which the lender sets at lock; the premium schedule does not move.
Where Livonia’s first-time and moderate-income buyers shop — and how FHA fits.
The Census figures below are the Livonia backdrop for an FHA loan: ownership, value, and income. They are context for sizing, not inputs to a credit decision, which rests on the appraisal and the file.
Citywide figures provide general market context, not an appraisal or an income calculation. Household income matters for the ratios, value for the investment and the premium, and the county limit for the ceiling; the Census tells you the market, the file tells you the loan.
Data sources: U.S. Census Bureau — ACS 5-Year (2024) housing and population estimates, including tenure, home values, gross rents, and household income.
Distinct Livonia neighborhoods, distinct FHA files.
Six Livonia neighborhoods, six FHA pictures: the cards below describe the housing stock, the price range, and the program question that comes up most in each.
Established close-in neighborhoods
In Livonia’s established neighborhoods the appraiser’s condition findings matter as much as the value. Buyers who expect required repairs negotiate them into the contract early and keep the file moving. On a home at Livonia’s median value, the FHA minimum investment comes to about $9,800 — the cash the program asks a buyer to bring before closing costs.
Newer infill and recent construction
On newer construction in Livonia the FHA appraisal is usually uneventful; the program questions are the county limit and whether the ratios carry the price once the upfront and annual premiums are added to the payment. The median owner-occupied home value in Livonia runs near $281,100 on the latest Census estimate.
Two-to-four-unit homes
Livonia duplexes and small multi-unit homes are FHA purchases at the same minimum investment as a house when the buyer occupies one unit. Rental income from the other units counts within HUD’s rules, and three- and four-unit homes face a self-sufficiency test on the rents. Livonia counts a population near 94K within the Detroit-Warren-Dearborn, MI area.
Condominiums and townhomes
A Livonia townhome or condominium is a routine FHA file once the project question is answered. Approved projects and single-unit approvals both work; a project with neither sends the buyer to a conventional loan. Roughly 33,424 Livonia households own their homes on the latest Census estimate — 87% of all households, the pool an FHA purchase joins.
Higher-value homes
The higher-value Livonia file is a limit question, not an eligibility question. The county limit caps the loan amount, and the buyer either adds investment to fit under it or chooses the conventional route for the whole purchase. Median household income in Livonia sits near $98,460 on the latest Census estimate.
Historic districts
A historic Livonia home is eligible like any other, with the appraiser’s condition findings as the usual detour. Buyers and sellers who expect them settle the repairs in the contract rather than at the closing table. About 13% of Livonia’s households rent — roughly 4,924 renter households on the latest Census estimate.
Neighborhood changes the price and the property type, not the rules: the minimum investment, the premiums, the decision score, and the ratios apply the same way on every Livonia street, and the county limit caps the loan everywhere in the county.
Four ways Livonia buyers put an FHA loan to work.
Because FHA insures the lender, it fits the Livonia borrower who has the income for the payment but not the profile a conventional loan asks for. Four examples follow.
Refinance an existing FHA loan
An existing FHA loan in Livonia can be refinanced on its own record: the streamline path skips the appraisal and most of the documentation, and the rate-and-term path with an appraisal reaches higher leverage when cash to close or equity matters.
Buy a first home with the minimum investment
The most common Livonia FHA file: a buyer with steady income, a modest down payment that may be a gift, and a decision score at or above the threshold for maximum financing. The seller can help with closing costs, and the ratios allow for a documented compensating factor.
Take cash out of a home with equity
An FHA cash-out refinance lets a Livonia owner who has lived in the home for the past year borrow against equity up to the program’s cash-out leverage, with the upfront and annual premiums applying to the new loan; a HELOC that leaves the first mortgage alone is the comparison worth running.
Buy a small multi-unit home and live in one unit
The multi-unit purchase is where FHA’s leverage does the most work: a Livonia buyer brings the minimum investment on a two- to four-unit property, occupies one unit, and qualifies with the rent from the others counted as HUD allows.
Estimate the FHA payment on a Livonia price before requesting a quote.
Use this to see what a Livonia FHA purchase costs each month at the program’s leverage: it applies the upfront premium to the base loan, the annual premium for the term and leverage, and the escrows, then measures the ratios against any income you enter. The rate is the weekly Freddie Mac average, editable, and not a quote.
Livonia FHA payment estimate
Seeded from Livonia’s median value at the program minimum; every field is editable and the result updates as you type.
Editable benchmark: 7.03% as of September 24, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not an FHA loan quote.
Illustrative starting assumptions: a $280,000 price near Livonia’s median owner-occupied home value (kept where an FHA loan is realistic in most counties), the FHA minimum investment as the down payment, a thirty-year term at the current Freddie Mac benchmark, property taxes and insurance estimated for Michigan (U.S. Census Bureau). Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not an FHA loan quote; your rate is set by the lender at lock. FHA mortgage insurance follows HUD’s published schedule for the term, leverage and loan size entered; taxes, insurance and dues are editable estimates; closing costs are not included; county loan limits are not checked here. Licensed in sixteen states for consumer mortgages. Lendmire is not affiliated with or acting on behalf of FHA, HUD, or the federal government.
Same buyer, three very different closings.
The right program depends on the decision score, the down payment, the eligibility for VA, and how long the buyer expects to keep the loan. Three options, side by side.
FHA, conventional with mortgage insurance, or VA.
A small minimum investment that a gift can cover, a forgiving decision score, ratios that stretch with compensating factors, and HUD insurance priced by schedule rather than by score. The annual premium on a full-leverage thirty-year loan lasts for the term; many borrowers refinance out of it later.
Conventional financing asks for a higher score and prices it, in exchange for insurance that can be cancelled and no upfront premium. The comparison is worth running for any Livonia buyer whose score sits above the agency norms. See Lendmire’s conventional loan program.
A Livonia buyer with VA eligibility rarely needs FHA: the VA loan carries no down payment and no monthly insurance, and the funding fee is the only program cost. FHA is the fallback where entitlement is used up or the property does not fit. See Lendmire’s VA loan program.
The decision is rarely close once the profile is known. FHA tends to fit the modest score, conventional the strong score with equity to come, and VA nearly any file with eligibility. The comparison is run on the actual numbers, in writing.
What to prepare for a Livonia scenario review.
Most of this is standard mortgage documentation; have these ready for a Livonia review all the same.
This is a general preparation guide, not a universal checklist. The selected lender may request additional information based on the transaction, the property, the credit profile, and the income picture. Nothing here is legal or tax advice.
Local details that can change the loan.
The program’s percentages are only part of the answer; these are the details that decide what a Livonia FHA file actually becomes once the appraisal and the credit report arrive.
Use these checks to keep the Livonia file clean and fundable.
Three checks before the review keep a Livonia FHA file on track: confirm the decision score, understand the mortgage insurance you will carry, and settle the property questions early.
- Confirm the score: a self-pulled score can land differently from the decision score.
- Know the premium: the exit from the premium is a refinance, not an equity threshold.
- Mind the ratios: the ratios are measured on effective income.
The decision score decides the leverage
The score the program uses is the lender’s, not an app’s. A Livonia file lands on maximum financing at the threshold shown in the snapshot, and the threshold is also where the compensating-factor ladder opens; below it the ratios are held to the base table.
How long the annual premium runs
On a thirty-year loan at full leverage the annual premium runs for the term; it ends after eleven years only when the loan started at or below ninety percent loan-to-value. A Livonia buyer at the minimum investment carries it until a refinance or payoff, which is why many plan a refinance later.
Ratios, compensating factors, and effective income
The ratios are measured on effective income, the income the lender can document as stable and likely to continue. A Livonia buyer above the base ratios needs a documented compensating factor, and a buyer below the maximum-financing score is held to the base table with no stretch.
Occupancy and the non-occupying co-borrower
Occupancy is a promise the lender documents and HUD enforces. A Livonia file with a non-occupying co-borrower keeps full leverage when the co-borrower is a family member and the home is a single unit; otherwise the leverage is reduced under HUD’s rule.
Seasoning after a credit event
Each event has its own waiting period under HUD’s rules and the exceptions are real: a documented hardship beyond the borrower’s control can shorten a bankruptcy’s seasoning. What the program does not forgive is recent housing lates, which weigh heavily on a Livonia file.
From a Livonia pre-approval to keys in hand.
An FHA file moves in a set order: pre-approval on the decision score and the ratios, the contract and the appraisal with HUD’s property standards, underwriting with any compensating factors documented, and closing with the premiums applied. The steps for a Livonia buyer follow.
Pre-approval
Start with the decision score, the income, and the down payment. A Lendmire loan officer confirms the leverage, the ratios, and the county limit, runs the FHA structure against conventional and VA on the same numbers, and provides the terms in writing.
Contract and appraisal
The appraisal is the FHA step that surprises buyers most: it reports on condition as well as value. Required repairs are negotiated with the seller, and a low value raises the investment; the Livonia contract is adjusted or the file moves on.
Underwriting
An automated approval follows the system’s finding; a manual file follows the ratio ladder. Either way, the Livonia underwriter verifies the income, the assets, the credit history, and the property, and issues the approval with its conditions.
Closing
The Livonia closing applies the program’s structure: the financed upfront premium, the monthly annual premium, and the escrow account. The buyer moves in within two months and keeps the home as a principal residence for at least a year.
A brokerage that matches the program to the buyer.
A brokerage sees several wholesale programs and all three government and agency routes; a single lender sees its own. For a Livonia buyer that difference shows up in which program is recommended, because Lendmire runs them side by side and says which one costs less.
Three programs, one set of numbers
The comparison on this page is run for real on every Livonia file: the FHA structure next to conventional with private insurance and, where eligibility exists, VA. The written terms follow the comparison.
The premium explained before the offer
No Livonia buyer should learn at the closing table that the premium lasts for the term. The loan officer walks through the upfront premium, the annual premium, and the duration for the leverage chosen, and shows the conventional alternative on the same numbers.
Licensed, consumer-purpose, in writing
The parameters on this page are HUD’s and the wholesale overlays’; the terms for a specific Livonia loan come from a licensed loan officer, in writing, after the review. Lendmire is a broker, never the lender, and not affiliated with the federal government.
Trusted by first-time buyers & families alike.
Livonia FHA loan FAQs
Plain answers to the questions Livonia buyers ask most about FHA loans, in the order they usually ask them.
What is an FHA loan, and who is it for?
A government-insured mortgage for a principal residence. The insurance is what allows the small investment and the forgiving score; the borrower pays for it through an upfront premium and an annual premium. It fits the Livonia buyer with a modest down payment or a credit profile that is still being built.
How much do I need to put down on an FHA loan in Livonia?
The investment is the program’s minimum, applied to the lesser of price and appraised value. Putting down more lowers the premium’s duration: a loan that starts at or below ninety percent leverage sees the annual premium end after eleven years.
What credit score do I need for an FHA loan?
The score for maximum financing is in the snapshot. More useful than the number is what sits around it: no usable score can still qualify on non-traditional credit, and a score below the compensating-factor threshold holds the ratios to the base table.
How does FHA mortgage insurance work, and how long do I pay it?
Upfront and annual. The upfront premium is financed; the annual premium is monthly and depends on the term, the leverage, and the loan size. At the minimum investment on a thirty-year loan it stays for the term, which is why many Livonia borrowers plan to refinance into a conventional loan later.
What is the FHA loan limit in Livonia?
FHA caps the loan amount by county and by unit count, and the caps change every year, which is why this page does not quote a figure. A Lendmire loan officer confirms the current limit for the county where you are buying before an offer is written; a purchase above it needs a larger investment or a conventional loan.
What does an FHA appraisal check?
Both the value and HUD’s property standards. Peeling paint, roof damage, missing handrails, or a failed system can bring required repairs, usually settled by the seller before closing on a Livonia purchase.
Do I have to live in the home to use an FHA loan?
FHA insures owner-occupied homes only. Occupancy is documented at closing and expected to last at least a year; a non-occupying co-borrower is allowed, but someone on the loan has to live in the Livonia home.
What debt-to-income ratio does FHA allow?
FHA’s ratios are a ladder rather than a single cap, and the snapshot shows every rung with the factor that opens it. An automated approval can exceed the manual table; a manual file follows it exactly.
Is an FHA loan assumable?
Assumable, yes, after the lender approves the buyer taking over the loan. The original borrower should ask for a release of liability at the assumption.
Can the seller pay my closing costs on an FHA loan?
Within the program’s limit, a seller can pay most or all of the closing costs. That is how many Livonia FHA purchases close with cash to close near the minimum investment alone.
The Livonia FHA file, built on HUD’s rules and explained plainly.
Request a Livonia scenario review to confirm the decision score, the premium schedule, and the loan the program supports. Lendmire is a broker, licensed in sixteen states for consumer mortgages, and never the lender.
This guide covers Livonia — for the statewide guidelines, markets, and scenarios, see FHA Loans in Michigan, part of Lendmire’s FHA loan program.
Nearby markets in Michigan: Detroit · Warren · Sterling Heights · Lansing · Grand Rapids
Related programs: Down Payment Assistance · FHA 203(k) Rehab Loans · Conventional Loans