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
A 3.5% minimum investment opens a purchase at up to 96.5% loan-to-value; the investment can be the buyer’s own funds, a gift from a family member or other acceptable donor, or approved secondary financing.
Decision score for maximum financing
The program opens at a 580 decision score for maximum financing; borrowers without a usable score are eligible under manual underwriting on non-traditional credit, and the ratios then follow the manual ladder below.
Plus 0.50%–0.55% a year on most thirty-year loans
1.75% upfront plus 0.50%–0.55% a year on most thirty-year loans is the price of the leverage; larger base loans carry a higher annual tier, fifteen-year loans a lower one, and the calculator applies HUD’s schedule to the figures you enter.
Housing and total debt, manual reference
Ratios are a ladder rather than a wall: 31/43 with nothing extra, more with one documented factor, and 40/50 with two. Borrowers below the maximum-financing score are held to the base ratios.
| 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.
Informational only; not a commitment to lend, an approval, or a quote. Every figure on this page is a program parameter read from Lendmire’s guideline source, built on HUD’s handbook, and may change without notice; eligibility, the loan amount, the premiums, and the ratios depend on the credit profile, the appraisal, the property, the county limit, and full underwriting. A licensed loan officer provides the terms for a specific loan in writing. Licensed in sixteen states for consumer mortgages. Lendmire is not affiliated with or acting on behalf of 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 Michigan file.
For the program overview, see Lendmire’s FHA loan program; for help with the minimum investment, the down payment assistance program.
The minimum required investment
The investment is calculated on the lesser of the purchase price and the appraised value, so a Michigan home that appraises below the contract price raises the cash the buyer brings. Gifts, the buyer’s own funds, and approved secondary financing all count toward it.
The decision score sets the leverage
FHA reads credit through the decision score, and the threshold for maximum financing is far below conventional norms. A thin file or a non-traditional credit history is not a bar: it is underwritten manually on rent, utilities, and other payment records, with the ratios held to the base table.
Two premiums: upfront and annual
The upfront premium is a share of the base loan, usually financed into the total. The annual premium is charged monthly and depends on the term, the leverage, and the loan size; on a thirty-year loan at full leverage it runs for the term, and ends after eleven years only when the loan started at or below ninety percent loan-to-value.
Qualifying ratios and compensating factors
Two ratios decide the payment the file supports: the housing payment alone, and the housing payment plus every other monthly obligation, each as a share of effective income. The ladder in the snapshot shows the manual tiers; the calculator shows where a Michigan scenario lands.
The calculator applies this to a Michigan scenario: enter the price and the down payment, pick the term, and the upfront premium, the annual premium for that leverage and loan size, and the escrows build the payment. Enter income to see the ratios.
Where Michigan’s first-time and moderate-income buyers shop — and how FHA fits.
Affordability in Michigan is a statewide picture made of local ones: values, ownership, and incomes differ from one market to the next, and each shapes the FHA files written there. The figures below come from the U.S. Census Bureau.
Statewide figures provide general market context, not an appraisal or an income calculation. Read these figures as the range of purchases in the market, not as a forecast of any one file. The lender appraises the specific home, documents the specific income, and applies the specific decision score.
Data sources: U.S. Census Bureau — ACS 5-Year (2024) housing and population estimates, including tenure, home values, gross rents, and household income.
Where Michigan’s FHA buyers shop — market by market.
Six Michigan markets, each with its own price picture and its own guide. The minimum investment, the decision score, and the premium schedule do not change from one to the next; the prices, the county limits, and the typical files do.
Detroit
Detroit holds one of the largest pools of owner households among Lendmire’s Michigan markets — roughly 129,895, about 50% of households — a metropolitan market where FHA financing is the everyday route into a first home. Census context: median value near $83,900, median household income near $39,938, population near 639K.
Grand Rapids
Grand Rapids holds one of the largest pools of owner households among Lendmire’s Michigan markets — roughly 43,351, about 54% of households — a metropolitan market where FHA financing is the everyday route into a first home. Census context: median value near $244,500, median household income near $69,108, population near 199K.
Sterling Heights
In Sterling Heights, owner households number near 39,206, about 76% of households, and the metropolitan market there produces a steady flow of FHA purchases and refinances. Census context: median value near $274,300, median household income near $79,909, population near 134K.
Warren
In Warren, owner households number near 38,922, about 71% of households, and the metropolitan market there produces a steady flow of FHA purchases and refinances. Census context: median value near $193,400, median household income near $64,016, population near 138K.
Livonia
In Livonia, owner households number near 33,424, about 87% of households, and the metropolitan market there produces a steady flow of FHA purchases and refinances. Census context: median value near $281,100, median household income near $98,460, population near 94K.
Lansing
Lansing holds one of the largest pools of owner households among Lendmire’s Michigan markets — roughly 27,771, about 54% of households — a metropolitan market where FHA financing is the everyday route into a first home. Census context: median value near $128,700, median household income near $54,382, population near 113K.
Statewide, the program rules are the same in every Michigan market: the minimum investment, the decision score for maximum financing, the premium schedule, the ratio ladder, the occupancy rule, and HUD’s property standards. What changes by county is the loan limit, which a Lendmire loan officer confirms for the county where you are buying.
Four ways Michigan buyers put an FHA loan to work.
A good use of FHA is one the program’s shape fits: a modest investment, a forgiving score, ratios with room to stretch, and insurance that makes the leverage possible. Four common Michigan uses follow.
Buy a condominium in an approved project
An FHA condominium file in Michigan adds one step to the house file: the project review. Approved projects and single-unit approvals both work, dues count in the ratios, and the minimum investment and premiums are unchanged.
Buy on a recovering credit profile
A Michigan buyer whose credit has recovered from a bankruptcy, a foreclosure, or a stretch of late payments can qualify once the event is seasoned under HUD’s rules and the recent history is clean; the decision score sets the leverage and the ratios follow the manual ladder.
Take cash out of a home with equity
Cash-out on FHA is a full refinance of the first mortgage at the program’s cash-out leverage after a year of ownership and occupancy. A Michigan owner weighs it against a home equity line, which keeps the existing first mortgage in place.
Buy a small multi-unit home and live in one unit
FHA finances owner-occupied homes of up to four units with the same minimum investment as a house. A Michigan buyer who lives in one unit and rents the others can count part of the rental income toward qualifying, within HUD’s rules for multi-unit purchases.
Estimate the FHA payment on a Michigan price before requesting a quote.
The calculator applies HUD’s structure to a Michigan scenario: enter the price and the down payment, pick the term, and it returns the base loan, the upfront premium financed, the total loan, principal and interest, the monthly premium for that leverage and loan size, taxes and insurance, and the ratios if you enter income. The rate field carries the weekly Freddie Mac benchmark as a market reference, not a quote.
Michigan FHA payment estimate
Starting assumptions reflect a typical Michigan price and the FHA minimum investment. Replace them with your own figures.
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 $230,000 price near Michigan’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.
A Michigan buyer choosing between FHA, conventional, and VA is choosing an insurance structure as much as a down payment. Here is how each one works and where it fits.
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.
Where FHA charges by schedule, conventional charges by score. A Michigan buyer with strong credit and a small down payment may find the private premium smaller and the payment lower; a buyer with a modest score will not. See Lendmire’s conventional loan program.
A Michigan 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 Michigan scenario review.
An FHA file is documented more fully than a streamline refinance; the items below are what a Michigan scenario review typically draws on.
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.
Most surprises on a Michigan FHA file trace back to one of these: a decision score that landed differently than expected, an appraisal with required repairs, a condominium without approval, or a county limit lower than the contract price.
Use these checks to keep the Michigan file clean and fundable.
Run these before asking for a quote: know where the decision score lands, know how long the annual premium runs at your leverage, and know that the property and the price fit the program and the county limit.
- Confirm the score: the lender’s report sets the decision score, the lowest middle score among the borrowers.
- Know the premium: ten percent down or more ends it after eleven years.
- Structure the contract: the minimum investment comes from the buyer or an acceptable gift, never the seller.
The decision score decides the leverage
The decision score is the lowest middle score among the borrowers, read from the lender’s report; a self-pulled score can land differently. At or above the threshold a Michigan buyer reaches maximum financing; the wholesale programs behind these pages start there.
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 Michigan buyer at the minimum investment carries it until a refinance or payoff, which is why many plan a refinance later.
Seller contributions and the minimum investment
Sellers and other interested parties may pay closing costs, prepaids, and discount points up to HUD’s limit as a share of the price; above it, the excess reduces the price for loan-sizing. The minimum investment itself cannot come from the seller, but it can come from an acceptable gift.
The appraisal and HUD’s property standards
An FHA appraisal values the Michigan home and checks it against HUD’s minimum property requirements: safety, soundness, and security. Peeling paint, a damaged roof, missing handrails, or a failed system can bring required repairs, completed before closing or through a repair escrow where permitted.
Two- to four-unit homes and rental income
FHA finances owner-occupied homes of up to four units at the same investment as a house, with HUD’s rules for counting rental income from the other units and, on larger properties, a self-sufficiency test. A Michigan buyer occupying one unit qualifies on the combined picture.
From a Michigan pre-approval to keys in hand.
Four steps, each with an FHA rule inside it: the pre-approval, the appraisal, the underwriting, and the closing. Here is the Michigan path.
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 Michigan contract sets the price and the contributions; the appraisal sets the value and the condition. Both feed the loan amount, and the lender confirms the county limit and the project approval before underwriting begins.
Underwriting
The file is scored by HUD’s automated system or underwritten manually, with income, assets, credit, and any compensating factors documented. Seasoning after a credit event is confirmed from the discharge or transfer papers, and the ratios are measured on effective income.
Closing
Closing is where the premiums become real: the upfront premium is financed into the total loan and the annual premium is part of the payment from month one. The Michigan buyer takes the keys and HUD insures the lender.
A brokerage that matches the program to the buyer.
Lendmire is never the lender. It is the broker that reads the Michigan file against FHA, conventional, and VA, matches the program to the profile, and keeps the premium structure in plain view before the buyer commits.
Three programs, one set of numbers
A single-program lender recommends its program; a brokerage recommends the one that fits. For a Michigan buyer with a modest score that is usually FHA, with a strong score often conventional, with eligibility almost always VA.
The premium explained before the offer
The insurance structure is the program’s cost, and Lendmire treats it as the first thing to explain rather than the last: how much, how long, and when a refinance would remove it for a Michigan buyer.
Licensed, consumer-purpose, in writing
The parameters on this page are HUD’s and the wholesale overlays’; the terms for a specific Michigan 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.
Michigan FHA loan FAQs
Plain answers to the questions Michigan 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 Michigan 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 Michigan?
The minimum required investment shown in the snapshot, measured on the lesser of the purchase price and the appraised value. It can be the buyer’s own funds, an acceptable gift, or approved secondary financing, and closing costs are separate; a seller may contribute toward those up to the program’s limit.
What credit score do I need for an FHA loan?
FHA’s threshold is well below conventional norms, and the snapshot shows it. A Michigan buyer at or above it reaches maximum financing; the lender’s report decides the decision score, and recent housing lates matter more than an old event that has seasoned.
How does FHA mortgage insurance work, and how long do I pay it?
Two premiums: an upfront premium, a share of the base loan that is usually financed into the total, and an annual premium charged monthly, set by HUD’s schedule for the term, the leverage, and the loan size. 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.
What is the FHA loan limit in Michigan?
There is a county limit, and it is the first thing confirmed on a Michigan file near the top of the market. The loan officer provides the current figure; above it the options are a larger investment or a conventional loan.
Can I buy a duplex or fourplex with an FHA loan?
Yes, up to four units, at the same minimum investment as a house, as long as you occupy one unit. Rental income from the other units is counted toward qualifying within HUD’s rules, and three- and four-unit homes face a self-sufficiency test on the rents.
Can I get an FHA loan after a bankruptcy or foreclosure?
The program seasons credit events rather than barring them. Each event has its own waiting period under HUD’s rules, a documented hardship can shorten some of them, and a Michigan buyer with a seasoned event and two clean years is inside the rules.
What does an FHA appraisal check?
The appraisal is a valuation and a condition report. The home must meet HUD’s standards to close as an FHA loan, and the value sets the loan amount when it comes in below the price.
Can I use an FHA loan to buy a condominium?
An FHA condominium file adds the project question to the house file. Confirm the approval path before paying for the appraisal; the rest of the file is standard.
Can I combine an FHA loan with down payment help?
Yes. HUD allows approved secondary financing to fund the investment, and the Down Payment Assistance program page describes the options that pair with an FHA first lien in Michigan.
Run the Michigan FHA numbers, then get the terms in writing.
Ready when you are: a Michigan review sizes the loan, settles the program, and delivers the written terms. Nothing on this page is a commitment to lend.
This guide covers Michigan — for the program overview, see Lendmire’s FHA loan program.
All Michigan city guides (6): Detroit · Grand Rapids · Lansing · Livonia · Sterling Heights · Warren
Related programs: Down Payment Assistance · FHA 203(k) Rehab Loans · Conventional Loans