FHA loans
FHA Loans in Michigan
FHA is the program most of my first-time buyers end up using, and the reason is almost always the same: it looks at credit history with more flexibility than conventional guidelines do.
Who FHA Is Actually For
Insured by the Federal Housing Administration, FHA exists to widen access to homeownership. In practice that means it is the program that says yes to files conventional guidelines are stricter about — a shorter credit history, a rough patch a few years back, a collection that has been handled.
If a lender has already told you no, it is worth knowing which program they ran you through before you take that as the answer. That was one program’s rule, not a verdict on whether you can buy.
It pairs with the assistance I place, sized at 3.5% or 5% of the purchase price in repayable and forgivable versions. How the assistance works →
The Mortgage Insurance Trade
This is the part I want you to hear before you choose, because it is the real cost of the flexibility. FHA carries two mortgage insurance pieces: one charged up front, which is usually financed into the loan rather than paid at closing, and one charged monthly.
On most FHA terms that monthly piece stays for the life of the loan. Conventional financing works differently — its mortgage insurance comes off once you have built enough equity. That difference does not make either one the right answer; it makes FHA a program you should expect to refinance out of eventually if your credit and equity improve. I would rather say that now than have you find it out in year four.
FHA Asks for 3.5% Down
That is the number worth fixing in your head before you do any other arithmetic, because most first-time buyers are working from 20% and talking themselves out of the whole thing.
It also means the assistance I place lines up with it exactly. A program sized at 3.5% of the purchase price is built to cover a 3.5% downpayment — the whole thing, not a slice of it. How the assistance works →
Representative example. $250,000 purchase price, single-family primary residence in Oakland County, Michigan, estimated credit score, 30-day rate lock, escrow account not waived. Downpayment $8,750, which is 3.5% of the purchase price. Base loan amount $241,250 plus $4,222 financed FHA upfront mortgage insurance for a total loan amount of $245,472. Repayment terms: 360 monthly payments of $1,531.43 in principal and interest, at a fixed interest rate of 6.375% for the full 30-year term, with no balloon payment and no prepayment penalty. Monthly mortgage insurance of $110.00 is additional. Property taxes and homeowner’s insurance are additional, vary by community and by property, are not set by the lender, and are not included in the Annual Percentage Rate. Annual Percentage Rate (APR) 7.427%. Rates effective September 14, 2026 and subject to change. This is an estimate for illustration only, not a loan approval, a commitment to lend, or an offer of credit. Until you lock, the rate, APR and terms may change or may not be available at commitment or closing. Your actual rate, payment and costs could be higher. Request an official Loan Estimate before choosing a loan.
What Catches People Out
- The property has to pass too. FHA appraisals check condition, not just value. Peeling paint on a pre-1978 house, a roof near the end of its life, missing handrails — these can become conditions before closing. On the older housing stock across Metro Detroit that matters more than buyers expect.
- It is for a home you live in. Primary residence only.
- There is a renovation version. If the house you want needs work, FHA has a structure that finances the purchase and the repairs together. Ask before you walk away from a listing because of its condition.
- Assistance stacks. A seller can also contribute toward your costs. What a seller concession can and cannot pay →
Tell me what your credit and savings look like and I will tell you whether FHA is the program that fits, or whether something else does better for you.