Loan types
FHA loan
A mortgage insured by the Federal Housing Administration that lets buyers put 3.5% down with a 580 credit score, in exchange for upfront and ongoing mortgage insurance.
What does fha loan mean?
The FHA loan is Michigan's default path for buyers with thinner credit or smaller savings: 3.5% down at a 580 score, or 10% down between 500 and 579. Government backing lets lenders accept lower scores, and FHA rates often run below conventional. The cost is mortgage insurance — an upfront 1.75% premium plus an annual premium that, at minimum down payment, lasts the life of the loan. The usual exit is to build 20% equity and refinance into a conventional loan. FHA pairs cleanly with MSHDA down payment assistance.
Common questions
What are the FHA down payment and credit rules?
3.5% down with a 580 score, or 10% down between 500 and 579. Michigan county loan limits apply, mostly at the national floor.
Does FHA mortgage insurance ever go away?
At the minimum 3.5% down it lasts the life of the loan. The standard exit is to build 20% equity and refinance into a conventional loan to drop it.
Can I combine FHA with MSHDA assistance?
Yes — a MSHDA MI Home Loan can take FHA form with the MI 10K DPA on top, but you'll need a 640 score and a MSHDA-approved lender.
Related terms