Buyer guide
Which mortgage is right for you in Michigan?
Short answer
The right Michigan loan comes down to three things: your credit, your cash and your situation. Under a 620 score, start with FHA; a veteran should almost always use VA; a rural address opens USDA; short on cash, pair FHA with MSHDA's $10,000 assistance; and strong credit with 5% or more down usually points to a conventional loan. The matrix below narrows it in a minute.
Start with three questions about you
Before comparing loan types, answer three things about yourself, not the loan. They rule most options in or out before you ever look at a rate.
- Credit: what's your middle score?
- Cash: how much for down payment and closing?
- Situation: veteran, rural address, first-timer, self-employed?
The quick decision matrix
Most Michigan buyers match more than one row. Start at the top — credit and eligibility rule out the rest before cost even matters.
| If this is you | Start with | Why |
|---|---|---|
| Credit under 620 | FHA | 580 gets you in at 3.5% down |
| Veteran or active-duty | VA | Zero down, no monthly insurance, lowest rates |
| Rural address | USDA | Zero down if the address qualifies |
| First-timer short on cash | FHA + MSHDA | 3.5% down plus up to $10,000 assistance |
| Strong credit, 5%+ down | Conventional | PMI cancels at 20%; often cheaper long-term |
| Price above the county limit | Jumbo | Mostly Ann Arbor, Oakland, lakefront |
| Buying a fixer-upper | FHA 203(k) | Rolls repair costs into one loan |
When the answer isn't obvious
Veteran with a rural address? Use VA, not USDA. VA has no income cap, no monthly insurance, and waives its fee for a service-connected disability — edges USDA can't match. You can't use both on one purchase.
Self-employed and want MSHDA? You can, but MSHDA needs a 640 score and two years of documentable returns, and it averages your income — aggressive write-offs can shrink what you qualify for.
High earner in Ann Arbor or Oakland County? You may need a jumbo loan above the county limit, and MSHDA's income caps likely rule out assistance — conventional or jumbo is the path.
FHA vs conventional: the common tie
The two most Michigan buyers weigh are FHA and conventional. Below 620, or with little cash, FHA usually wins on approval. At 700+ with 5% down, conventional usually wins on cost, because its PMI cancels at 20% equity while FHA's often lasts the life of the loan.
Once you know the loan, our lender matcher narrows the lender to fit it.