Loan guide
HomeReady loans in Michigan
HomeReady is Fannie Mae's 3%-down conventional program built for low-to-moderate-income Michigan buyers — with reduced mortgage insurance that cancels at 20% equity and rules that count rental and household income most programs ignore.
- Min. down payment
- 3%
- Income limit
- 80% of area median income (AMI)
- Mortgage insurance
- Reduced PMI, cancels at 20% equity
- Best for
- Low-to-moderate-income Michigan buyers
How homeready loans work
HomeReady is a conventional loan from Fannie Mae aimed at low-to-moderate-income buyers. It allows as little as 3% down and, unlike FHA, carries reduced private mortgage insurance that cancels once you reach 20% equity.
Flexibility is the edge
- Boarder income: count rental or roommate income toward qualifying
- Non-occupant co-borrowers: a parent or relative can sign without living there
- Education credit: a short homeownership course can unlock a closing-cost credit
Because it's conventional, the standard 620+ credit and debt-to-income rules still apply.
What's different in Michigan
The 80%-of-AMI cap is the number that decides eligibility, and it varies sharply across Michigan. In lower-cost metros the limit sits well within reach of a typical wage, while in higher-income areas like parts of Oakland and Washtenaw counties the AMI is higher, so more buyers qualify than they'd assume.
HomeReady pairs naturally with MSHDA down payment assistance for buyers who clear both income tests. Because the reduced PMI cancels at 20% equity and can cost less monthly than FHA insurance, a moderate-income buyer with decent credit often comes out cheaper long-term on HomeReady than on FHA.
Requirements at a glance
- Income at or below 80% of the area median income (AMI)
- 3% down and a 620+ credit score (conventional standards)
- Homeownership-education course completed before closing
- Primary residence; PMI required until 20% equity
Frequently asked questions
What is a HomeReady loan?
HomeReady is Fannie Mae's 3%-down conventional loan for low-to-moderate-income buyers whose income is at or below 80% of the area median. It carries reduced private mortgage insurance that cancels at 20% equity, unlike FHA insurance — making it a strong conventional option for qualifying Michigan buyers.
What are the HomeReady income limits in Michigan?
Your household income must be at or below 80% of the area median income for the home's location. That figure varies widely across Michigan — higher in metros like Ann Arbor and parts of Oakland County, lower elsewhere — so always check the limit for the specific address rather than assuming a statewide number.
Can I use boarder income to qualify for HomeReady?
Yes. HomeReady lets you count documented boarder or rental income toward qualifying and allows non-occupant co-borrowers, such as a parent who signs but doesn't live in the home. Those flexibilities help many Michigan buyers qualify who couldn't on a standard conventional loan.
This guide is general information, not a lending decision. Loan limits and program rules change — verify current figures with a licensed Michigan lender and confirm licensing at NMLS Consumer Access. See all Michigan loan types or compare lenders.