FHA Loans
in Michigan.
Government-backed, forgiving on credit, and one of the most common starting points for Michigan first-time buyers. FHA isn't always the cheapest option over time -- but it's often the most accessible one.
An FHA loan is backed by the Federal Housing Administration and allows down payments as low as 3.5% with a 580+ credit score. It is more forgiving on past credit issues than conventional and is a common starting point for first-time buyers and anyone rebuilding their financial picture. The trade-off is mortgage insurance that typically stays for the life of the loan -- which is why buyers with strong credit often find conventional costs less over time.
What Is an FHA Loan?
An FHA loan is a mortgage insured by the Federal Housing Administration -- a government agency that backs the loan in case of default. Because the government is taking on risk, lenders can approve borrowers who wouldn't qualify for conventional financing. That makes FHA the entry point for a lot of Michigan homebuyers who have solid income and payment history but don't have a perfect credit record.
FHA loans are originated by private lenders like Union Home Mortgage and insured by the FHA. The program has been around since 1934 and remains one of the most widely used purchase programs in the country for good reason -- it works when other programs don't.
Who FHA Works Best For
- First-time homebuyers with limited down payment savings
- Buyers with credit scores between 580 and 679 who don't yet qualify for the best conventional rates
- Anyone who has had past credit challenges -- collections, late payments, prior bankruptcy or foreclosure with sufficient seasoning
- Buyers who want to combine FHA with Michigan's MSHDA MI 10K DPA to reduce out-of-pocket costs further
- Buyers purchasing certain manufactured homes that meet HUD standards
- Anyone who needs more flexible debt-to-income ratio allowances than conventional permits
The One Thing FHA Buyers Need to Understand
FHA loans carry two types of mortgage insurance: an upfront mortgage insurance premium (UFMIP) of 1.75% of the loan amount, which can be rolled into the loan, and an annual MIP paid monthly.
For most FHA loans with less than 10% down originated after June 2013, that monthly MIP stays for the entire life of the loan -- it does not cancel when you reach 20% equity the way conventional PMI does. This is the most important difference between FHA and conventional, and it is the reason buyers with 680+ credit scores often find conventional is the better long-term choice.
That said, FHA is not a bad program -- it is the right program for the right borrower. If FHA gets you into a home and you later refinance into conventional once you have built equity and improved your credit, the math can still work strongly in your favor.
FHA + MSHDA Down Payment Assistance
One of the most powerful combinations available to Michigan first-time buyers is pairing an FHA loan with MSHDA's MI 10K DPA program. Up to $10,000 toward your down payment and closing costs, zero interest, no monthly payments -- layered on top of FHA's 3.5% minimum down requirement. This combination has helped a lot of Northern Michigan buyers get to closing who otherwise couldn't have.
Kirby and Angie are approved MSHDA lenders. If you think you might qualify, the conversation starts with a quick pre-qual.
FHA vs. Conventional -- Honest Comparison
Both programs work. Which one works better depends on your specific situation.
How the FHA Process Works
From first conversation to keys in hand.
Start with a Pre-Qual
We look at your credit score, income, debts, and how much you have saved. If FHA is the right fit, we tell you exactly what you qualify for and what your estimated monthly payment looks like -- including MIP.
Stack Your Down Payment Assistance
If you are in a qualifying zip code and meet MSHDA income limits, we layer the MI 10K DPA on top of your FHA loan before you go shopping. This dramatically reduces what you need to bring to closing.
Get Pre-Approved and Start Shopping
With a pre-approval letter in hand, your real estate agent can submit competitive offers. FHA pre-approvals are taken seriously by sellers -- you are a qualified buyer, not a maybe.
Property Inspection and Appraisal
FHA has property condition requirements. The appraiser will flag any safety or structural issues that need to be resolved before closing. We help you navigate any property-related conditions that come up.
Underwriting and Close
Your file goes to underwriting, conditions are satisfied, and you receive a clear to close. We review your final numbers together and you sign at the closing table.
Frequently Asked Questions
Ready to See If FHA Is Your Path?
Five minutes to find out where you stand. No SSN required to start. We'll tell you exactly what you qualify for and whether pairing FHA with down payment assistance makes sense for your situation.
Kirby and Angie Mortgage Loan Team | Union Home Mortgage | NMLS #2229229 | Angie Anderson NMLS #1999286 | Kirby Slocum NMLS #680817 | Licensed in Michigan, Ohio, and Indiana | Equal Housing Lender. All loans subject to credit approval, underwriting review, and eligibility requirements. FHA loan products are subject to FHA guidelines and program requirements. MSHDA program availability and terms subject to change. Information provided is for educational purposes and does not constitute a loan commitment or guarantee of financing.
