FHA Loan Requirements in Michigan: A Clear Checklist for Homebuyers

If you’re buying a home in Michigan and wondering if an FHA loan could work for you, you’re not alone. FHA financing is popular across Metro Detroit, Grand Rapids, Ann Arbor, Lansing, and everywhere in between because it can be more flexible on credit and down payment than many conventional options.

Below is a simple, lender-friendly breakdown of FHA requirements, plus the “real world” expectations that help Michigan buyers get approved smoothly.

Quick FHA Requirements Checklist

• Credit score: Many buyers qualify with a 580+ score for minimum down payment options, ( but realistically 620+ is far more likely to be approved. Some may qualify with 500–579 but the down payment requirement is higher.
• Down payment: Often as low as 3.5% with stronger credit. Gift funds are commonly allowed with proper documentation.
• Debt-to-income (DTI): FHA guidelines often target about 43% total DTI, with potential flexibility when the overall file is strong.
• Primary residence: FHA is intended for a home you will live in, not an investment property.
• Appraisal and property standards: The home must meet safety and livability requirements, verified through an FHA appraisal.
• Mortgage insurance: FHA loans include upfront and monthly mortgage insurance, which affects your payment and long-term strategy.

Credit Score and Down Payment: What Michigan Buyers Should Know

FHA loans are designed to help more borrowers qualify, but the best terms usually go to buyers with stronger credit. If you’re close to a key credit threshold, a small improvement plan can make a big difference in your payment and approval strength.

In my process, we look at your credit the right way, then build a clear, step-by-step plan to help you qualify without surprises. Transparency matters because homebuying is stressful enough without moving goalposts.

Income, Employment, and DTI: How Approval Really Works

FHA underwriting evaluates whether your income is stable and whether your monthly debts leave enough room for your new housing payment. This is where thoughtful planning beats guesswork.

For Michigan buyers, we also plan for the real costs that show up in our market, like property taxes, homeowners insurance, and in some communities, HOA dues. When we run your numbers up front, you can shop confidently in competitive areas like Oakland County, Kent County, and Washtenaw County.

Property Requirements: Appraisal, Safety, and Common Issues

The FHA appraisal isn’t just about value. It also checks basic safety and livability. Common examples that can trigger repairs include peeling paint on older homes, missing handrails, roof concerns, or non-functioning utilities.

If you’re buying an older home in Michigan, it doesn’t mean FHA won’t work. It just means we want a smart plan and a strong team so you don’t lose time during inspection and appraisal.

Mortgage Insurance: Plan Now, Save Later

FHA mortgage insurance is one reason FHA can be more flexible with credit and down payment. The tradeoff is that mortgage insurance impacts your monthly payment and long-term cost.

This is where values-driven advising matters. I’ll help you compare options and build a strategy for the future, including when it might make sense to refinance or restructure later if it helps you save money over time.

My Michigan FHA Game Plan (Neo Values in Action)

• Clarity first: You’ll get a simple breakdown of payment, cash to close, and approval targets.
• No pressure, just planning: You’ll know your price range and next steps before you fall in love with a house.
• Long-term savings mindset: We look beyond “getting approved” to what makes sense over the next 3 to 10 years.

Next Step: Get a Michigan FHA Pre-Approval Done Right

If you want to know whether you qualify for an FHA loan in Michigan and what your best path looks like, let’s build your plan. A solid pre-approval can make your offer stronger and keep your closing on track.

Contact me here or learn more about FHA loans in Michigan