The short version
Credit and down payment: 3.5% down with a credit score of 580 or higher. Scores from 500 to 579 need 10% down, and many lenders set higher minimums.
2026 loan limit: $541,287 for a one-unit home in Michigan.
Mortgage insurance: an upfront premium of 1.75% of the loan, plus an annual premium paid monthly.
The home: it has to be your primary residence and meet FHA’s property standards.
FHA loans are insured by the Federal Housing Administration, which lets lenders accept a smaller down payment and a wider range of credit histories than many conventional loans. You don’t have to be a first-time buyer to use one. Here’s what the program asks for in Michigan this year.
Credit score and down payment
FHA’s minimum is a 580 credit score for the 3.5% down payment. Borrowers with scores from 500 to 579 can still be eligible with at least 10% down. These are FHA’s floors. Lenders may require a higher score, so ask what yours uses before you assume you qualify.
Your down payment can come from savings or an eligible gift, such as money from a family member, documented with a gift letter. Down payment assistance can sometimes be combined with an FHA loan when the program allows it.
The 2026 FHA loan limit in Michigan
For loans with case numbers assigned on or after January 1, 2026, FHA’s limit for a one-unit home is $541,287. That baseline applies across Michigan, and limits are higher for two- to four-unit properties. You can confirm the figure for any county with HUD’s loan limit lookup.
Mortgage insurance: upfront and annual
Every FHA loan carries mortgage insurance. The upfront premium is 1.75% of the base loan amount and is usually added to the loan. The annual premium is divided into your monthly payments. For most loans it falls between 0.15% and 0.75% of the balance, depending on the loan amount, term and down payment.
How long it lasts depends on your down payment. With less than 10% down, the annual premium stays for the life of the loan. With 10% or more down, it ends after 11 years. Some FHA borrowers later refinance into a conventional loan to drop it, which has its own costs to weigh.
The home has to qualify too
FHA loans are for a home you’ll live in as your primary residence, usually moving in within 60 days of closing. Investment properties don’t qualify. An FHA appraisal also checks that the home is safe, sound and secure, so issues like peeling paint in an older home, missing handrails or a failing roof may need to be fixed before closing.
Income, debts and your credit history
There’s no single income minimum. The lender reviews steady income, your monthly debts compared with your income, and your credit history. A past bankruptcy or foreclosure doesn’t rule you out for good, but FHA sets waiting periods, often two years after a Chapter 7 bankruptcy and three years after a foreclosure.
FHA or conventional?
If your credit is strong and you can put 5% or more down, a conventional loan may cost less over time because its mortgage insurance can be removed. If your score is lower or your savings are tight, FHA can be the easier fit. Compare both with the mortgage calculator or ask us to put them side by side.
Bring your numbers to the conversation
Tell us the price range you’re looking at, what you’ve saved and roughly where your credit stands. We’ll show what an FHA loan would cost next to your other options, before you make an offer.
Official resources
Educational information, not an offer to lend. Program rules, costs and availability can change. Ask a loan officer about current terms for your situation.
