FHA Loans Michigan
Are you striving for homeownership, but not ready to make a 20% down payment? An FHA Loan is your answer!
With FHA Loans, you can get a home loan with as little as 3.5% down.
Take Advantage of FHA Loans to Make Your Dream of Homeownership a Reality
Whether you're a first-time or repeat homebuyer, affording and qualifying for a mortgage may feel beyond your reach. But your homeowning goals may be more achievable than you think. With the help of the Federal Housing Administration (FHA), Homesite Mortgage can make your dream a reality with FHA loans for aspirant Michigan homeowners.
Requirements to Qualify for an FHA Loan in Michigan
Michigan home loan seekers who fall short of conventional mortgage approval requirements turn to FHA loans as a viable alternative. While certain restrictions apply, obtaining an FHA loan is possible for individuals with slightly lower credit scores and salaries. These are some of the core requirements borrowers must meet to qualify for FHA loans in Michigan:
- Credit score check: You must have a credit score of 500 or more to obtain an FHA loan.
- Down payment amount: If you have a credit score between 500 and 580, you could qualify for a 10% down payment, but if it's above 580, you may be eligible for a 3.5% minimum down payment.
- DTI ratio percentage: Your ideal debt-to-income (DTI) ratio will be 43% or less, but up to 50% may be acceptable if the applicant has a good credit score.
- FHA property appraisal: The prospective property must undergo a thorough inspection by appraisers working for the FHA to evaluate its condition and verify it meets the Property Acceptability Criteria.
- Mortgage insurance cover: To cover lenders against foreclosure losses, you must pay an initial lump sum of 1.75% of the loan and an additional 0.15% to 0.75% per year in mortgage insurance.
- Property occupancy period: Once you purchase the property through an FHA loan, you must inhabit it and use it as your principal residence for no less than a year.
Applicants who have experienced a recent bankruptcy or foreclosure may still qualify for an FHA loan after two to three years.
Michigan FHA Loan Limits
While an FHA loan can represent a life-changing opportunity for prospective Michigan homeowners, there are specific loan limits you should be aware of. The Department of Housing and Urban Development calculates these FHA loan limits annually, and current values include:
- One-unit properties: The FHA mortgage limit when buying a single-family home is $472,030.
- Two-unit properties: When purchasing two dwellings on one property, the FHA loan limit is $604,400.
- Three-unit properties: You can expect an FHA mortgage limit of $730,525 for properties with housing for up to three families.
- Four-unit properties: A loan limit of $907,900 applies to four-dwelling properties funded through an FHA loan.
Benefits of FHA Loans in Michigan
If you and the property you'd like to purchase meet the required criteria, you can take advantage of the many benefits that come with opting for an FHA loan, including:
- Sizeable loan limits of up to $472,030 for a single-family dwelling.
- Eligibility for borrowers with a below-average credit score.
- Down payments as low as 3.5%, with access to further assistance.
- Zero penalties for paying your FHA loan off quicker.
Refinancing Your FHA Loan
A mortgage refinance is a popular way to obtain additional funds or reduce your loan interest rate. Opting to refinance your home involves applying for a new home loan for the house you already own. When doing so, the loan falls into one of two categories: FHA rate and term refinancing or FHA cash-out refinancing.
FHA Mortgage Rate and Term Refinancing
This type of refinancing is ideal when you want to take advantage of a drop in interest rates or you'd like to extend your loan's term. Those with a fixed interest rate can benefit from reapplying for an FHA loan on their homes when interest rates drop below their current fixed rate. A lower interest rate reduces the repayment amounts but restricts your financial gains at the end of the agreed term.
FHA Mortgage Cash-Out Refinancing
Homeowners can access their property's equity through refinancing, receiving a lump sum payout when approved while renewing their loan terms. Many choose this route when facing significant debt or when they'd like to upgrade their property through remodeling and renovations, adding to its value.
Let Homesite Mortgage Help You With Your FHA Loan Needs
The Homesite Mortgage team is passionate about making your homebuying dreams come true. Our team of professionals is available to discuss your property needs and guide you through the FHA loan application process. With our vast industry experience, competitive benefits and commitment to helping you achieve homeownership as swiftly as possible, you know your mortgage is in good hands.