Want to know about loans?

Thinking about buying a home in Michigan? 🏡 Whether you’re a first-time buyer or looking to upgrade, understanding your loan options is the first step to making your dream a reality. Let’s break down the most common loan types available right now in Michigan and what it takes to qualify for each.

1. Conventional Loans

Conventional loans are the most widely used mortgages. They aren’t backed by the government, which means lenders set their own requirements—though most follow Fannie Mae and Freddie Mac guidelines.

• Down Payment: Usually 3–20% of the home’s price.

• Credit Score: Typically 620 or higher.

• Other Requirements: Stable income, manageable debt-to-income ratio, and private mortgage insurance (PMI) if you put down less than 20%.

2. FHA Loans

Backed by the Federal Housing Administration, FHA loans are popular with first-time buyers and those with less-than-perfect credit.

• Down Payment: As low as 3.5%.

• Credit Score: Minimum of 580 to qualify for the low down payment; some lenders accept lower scores with a higher down payment.

• Other Requirements: Upfront and annual mortgage insurance premiums.

3. VA Loans

Available to eligible veterans, active-duty service members, and some surviving spouses, VA loans are a fantastic benefit for those who qualify.

• Down Payment: Zero down for most borrowers.

• Credit Score: No official minimum, but many lenders look for at least 620.

• Other Requirements: Satisfactory service record and a Certificate of Eligibility (COE).

4. USDA Loans

If you’re buying in a rural part of Michigan, a USDA loan might be the perfect fit. These loans are backed by the U.S. Department of Agriculture and aim to help low- to moderate-income buyers.

• Down Payment: No down payment required.

• Credit Score: Generally 640 or higher.

• Other Requirements: Income limits and the property must be in an eligible rural area.

5. Michigan-Specific Programs

The Michigan State Housing Development Authority (MSHDA) offers specialized programs for first-time buyers, including down payment assistance and favorable loan terms. These can be a game-changer for buyers who qualify.

Final Thoughts

Each loan type has its own perks and requirements. The best fit depends on your financial picture, credit history, and where you want to put down roots. If you’re unsure which path to take, connect with a local lender or housing counselor—they can help you navigate your options and get you one step closer to homeownership in Michigan!

Ready to take the next step? Reach out today for personalized guidance on Michigan’s loan programs!