Michigan FHA loans: limits, cash to close, and what to check

FHA can be an option when a smaller down payment matters, but the loan still needs to fit your income, credit, and property. In the November 14, 2026 HUD FHA Forward lookup for Michigan, all 83 counties used the national floor limits. The one-unit limit was $541,287. That is a loan limit—not a budget recommendation.

Important information

Program rules, limits, rates, fees, and eligibility can change; confirm them with the relevant agency and a licensed mortgage professional before relying on this information.

Official program references checked November 14, 2026. This is educational guidance, not a loan approval or a rate quote. Program rules change; confirm current requirements with the agency and your loan officer.

Primary references

Key considerations

Eligible, credit-qualifying borrowers may be able to use the standard FHA 3.5% down payment. It is not a promise that every borrower qualifies.
Compare the full payment and cash to close, not just the down payment. Mortgage insurance, property taxes, homeowners insurance, closing costs, and prepaid items matter.
FHA is worth comparing with conventional financing and any assistance for which you qualify. A lower down payment does not automatically mean the lowest total cost.

Eligibility and questions to review

Ask the lender to review your income, debts, credit history, available funds, and occupancy plans against current FHA and lender requirements.
The property must meet applicable FHA standards. An FHA appraisal serves the lending process; it is not a substitute for your own home inspection.
Confirm the county loan limit and the number of dwelling units. A two- to four-unit property raises occupancy and underwriting questions beyond simply having a higher limit.
FHA mortgage insurance applies. Request the current upfront and annual mortgage-insurance amounts for your loan.

Documents to prepare

Photo identification and the income documents the lender requests for your employment or income type
Asset statements showing savings and the source of down-payment and closing funds
Information about debts, housing history, and any other real estate you own
The purchase agreement and property address once you have selected a home
Gift or assistance documentation, and an education certificate when the selected program requires one

Typical process milestones

Compare options before choosing a loan: Review income, debts, savings, the property, and the written loan terms with a loan officer.
Prepare the file: Provide the requested documents and explain gifts, assistance, or changes in employment. An initial review is not final approval.
Complete property and underwriting review: The lender reviews the application, valuation, title, and any outstanding conditions. Timing depends on the file.
Review the closing figures: Confirm cash to close, insurance, taxes, and any assistance repayment terms before signing. Closing depends on all required conditions being met.

Current limits and program details

HUD Mortgagee Letter 2025-23 sets calendar-year 2026 limits for case numbers assigned on or after January 1, 2026. National low-cost floors: one-unit $541,287; two-unit $693,050; three-unit $837,700; four-unit $1,041,125. The national one-unit high-cost ceiling is $1,249,125; it is not the Michigan one-unit limit. HUD’s FHA Forward, CY2026, Michigan lookup returned 83 county records with mortgage maximums as of January 1, 2026. Every county had the four floor amounts. Wayne, Oakland, and Macomb each showed $541,287 / $693,050 / $837,700 / $1,041,125 for one through four units. Re-check the property’s county in HUD’s official lookup before relying on these figures.

Talk through your Michigan purchase

Tell Sonic Loans® about your income, savings, and the property you are considering. Ask for a comparison of eligible programs and written cost estimates before choosing.

Talk through your Michigan purchase

Frequently asked questions

What is the minimum down payment for an FHA loan in Michigan?

Eligible borrowers with a credit score of 580 or higher may put down as little as 3.5% of the lesser of the sale price or appraised value. Scores from 500 to 579 are limited to 90% financing, so you would need at least 10% down. That is the down payment, not your cash to close. Closing costs, prepaid items, and mortgage insurance still apply. A lender can require more than FHA's minimum, and meeting the minimum is not an approval.

What credit score do I need for an FHA loan?

FHA's published floor is a minimum decision credit score of 500. At 580 or higher, you may be eligible for FHA's maximum financing, including the 3.5% down-payment option. Scores from 500 to 579 are limited to 90% financing. Scores below 500 are not eligible for FHA-insured financing. Many lenders set a higher bar than those FHA minimums. Your income, debts, assets, and the property are reviewed together, so a qualifying score alone is not an approval.

What is the FHA loan limit in Michigan in 2026?

For FHA case numbers assigned on or after January 1, 2026, every Michigan county uses FHA's national floor. The one-unit limit is $541,287. The two-, three-, and four-unit limits are $693,050, $837,700, and $1,041,125. That includes Wayne, Oakland, and Macomb. The limit caps the FHA-insured loan amount; it is not a recommended purchase price. Confirm the current figure for the property's county and unit count in HUD's official loan-limit lookup.

Do FHA loans require mortgage insurance?

Yes. Most FHA purchase loans charge a 1.75% upfront mortgage insurance premium, which can be financed, plus an annual premium collected monthly. On a typical term longer than 15 years, with a base loan of $726,200 or less and less than 5% down, the annual rate is 0.55% and lasts for the life of the loan. With 10% or more down, the annual rate is 0.50% and stops after 11 years. Confirm the current schedule on your written estimate.

Do I have to be a first-time homebuyer to get an FHA loan?

No. FHA rules do not limit these loans to first-time buyers. The home generally needs to be your primary residence: at least one borrower typically must occupy it within 60 days and intend to stay at least a year. Repeat buyers still have to meet FHA and lender requirements for credit, income, funds, and the property. Down-payment assistance programs often have their own first-time or income rules, which are separate from FHA eligibility.

Can I use gift money for an FHA down payment?

Yes, if the gift is allowed under FHA rules and is properly documented. Acceptable donors include a family member, an employer or labor union, a close friend with a documented interest in the borrower, a charitable organization, or a government agency with a homeownership program. The gift cannot require repayment. Your lender will need a signed gift letter and proof that the funds came from an acceptable source.

Does the home have to meet FHA property requirements?

Yes. The property has to meet HUD's minimum property requirements, which generally mean the home is safe, sound, and secure. An FHA appraisal is part of that review; it is not a substitute for your own home inspection. If the appraiser notes required repairs, those items usually have to be resolved before the loan can close, or the property may not be eligible as proposed. Condo and manufactured-home rules are tighter and should be checked early.

Can Sonic Loans® help with an FHA loan in Michigan?

Yes. Sonic Loans® is a licensed mortgage lender, NMLS #1955855, and originates loans in Michigan. Confirm current licensing on NMLS Consumer Access. Since 2020, the company has funded 1,200+ loans totaling $280M+. A loan officer can compare FHA with other options for your income, credit, funds, and property, and give you a written estimate. Current FHA and lender requirements control.

Compare Michigan purchase options

Michigan FHA guide · Michigan first-time buyer guide · Michigan HomeReady guide

By Charlie Shami · NMLS #1097497