How to Qualify for an FHA Loan in Plymouth, MI
An FHA loan in Plymouth, MI is one of the most accessible paths to homeownership available — particularly for first-time buyers, buyers with less-than-perfect credit, or those who haven’t had time to save a large down payment. This guide walks through exactly what you need to qualify, what the program costs, and how to get started with Trevor Aspiranti at Extreme Loans.
What is an FHA loan?
An FHA loan is a mortgage insured by the Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development (HUD). Because the FHA insures the loan against default, lenders can offer more flexible qualifying terms than conventional financing — lower credit score requirements, smaller down payments, and more lenient debt-to-income ratio limits.
Credit score requirements
FHA loans have two credit score tiers that determine your down payment requirement:
- 580 or higher: 3.5% minimum down payment. This is the tier most Plymouth buyers will fall into.
- 500-579: 10% minimum down payment. You can still qualify with a lower score but you’ll need more cash at closing.
- Below 500: not eligible for FHA financing.
It’s worth noting that the FHA’s guidelines are minimums — individual lenders can set higher requirements. Most lenders working with Trevor Aspiranti at Extreme Loans prefer scores of 580 or above. If your score is in the 560-580 range, Trevor can often identify lenders with more flexible overlays.
Down payment requirements
The minimum down payment for an FHA loan with a credit score of 580 or higher is 3.5% of the purchase price. On a $280,000 home in Plymouth that’s $9,800 at closing before fees. Down payment funds can come from your own savings, a gift from a family member, or a government down payment assistance program — including Michigan’s MSHDA program which provides up to $10,000 in assistance for qualifying buyers.
Debt-to-income ratio limits
Your debt-to-income ratio (DTI) compares your monthly debt obligations to your gross monthly income. FHA guidelines generally allow a total DTI up to 43%, though lenders may approve higher ratios (up to 50% or above) with strong compensating factors like a high credit score, significant reserves, or a long employment history.
On a practical level, if you earn $6,000 per month before taxes, FHA guidelines would typically allow total monthly debt payments including your mortgage of up to $2,580 at a 43% DTI.
FHA loan limits for Wayne County
Plymouth, MI is in Wayne County. The FHA loan limit sets the maximum loan amount you can borrow with FHA financing in a given area. Limits are updated annually by HUD based on median home prices. For current Wayne County FHA loan limits, visit HUD’s website at hud.gov or contact Trevor Aspiranti directly — he checks current limits for every buyer he works with.
Mortgage insurance costs
FHA loans require two forms of mortgage insurance:
- Upfront MIP: 1.75% of the loan amount, charged at closing but typically rolled into the loan. On a $270,000 loan (purchase price minus down payment) the upfront MIP is $4,725.
- Annual MIP: typically 0.85% of the outstanding loan balance per year, paid monthly. On a $270,000 loan that’s approximately $191 per month.
If you put 10% or more down, the annual MIP falls off after 11 years. With less than 10% down, MIP lasts for the life of the loan — the only way to remove it is to refinance into a conventional loan once you’ve built sufficient equity.
Employment and income requirements
FHA loans require two years of employment history, though it doesn’t need to be with the same employer. Self-employed buyers need two years of tax returns. Gaps in employment are acceptable with documentation of the reason. Income must be stable and expected to continue — part-time, overtime, and bonus income can typically be counted if it has a two-year history.
Property requirements
The property you’re purchasing must meet FHA’s minimum property standards. An FHA appraiser will inspect the home and flag any safety, structural, or habitability issues that must be addressed before closing. This means FHA loans are harder to use on fixer-uppers or homes with deferred maintenance — though there is an FHA 203(k) renovation loan for buyers who want to buy and repair in a single transaction.
How Trevor Aspiranti helps Plymouth FHA buyers
As a mortgage broker at Extreme Loans in Southfield, MI, Trevor Aspiranti works with multiple wholesale FHA lenders to find Plymouth buyers the most competitive rate available. He runs the numbers on FHA versus conventional side-by-side, checks MSHDA down payment assistance eligibility, and handles the full application process from pre-approval through closing.
Trevor serves Plymouth, Canton, Northville, Livonia, and all of Wayne and Washtenaw Counties. Same-day pre-approval responses available.
Ready to get started?
Trevor Aspiranti is a licensed Michigan mortgage lender (NMLS #1941045) with Extreme Loans in Southfield, MI. Talk to Trevor about your next home loan.
