Conventional Loans in Michigan: Down Payment, PMI & Qualification Options
Conventional financing can be simple — or surprisingly flexible. Compare down payment, mortgage insurance, pricing and structure before choosing a lender.
How should I compare conventional mortgage offers?
Use the same loan amount, term and rate-lock assumptions. Then compare lender fees, points, credits, mortgage insurance, total monthly payment and cash to close. A lower quoted payment caused by underestimated taxes or insurance does not make one loan less expensive.
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Updated October 7, 2026. Educational information; borrower, property and lender review determines eligibility.
Conventional does not mean one-size-fits-all.
Conventional mortgages can work for first-time buyers, repeat buyers, second homes and investment properties. The useful comparison is not simply whether you qualify; it is how the available structures affect payment, cash-to-close and long-term cost.
What I compare
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Send the numbers you were quoted and compare the complete structure before you commit.
Conventional condo financing also involves the project
Borrower preapproval does not establish condo project eligibility. Review the Fannie Mae and Freddie Mac changes, reserve funding and documents to collect early. Michigan condo financing changes and buyer checklist.
How much cash do you want left after closing?
For an Oakland County purchase, I can help you compare down-payment choices alongside the payment, mortgage insurance and reserves you keep.
Low down payment: when 3% may be an option
Some eligible conventional primary-residence programs allow a down payment as low as 3%. That does not mean every borrower, property or occupancy qualifies. Income limits, first-time-buyer criteria or education requirements can apply depending on the program. Fannie Mae’s HomeReady overview describes one available framework. Ask which program is being quoted and why it fits your file.
PMI, lender credits and your cash after closing
Private mortgage insurance commonly applies when a conventional buyer puts less than 20% down. Compare the monthly premium and any available alternative payment structure alongside the interest rate and upfront charges. Ask about cancellation rules; do not assume mortgage insurance disappears merely because a future sale estimate suggests enough equity.
Seller credits can help with permitted closing costs, subject to transaction limits. They are not a substitute for required down payment or reserves. Lender credits usually trade a different interest-rate structure for help with upfront costs. Use the same purchase price, lock assumptions and closing date when comparing Loan Estimates.
Primary home, second home or rental property?
Tell the lender how you actually plan to use the home. Second-home and investment-property rules can differ from primary-residence rules for down payment, reserves, pricing and rental-income treatment. A cottage you intend to rent regularly should not be described as a second home merely to seek different terms. Compare conventional investor and DSCR options when the property is an investment.
Conventional or FHA?
Put both eligible choices side by side: monthly payment, mortgage insurance, upfront costs and cash left after closing. FHA may fit some credit profiles; conventional may offer a different insurance and cost structure. Neither label proves that one option is cheaper for you. Use the FHA comparison guide and compare an existing pre-approval before committing.
Questions about conventional financing
Do I need 20% down?
No. Eligible conventional options can permit a smaller down payment, although mortgage insurance and other requirements may apply.
Can a first-time buyer use a conventional loan?
Yes, if the borrower and property meet the selected program’s rules. Review the Michigan first-time-buyer guide to compare the payment and cash plan.
Can I use the same terms for a rental property?
Do not assume so. Occupancy changes the underwriting and pricing review. Ask for a quote based on the actual planned use.
Text Mike at 616-319-1640 or call Mike with a general mortgage question. Use an approved secure channel for financial documents.
Put a conventional loan into your budget
Compare full monthly-payment examples and cash for a $300,000 purchase. Then check the actual property costs in Grand Rapids or Lansing.
Would it help to look at your numbers?
If you’re wondering how this applies to your plans, send me the question you’re trying to answer. You don’t need to have everything figured out before we talk.
Prefer to start with the numbers? Use the Michigan Home Affordability Calculator or take the 2-Minute Home Buyer Readiness Assessment. Neither is a loan approval.
Ask Mike a question · Call 616-319-1640 · Email Mike. For live chat, use the Live Chat control on the homepage.
By Mike Alkema, Michigan Mortgage Broker · NMLS 642953 · 30+ years of mortgage and real-estate lending experience. Content updated October 7, 2026.
Loan programs, terms and availability depend on the borrower, property and lender. This is educational information, not a commitment to lend. Explore Michigan Mortgage Questions.