Freshman can live anywhere they want to BUT I assume most live in the dorms. On campus since you’re also part of the city of Ann Arbor there are many types of choices. Coop housing is very interesting if you’re on a budget and want to have meals cooked for you. Lol. Usually with left overs, internet and utilities included. But it’s rarely freshman and mixed with all age groups.
You’re also asking “why “questions. There are off campus housing through Michigan. If you want specific information please call housing. They’re very helpful.