FHA loan vs 5% Conventional loan for first property

2 Replies

I am in the process of getting approved for my first loan. I plan on buying a 2-4 unit and house hacking it. I am unsure which loan would be cheaper/the better one to use between a FHA loan and a 5% conventional loan.

Well bad news a Conventional Owner occupied 2-4 unit is a 15%-25% down payment, even with a Conventional Affordable 2-4 unit the down payment is 15%. With that out the way, for a first time buyer not wanting to break the bank FHA is a great option as it is 3.5% down for 1-4 units. The downside is there is Mortgage Insurance for the life of the loan but this can be remedied by refinancing to a conventional after you build up 20% equity.

Best of Luck!

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