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!

Motivated Leads
Marketing For Investors…By Investors
We Get Houses For Real Estate Investors
We help investors get more off market deals from distressed sellers.
Learn More

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you