FHA Loan vs. Conventional Loan

[Benjamin Sulka]

Hope everyone is living their dream.

Regarding financing for a multifamily home, I would love to hear some recommendations from anyone. Would it make more sense to get an FHA loan at 3.5% down but have to pay PMI or to get a conventional loan with owner-occupied financing? Does anyone know the typical rate for owner-occupied financing for a conventional mortgage?

I appreciate anyone's contribution! 

Ben Sulka, aspiring investor 

[Andrew Postell]

@Benjamin Sulka when we speak about multifamily properties the FHA loan will trump the conventional loan in one really important way - the downpayment. Let's assume you are looking at a 4-plex: FHA has a 3.5% downpayment (in most scenarios) and conventional will have a 20% downpayment (in most scenarios).

So if I'm analyzing a $400,000 property....that's $14,000 down vs. $80,000 down. That's a big difference. Even if you could afford to bring $80,000 (plus your closing costs) most financial planners would say to use the lower amount and invest the difference somewhere else. There's always exceptions....but FHA is usually the best choice for most people when purchasing a multifamily property.

Hope all of that makes sense.