FHA versus Conventional For Owner Occupied.

[Jerry Padilla]

FHA reduced their MIP (Mortgage Insurance Premium) to become more competitive in the market as Fannie Mae reduced their down payment to 3% for conventional mortgages. FHA requires 3.5% down payment. This is for case numbers assigned after 1/26.

There are pro's and con's with both of these financing options:

FHA allows up to 6% sellers concessions and will be more aggressive with DTI's. FHA MIP is still for the life of the loan.

Conventional is only up to 3% sellers concessions, but with a better credit score PMI (Private Mortgage Insurance) could be lower than 0.85%. It all depends on your credit score. Conventional PMI can be removed once you hit 80% or below LTV.