FHA Loan vs Conventional

[Steve J.]

Hello BP!

Can you put less than 20% through a conventional loan on a 2 unit multi family? I’m a first time home buyer.

Thanks,

[Eric Veronica]

@Steve J. Generally you will find a lower rate for FHA however FHA has other costs beyond rate that need be considered. A conventional loan with less than 20% down will charge monthly PMI however that PMI will fall off once you hit a certain loan to value. FHA on the other hand typically charges a 1.75% funding fee at closing. FHA also has monthly PMI which in most cases will never all off. Unless you will refinance you will likely need to make the FHA monthly PMI throughout the life of the loan.