FHA vs Conventional + HELOC

[Ireneusz Slonina]

Hello BP!!

I'm searching for my first property, and considering FHA loan and 203k. Few days ago I came across bank owned house with price tag of $300k. After research and two visits to house (in Sayville, NY) there is interesting situation developing: this property is in very good condition, and need only some paint and few gallons of clorox, utilities are off, comparable houses in area were sold for #380-420k.

After having conversation with my agent, she suggest not going in to FHA loan, but instead try conventional with 5% down, and getting HELOC after 6 months of occupation. This would allow us to further update house, without expenses of going in to FHA procedures.

Please let me know what are your thoughts about FHA vs CONVENTIONAL + HELOC.

Thank you all.