FHA vs conventional loan

[Amy Lee]

What would be the perks of using an FHA loan to househack on a multi family home (duplex-triplex)? There's the lower down payment but that makes your mortgage higher, you have to pay the the PMI (I forgot the term on FHA loans) for less than 20% down payment that lasts the life of the loan in my understanding, paperwork can be a lot I hear, and takes longer to close. So the only benefit is the lower down payment which you can do on a conventional loan also. Can someone educate me? Thank you!!

[Andrew Postell]

@Amy Lee I need to provide some clarification on your post if you don't mind.

1. Downpayment - there is no 5% downpayment using a conventional loan with a 2-4 unit property.  A few years back there was, but there hasn't been that option for a while now.  So your options using a conventional loan are 15% down with a duplex as your own primary home and 20% down with a 2-4 unit property. 

2. FHA Rules - now FHA has this rule called the "self-sufficiency" rule on 3-4 units properties. This rule basically states that the rents have to be OVER the mortgage payment. And since rates are so high right now, and properties are so expensive, satisfying the "self-sufficiency" rule is next to impossible. And that means no FHA loans on 3-4 unit properties right now. This is an economic environment problem that will not always be around but be aware of this. Keep in mind that this does not apply on duplexes.

I know that was a lot but feel free to ask anything additional.  Thanks!