FHA or Conventional 5% with No PMI

[Katherine Tilley]

My husband and I are buying a our first two-family house-hack. We have two lenders: one that offers the typical FHA 3.5% down and another local bank that offers a conventional 5% down, both 30 year fixed-rate. The local bank's mortgages never change hand so they are able to not charge any PMI. We feel the 5% conventional is a no-brainer because no PMI will allow for a higher NOI and the possibility of not necessarily refinancing when we move onto our second house-hack, assuming we are able to save up enough for the next down payment and closing costs.

This being our first house-hack, I’m wondering if anyone has any advice or can maybe offer insight to something we might be overlooking?