First time home buyer considering FHA

[John Intfen]

First time home buyer looking to purchase a 4-plex in either Denver area or Houston. I have really good credit and make an above average salary to where I can't leverage income based loan programs.  

I am struggling to weigh the costs of UFMIP (1.75%) and a 1.85% Lender "load discount fee" when considering a 3.5% DP FHA loan vs. going with a smaller conventional loan for a more than likely smaller property. I can crunch the numbers and see if a property cash flows (with and without me occupying a unit) but what I don't know is how to weigh the merits of going FHA with all the fees (1.75% + 1.85%) and likely getting into a larger property earlier vs. waiting and saving for a smaller property a little bit later.

Does anyone have advice on this? Thanks! 
John

[Conner Olsen]

Hey @John Intfen, it is difficult to stomach the mortgage insurance that comes with FHA loans. I personally went with a 15% owner-occupied loan on my duplex in Austin, TX and I wish I had used an FHA 3.5% down. At the time I wanted a low down payment but I didn't realize how nice it would have been to have that extra 11.5% sitting in my bank account. I would have had to pay more monthly for the property but I would have felt more stable with the extra cash to use when necessary.

Like Kayla said, I would analyze both strategies and seeing which works better for your situation. Hope this helps!