Is a 7/1 ARM ever a good idea?

[Dan Marr]

Hello,

A local credit union offers a loan program for first time home buyers with 10% down, no PMI, and a 2.25% 7/1 ARM. I plan to hold on to this house as a rental after living in it for a year or two. The low interest rate will help significantly with cash flow, but I am not sure if it is worth it with an ARM. I could always re finance before the 7 years are up, but do not want to be forced to sell at 7 years due to high interest rates if the property is still providing good cash flow as I expect it will. Would a 7/1 ARM be a good idea in this situation?

I could also put 10% down on a conventional loan with no PMI and take the normal interest rate probably around 3% and cash flow would work, but not as good and I will probably have to pay less for the house meaning my offer may not be accepted. Any help and guidance is very much appreciated!