Conventional vs. FHA - I have option to go Conventional 1st Home

[Maximillian Doctor]

I found out I have the option to go with a Conventional Loan over an FHA for my first house: Single-Family Rental (this would also be my first investment property)

I was thinking I would have to house hack for a year because of the FHA 1-year resident requirement. But, with a Conventional, would I need to still exercise a 1-year residence of the property? OR, could I just rent out the property right away, and avoid the necessity of a house hack?

I still may go the house hack route, but wanted to see what options I can take. It could allow myself to invest in additional properties via BRRRR method a little faster.

[Bradley Padula]

I'd do conventional if its a single family (5% down generally) and save the FHA loan for a 2-4 unit property. FHA allows you to do as little as 3.5% down on a 1-4 unit building. Versus conventional on a 2 unit is around 15% minimum down. That is why FHA loans are so powerful for 2-4 unit buildings

There are owner occupant loans where the 5% down payment is an option for conventional. Or there is conventional loan for an investment property, where the occupancy requirement for X number of months (that you see on owner occ loans) drops off because the property is an investment to be occupied by tenants but the downpayment needed can range from 15-25% and the interest rates are higher