Are their benefits with an FHA vs Conventional Loan ?

[Alyssa Davis]

I'm looking to buy my first property as a buy and hold, with the intention of fixing it up (minor repairs needed) and either house hacking or renting out the entire place. I have a great credit score and have been pre-approved for a conventional loan with as little as 3% down (although I'd plan to put down at least 5%).

The conventional loan seems very advantageous because most sellers don't seem to want to deal with the FHA/prefer conventional or cash & can demand it in a very competitive market (Sacramento CA), the PMI would automatically go away once I'm 20% in (vs having to refinance into a new loan with FHA), etc.

With this in mind, is there any reason I should even consider an FHA. Are their benefits that I can take advantage of (assuming I plan to live there for a >= a year and rent out the other bedrooms/house hack) that I don't get with a conventional loan, or is FHA really only beneficial if you don't have good credit?

[Chris Davidson]

@Alyssa Davis like @DJ Dawson said if you are looking at doing a SMF with low down you will have to do FHA otherwise it would just come down to cost to me and I would say conventional will work out best for you.

And if you go the SMF route you will most likely run into sellers not wanting FHA loans so back at conventional.