3% down or 20% down?

[Chance B.]

Hello World! I'm new to BP and from what I hear this is the absolute best place to get helpful information.

I am preparing to purchase my first SF to house hack through a Conventional loan with my bank. I can comfortably put down 3.5% and cover closing cost, inspection, appraisal, ect. BUT I also have the ability to use private funds from a family member to put down 20%. I will most likely be keeping this property for an extended period of time but do not plan on making any new deals in the near future. In your opinion, should I leverage my money and just pay the extra +/- $180 in PMI each month, or take the money and pay back my lender at a later time.

      The Financing is still all in the "just thinking about it" phase and I have not ran any numbers or spoken the lender about repayment (monthly/quarterly/yearly/lump-sum or even an expected pay-back date.) I'm sure I can set my own terms on repayment in fact they are offering it INTEREST FREE (of course I always pay back more than I take.)

[Matthew Brill]

I would go with the lower down payment. If you can get conventional financing at 5% or less and the PMI will fall off when you hit a low enough LTV. You can hold off on your potential private loan for a house hack in another year if you haven't saved up enough for the next DP by then (tip: make sure you have that money in your bank account for more than 2 billing statements so you don't have to source the money or use it as a gift). You could also have the money as a source of reserves should something happen early on in the property, or even use it as rehab funds if you find a value add deal.