USDA vs FHA vs Conventional 5% for duplex owner occupy?

[Paul Tibok]

Hello BP, new investor here about to put my first investment property under contract! I am owner occupying a duplex and my lender just informed me that I can use a USDA loan because of the county I will be purchasing in. I have the funds to go 5% conventional, FHA, or USDA so I have my choice here. I only plan on living at the property for a year or two. Any advice or opinions would be greatly appreciated, I am a newbie!

[James Yang]

Nice house hacking! I think this will depend on your goals and how much cash you have as well. If you don't have a lot of cash, then FHA/USDA would be the way to go for now since the low or no downpayment. Conventional is good if you have the 20% down to avoid PMI and you don't have to live there for a year or so before you can move out and rent out that unit. You can always do FHA/USDA initially and refinance out of that later via conventional once you have some equity built up. Then possibly just do FHA/USDA again on another 4 unit or less property with low or no money down. Just don't over leverage yourself and do your due diligence with the numbers along with having insurance. Overall, congrats!