Looking to buy first property, FHA or 20% down?

[Michael Bru]

Hello all, first post! I moved for work into a fairly hot market for real estate, Asheville NC, and I’ve been seriously considering real estate in the area as people are coming here in droves. I don’t have a ton of capital, as I’ve been maxing out my tax-deferred accounts for the last few years, but I’m willing to slow it down a tad. Part of the reason is because of my relocation package. The relocation packages states it will: “reimburse normal and customary closing costs not to exceed 5% of new purchase price”. The main reason is because I want some diversification in my assets.

How big of a deal is this? I've heard closing costs can be around 5% of the purchase price. Is this what people usually pay? I would have to purchase the property by September of 2019 for this reimbursement to be valid. I might not have 20% down for a multi-family by then, which is the property type I'm eyeing, so the biggest question I have is with the reimbursement potential. Is it best to hop in with a FHA loan if I see a deal, paying the PITI, or would it be more advantageous for me to save up the 20%, saving myself the PITI, even though I would be paying closing costs if my down payment isn't big enough down the road? If it matters, I have excellent credit (around 800).

Thanks for any advice and please let me know if I need to clarify anything!