What are your experiences/opinions using a FHA Loan?

[Christian Solinski]

Hello BP,

What are your experiences/opinions about using a FHA loan over conventional financing? Which scenario is better, in your opinion: (1) waiting a couple years to come up with 10-20% for a down payment or (2) getting in right now with as little cash invested on my end?

My goal is to buy a duplex, triplex or fourplex using a FHA loan. Cash flow is very important; that said, at a minimum, I would like to live there for free. I have been having trouble figuring out Cash-on-Cash Return and Cash Flow with this extra level of complexity aside from conventional lending. There are all these additional costs with going the FHA loan route.

I have two main questions:

• Is Mortgage Insurance (MIP) determined by the down payment or is it fixed? If the down payment is higher, does that mean the MIP will tend to be lower?
• Will it be more difficult to find a duplex, triplex or fourplex using a FHA loan for financing if all the units have tenants in them, given the fact that FHA loan requires the owner to live in the property for a certain amount of time

Feel free to ask questions back in order to help me better understand the process and benefits/drawbacks...

Thanks Y'all!