Should I use a HELOC or FHA Loan?

[Cameron Christian]

Hey BP community, huge rookie here so bear with me.

Over the past month I have been looking into unique ways to finance my first property. I thought investing in real estate was many months or even years away from me and my wife but have recently realized that was a lie and now I have a couple of different options.

I just met with my mortgage guy who is an investor himself, he got me approved for an HFA loan of 3.125% interest with a 4% grant that will go toward downpayment and closing costs. ($12,0000 on a 300k house!)

My dad also has a Home Equity Life of Credit that I can use to get into my first property, then in a year we will refinance and pay back my dad. I do not know much about HELOCs, the interest rates on helocs, etc.

I am looking at homes in the 200k-300k price range in Fort Worth Tx.

We will likely live in the home for one year with the HFA loan then rent it out. But not sure what we would do if we used my dads HELOC to buy a home. Most likely live in it for a few months, fix it up, then rent it out.

Question: Which type of loan do you investors see as the smartest option for my situation?

[Kyle Mccaw]

Do the FHA. There are several reasons why. But basically lock in the low rate now. You will have to finance the deal later to pay back your dad and the rate will be higher with any other loan option. If you dad is looking to help that is awesome. Maybe he would be open to helping you get started in purchasing a rental or flip.

@Cameron Christian