Rental Property Investor · NJ · Member since 2020 · 18 posts · 13 votes
I am in the process of getting approved for my first loan. I plan on buying a 2-4 unit and house hacking it. I am unsure which loan would be cheaper/the better one to use between a FHA loan and a 5% conventional loan.
Lender · Winlock, WA · Member since 2020 · 124 posts · 82 votes
4y
Well bad news a Conventional Owner occupied 2-4 unit is a 15%-25% down payment, even with a Conventional Affordable 2-4 unit the down payment is 15%. With that out the way, for a first time buyer not wanting to break the bank FHA is a great option as it is 3.5% down for 1-4 units. The downside is there is Mortgage Insurance for the life of the loan but this can be remedied by refinancing to a conventional after you build up 20% equity.
Real Estate Agent · Seattle, WA · Member since 2019 · 301 posts · 188 votes
4y
For 2-4 unit, FHA is the way to go. Conventional will have a higher down payment for 2-4 unit. If SFH house hack, 3-5% down conventional is my preferred way. @Torrell Palmason said it well