Changes to FHA interest rates?

[Thomas Daly]

Hello! I am in the middle of my pre-approval process and my plans have encountered a bit of an obstacle.

I was planning on using FHA as a first time home buyer with the goal to owner occupy a duplex. This financing option fits me best as I do not have the capital to put down a 20% conventional loan for my target price range.

I was advised by my lender that for a owner occupied duplex my (very high) credit score qualifies me for the following conventional:

-15% down

-3.37% interest rate

-30 year fixed

I was told that this is the lowest down payment I could get for a conventional loan. And that the only other options for a lower down payment on an owner occupied duplex is a first time home buyer program that I do not qualify for because my salary is to high, and of course FHA.

I was told that FHA has changed given the current COVID19 situation and that FHA does not want to insure loans so they are making the terms high in the form of high interest rates.

I have searched the forums, twitter, google, etc, and cannot find firm data confirming this. I actually am finding the opposite on mortgage rate average websites that state FHA interest rates are still lower than conventional.

Does anybody have an idea on what is going on with FHA? I would love to use this financing option, but if the interest rates are high I guess I will just wait for COVID to slow down and hope the rates change.