Mortgage Down Payment

[Robert Stamper]

Hi all, 

I'm advising a young couple that is 1) buying their first home and 2) interested in building a real estate portfolio of SF rental homes. I know they can get a first time buyer mortgage at 3.5% via the FHA program but I have a couple of questions

1) If they get an FHA loan with 3.5% down, will they have to pay PMI?

2) A year from now, I am advising them to rent that first SF home and go get another home as their primary home due to better financing you can get on primary homes  They should do this every year for 10 years.  I wish someone had given me that advice 25 years ago :)  What terms can they expect when they buy the second home as a primary residence?   Will they have to put down 20% or can they put down less?

Thanks!

Robby