Questions on Conventional loan vs FHA loan for 5% down for rental investment

[Haley Jang]

Hello BP, 

I am currently working and living in Seattle, while my boyfriend is moving to Chicago for his school. I have been exploring the idea of House Hacking through Multi-Family Homes in Seattle, but it seems that the housing market in Chicago is much more affordable (Looking for areas like Wicker park, Logan square, or similar areas).

From what I understand, I might not be eligible for an FHA loan in Chicago since my primary residence is still in Seattle, and my work is tied to that location, even though my job allows me to work flexibly from Chicago.

Considering this situation, my other option would be to pursue a conventional loan with a 5% down payment. However, I am concerned that I may encounter challenges in finding lenders and could potentially face higher mortgage rates, despite having an excellent credit score, being debt-free, and having stable employment in a prominent tech company for several years.

My goal is to invest with the lowest possible down payment for future investment opportunities, but I am willing to consider a 10% down payment if it is truly necessary. I would greatly appreciate any insights or advice regarding my situation. Thank you!

[Sherief Elbassuoni]

If you want low downpayment, FHA is the way to go. Loan officers and lenders will be asking for some documentation (from you and your employer) regarding the remote work