All Forum Posts by: Scott Nguyen

FHA is great for 2-4 family properties that you live in. Conventional (non-portfolio) loans require 20%+ even if owner occupied. You will pay mortgage insurance premiums up front as well as monthly. I did an FHA on a duplex back in 2012 and paid maybe 1,800 up front and 130 per month on a $180k loan. Another down side is you need to wait a full 5 years until the monthly mortgage insurance is removed, and only if you are at 22% equity based on original appraisal. For small multi family properties, FHA is a great option! (the rules may have changed since 2012 so do not take my word for it!). Best of luck!

That information was accurate in 2012, but is not accurate today.

- Today, if you elect to do 3.5% down with FHA, the mortgage insurance is there for the life of the loan. You have to sell or refinance to drop it, and rates are trending upward at present, meaning in all probability you'd be refinancing at a higher rate.

- Today, there are conventional options for 2-4 unit that are as little as 5% down without the permanency of FHA mortgage insurance.

Lurkers, mortgage guidelines change constantly, take anything from more than a year ago with a grain of salt!

@Chris Mason, Thank you for the clarification! What are some conventional options do you recommend? I'm currently in Hawaii's market so a 20% down payment is a lot for me.

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@Nelson Del Castillo Thank you for the clarification! If you don't mind me asking, how does the 203K loan work? Is there a limit in how much rehab cost they can fund? How does that affect my overall mortgage?

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Hello Everyone,

I'm a new investor looking to purchase my first property. I have heard about FHA loans and wanted to learn more about the pros and cons of it. I understand you get to put down a low down payment and that the credit score requirement is quite generous, but are there any other drawbacks I should be aware of?

It sounds too good to be true.

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All Forum Posts by: Scott Nguyen

Scott Nguyen has started 7 posts and replied 16 times.

Post: Using equity or use cash for second property.

Post: Using equity or use cash for second property.

Post: FHA Loans Question Pros and cons

Post: FHA Loans Question Pros and cons

Post: FHA Loans Question Pros and cons

Post: FHA Loans Question Pros and cons