Conventional vs FHA
FHA loans (3.5% down, owner-occupancy required) fund house-hacking your primary residence. Conventional investment loans (20-25% down, no occupancy requirement) fund stabilized rental purchases. House-hack with FHA first, then conventional for your second-onward investment properties.
| Conventional | FHA | |
|---|---|---|
| Speed to close | Conventional: 30-45 day close. | FHA: 30-45 day close. |
| Cost | Conventional: 6-7.5%, 20-25% down. | FHA: 6.5-7%, 3.5% down + lifetime MIP. |
| Qualifying | Conventional: 680+ FICO, DTI, 2 years tax returns. | FHA: 580+ FICO, owner-occupancy required at origination. |
| Best use case | Conventional: investor's 2nd+ properties (non-owner-occupied), first 10 financed. | FHA: house-hacking a 2-4 unit primary residence with 3.5% down. |
Which to use when.
FHA first for your house-hack. Conventional investment loans for properties 2-10. The two work sequentially in a normal investor lifecycle — there's rarely a "vs" decision; it's "which first."
Frequently asked.
What's the difference between conventional and fha loans?
FHA loans (3.5% down, owner-occupancy required) fund house-hacking your primary residence. Conventional investment loans (20-25% down, no occupancy requirement) fund stabilized rental purchases. House-hack with FHA first, then conventional for your second-onward investment properties.
Which is cheaper — conventional or fha?
Conventional: 6-7.5%, 20-25% down. FHA: 6.5-7%, 3.5% down + lifetime MIP.
Which closes faster?
Conventional: 30-45 day close. FHA: 30-45 day close.
When should I use conventional vs fha?
FHA first for your house-hack. Conventional investment loans for properties 2-10. The two work sequentially in a normal investor lifecycle — there's rarely a "vs" decision; it's "which first."
More head-to-head.
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