FHA vs Hard money
FHA loans (3.5% down, owner-occupancy required) are for buying a primary residence — including house-hacking a 2-4 unit. Hard money loans (10-20% down, no occupancy requirement) fund flips and rehab projects. They serve completely different purposes — owner-occupant home purchase vs. short-term investor financing.
| FHA | Hard money | |
|---|---|---|
| Speed to close | FHA: 30-45 day close (longer with FHA appraisal issues). | Hard money: 7-14 day close. |
| Cost | FHA: 6.5-7%, 3.5% down + lifetime MIP. | Hard money: 9-13% + 1-4 points. |
| Qualifying | FHA: 580+ FICO, owner-occupancy required. | Hard money: ARV + experience. Less personal qualifying. |
| Best use case | FHA: house-hacking a 2-4 unit primary residence. | Hard money: flips, rehab projects, investor acquisitions. |
Which to use when.
FHA if you can house-hack. Hard money for any non-owner-occupied investment property requiring fast close or distressed-condition purchase. The two rarely overlap in practice.
Frequently asked.
What's the difference between fha and hard money loans?
FHA loans (3.5% down, owner-occupancy required) are for buying a primary residence — including house-hacking a 2-4 unit. Hard money loans (10-20% down, no occupancy requirement) fund flips and rehab projects. They serve completely different purposes — owner-occupant home purchase vs. short-term investor financing.
Which is cheaper — fha or hard money?
FHA: 6.5-7%, 3.5% down + lifetime MIP. Hard money: 9-13% + 1-4 points.
Which closes faster?
FHA: 30-45 day close (longer with FHA appraisal issues). Hard money: 7-14 day close.
When should I use fha vs hard money?
FHA if you can house-hack. Hard money for any non-owner-occupied investment property requiring fast close or distressed-condition purchase. The two rarely overlap in practice.
More head-to-head.
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