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Pros and Cons of FHA loan for Home


Senior Member
7+ Year Member
15+ Year Member
Aug 6, 2003
I "THINK" that most FHA programs are going to require the buyer to carry mortgage insurance. And a conventional loan most buyers will pay down enough to not require mortgage insurance. I COULD BE WRONG. Just trying to help.
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Senior Member
15+ Year Member
Nov 28, 2001
Lower down payment (3% I think)
Easier to qualify for

Higher down payment
PMI is required (though this will probably be required of any lender)
FHA has a higher threshold on the home inspection/appraisal
Fewer loan options (no 5/1 or 7/1 arms)

My advice is to get approved for both kinds. Then you can make a decision based on your situation. When I bought a house, the seller did not want to sell to an FHA loan, due to a defect in the house. It was no big deal to us, but it was a big deal to the FHA people. So we went with a conventional loan.


Junior Member
7+ Year Member
15+ Year Member
Feb 17, 2004
One nice thing about FHA loans and the required PMI is as follows: Any lender requires PMI until either the equity or the amount you have paid into principal = 20% of initial loan value. My wife and I had a home built using an FHA loan because it is much easier. Here's the advantage.....we recently refinanced to a 3/1 ARM and got a REFUND CHECK from HUD for 90% of the PMI we paid in for the loan -- this more than covered closing costs. As it turns out, PMI is refundable in a decrementing amount up to year 7 of an FHA loan (then it is 0% refund). :wow:
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