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  • Low down payment required (3.5 percent minimum)

  • Can go as low as 500 credit score (620 minimum for conventional)

  • Not limited to 43 percent for debt-to-income ratio (qualified mortgage rule applies for conventional loans)

  • FHA loans are assumable

  • FHA loans are eligible for ”streamline” refinances

  • Shorter timeframe following major credit problems (3 years vs. 7 years for foreclosure and 2 years vs. 4 years for bankruptcy)

  • FHA loans typically will have a lower base interest rate than a comparable conventional loan

  • Non-occupant co-borrower (relative) may be used for qualifying by blending ratios



  • Low down payment required (3 percent minimum)

  • Mortgage insurance is required for loans exceeding 80 percent loan-to-value (Mortgage insurance is required on all FHA loans regardless of the loan-to-value)

  • Conventional mortgage insurance is only monthly or single premium (FHA is upfront and monthly premiums)

  • Conventional mortgage insurance will automatically end at 78 percent loan-to-value (FHA will stay for the entire life of the loan)

  • Conventional mortgage insurance is credit sensitive (For FHA, one premium fits all)

  • Conventional loans can cover much higher loan amounts (FHA over county limits)

  • Even though conventional loans may have higher interest rates, their monthly payments may still be lower

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