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in Delano, CA
Delano buyers typically come to us with the same question: conventional or FHA? The right answer depends on your credit score, savings, and how long you plan to stay.
FHA wins on flexibility. Conventional wins on long-term cost. We see both close deals in Kern County every week.
Conventional loans aren't backed by the government. Lenders take on the risk, so they demand stronger borrower profiles — typically a 620+ credit score minimum.
Put 20% down and you skip private mortgage insurance entirely. That saves real money over a 30-year loan. Rates vary by borrower profile and market conditions.
FHA loans let you get in with 3.5% down and a 580 credit score. Scores between 500 and 579 can still qualify with 10% down.
The trade-off is mortgage insurance. FHA charges an upfront premium plus monthly MIP — and it sticks for the life of the loan unless you refinance out.
HousingWire flagged the 30-year fixed hitting 6.57% recently. At that rate, FHA's mandatory lifetime MIP makes it meaningfully more expensive than conventional over time.
Conventional PMI drops off at 80% loan-to-value. FHA MIP doesn't. For Delano buyers planning to stay 5+ years, that gap adds up fast.
If your credit is below 620, FHA is likely your only path. Don't force a conventional loan you won't qualify for.
Above 680 with at least 5% saved? Run the numbers on conventional. The monthly savings from avoided MIP often outweigh a slightly higher rate. Rates vary by borrower profile and market conditions.
FHA requires just 3.5% down with a 580 credit score. Conventional loans can go as low as 3% but require stronger credit.
Not easily. FHA MIP lasts the life of the loan in most cases. You'd need to refinance into a conventional loan to remove it.
Most conventional lenders want at least 620. Better rates kick in around 700 and above.
Some sellers prefer conventional offers. FHA appraisals have stricter property condition standards, which can complicate certain deals.
Depends on your credit and down payment. With strong credit and 20% down, conventional is almost always cheaper monthly.
FHA allows up to 4 units if you occupy one. Conventional also allows multi-unit purchases with the right loan structure.