Question 1

Can I switch from FHA to conventional later?

Accepted Answer

Yes, refinancing to conventional drops FHA insurance once you hit 20% equity. Most borrowers do this within 3-5 years.

Question 2

Which loan type closes faster in Tracy?

Accepted Answer

Both take 30-45 days typically. FHA can require extra property inspections that add a week in some cases.

Question 3

Do sellers in Tracy prefer conventional offers?

Accepted Answer

Some do because conventional has fewer property condition requirements. But a strong FHA offer with quick close beats weak conventional.

Question 4

Can I use gift funds for down payment with both?

Accepted Answer

Yes. FHA allows 100% gift funds. Conventional requires you contribute at least 5% from your own money at 5% down.

Question 5

Which has lower rates right now?

Accepted Answer

Rates vary by borrower profile and market conditions. Conventional typically prices better with 740+ credit as of February 2026.

Conventional vs FHA Loans in Tracy: Which Gets You Better Terms?