Loading
in Millbrae, CA
Millbrae buyers face a choice between conventional and FHA financing. Each loan type serves different borrower profiles and property goals.
Conventional loans reward strong credit with lower costs. FHA loans open doors for buyers with smaller down payments or past credit issues.
As of February 2026, rates near 4-year lows make both options worth considering. The right choice depends on your cash reserves and credit standing.
Conventional loans require 620+ credit and at least 3% down. Put down less than 20% and you'll pay PMI until you hit 20% equity.
These loans cap at $832,750 in San Mateo County without jumping to jumbo territory. They cost less long-term if you qualify.
Lenders typically want lower debt-to-income ratios. Expect tighter income verification and reserves for investment properties.
FHA loans accept 580 credit scores with 3.5% down. Go as low as 500 credit with 10% down, though few lenders work that range.
You'll pay an upfront mortgage insurance premium of 1.75% plus annual MIP for the loan's life on most purchases. That's the trade-off for easier entry.
FHA allows higher debt ratios and accepts gift funds more liberally. The loan limit in San Mateo County matches conventional at $832,750.
Credit requirements split these loans apart. Conventional wants 620+; FHA goes to 580. That 40-point gap matters if you've had recent credit issues.
Mortgage insurance works differently. Conventional PMI cancels at 20% equity. FHA MIP sticks around unless you refinance later.
Property standards differ too. FHA requires stricter appraisals that can kill deals on fixer-uppers. Conventional gives you more property flexibility.
Choose FHA if you're under 640 credit or short on cash reserves. The upfront and monthly costs hurt, but you get approved when conventional won't work.
Go conventional with 680+ credit and 5%+ down. You'll pay less over time and shed PMI sooner. This matters more on Millbrae's property values.
Run the numbers on both. Sometimes a borrower qualifies for FHA but saves thousands going conventional. Sometimes it's a wash and FHA's flexibility wins.
Yes, refinancing to conventional drops MIP once you hit 20% equity. Most borrowers do this after 2-3 years of appreciation or paydown.
Usually yes, but not always. Lower credit borrowers pay higher conventional rates. FHA can be cheaper if your score sits below 640.
Conventional typically moves quicker. FHA appraisals take longer and require more property repairs before closing.
No. FHA requires owner occupancy. Conventional works for rentals but demands higher down payments and reserves.
Yes, if the complex is approved. FHA maintains a stricter condo approval list than conventional lenders.