Question 1

Can I switch from FHA to conventional later?

Accepted Answer

Yes, through a refinance once you have 20% equity. You'll eliminate FHA mortgage insurance and likely improve your rate if credit has strengthened.

Question 2

Which loan closes faster in San Jose?

Accepted Answer

Conventional typically closes 3-5 days faster because FHA requires additional inspections. Sellers notice this timing advantage when reviewing offers.

Question 3

Do both loans allow the same property types?

Accepted Answer

Conventional accepts condos, townhomes, and single-family homes more easily. FHA has stricter condo approval requirements that eliminate many San Jose complexes.

Question 4

How much does credit score affect my rate?

Accepted Answer

Conventional rates drop significantly from 680 to 740 credit—often 0.5% or more. FHA rate adjustments based on credit are much smaller.

Question 5

Can I use gift funds for down payment with either loan?

Accepted Answer

Both allow gift funds from family members. FHA accepts gifts for the entire 3.5% down payment with proper documentation.

Conventional vs FHA Loans in San Jose: Which Mortgage Fits Your Budget?