Question 1

Can I switch from FHA to conventional later?

Accepted Answer

Yes. Once you build enough equity, you can refinance into a conventional loan and drop mortgage insurance. Many Watsonville buyers do this after 2-3 years.

Question 2

Which loan has a higher limit in Santa Cruz County?

Accepted Answer

Both conventional conforming and FHA limits apply at the county level. Ask us for current figures — limits update annually and affect what you can borrow.

Question 3

Does FHA require the home to pass an inspection?

Accepted Answer

FHA appraisals include a basic property condition review. Conventional appraisals focus on value. FHA is stricter on property condition.

Question 4

Is the down payment requirement the same for both?

Accepted Answer

No. FHA allows 3.5% down with a 580 score. Conventional goes as low as 3% but requires stronger credit and carries PMI.

Question 5

Which loan is better for a multi-unit property in Watsonville?

Accepted Answer

Both work on 2-4 unit properties if you live in one unit. Conventional typically has more flexible guidelines for multi-unit financing.

Conventional vs FHA Loans in Watsonville, CA