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in Redding, CA
Redding buyers choosing between conventional and FHA loans are really deciding between down-payment flexibility and long-term cost. Conventional loans typically require 5% to 20% down. FHA loans let you go as low as 3.5% down.
The 2026 conforming limit for Redding is $832,750. FHA caps out at $541,287 in this county. If you're buying under $541,287, both programs are available. Above that, conventional is your only choice.
Conventional loans reward buyers with cash saved or strong equity. Put down 20% and you skip mortgage insurance entirely. Put down 5% to 19% and you'll pay PMI until you hit 80% loan-to-value.
Conventional works best when you have breathing room in your down payment. The monthly payment stays lower long-term because PMI drops off.
FHA loans open the door for buyers with limited savings or lower credit scores. The 3.5% down payment is the real draw. You'll pay mortgage insurance, but it's built into the loan.
The catch: FHA mortgage insurance never goes away. You're paying it for the entire loan term, even after you've built equity. FHA also maxes out at $541,287 in Redding, so it's not an option for higher-priced homes.
Down payment is the first fork in the road. FHA lets you start with 3.5% down. Conventional wants at least 5%. If you have less than $15,000 saved for a typical Redding purchase, FHA keeps more cash in your pocket at closing.
Mortgage insurance is the long-term cost driver. Conventional PMI drops off once you hit 80% equity. FHA mortgage insurance sticks around for the full loan term. On a 30-year loan, that's a meaningful difference in total interest paid.
Choose FHA if you're putting down 3.5% and your credit is below 680. Shasta County's median household income is $71,931. If you're near that figure and saving for a down payment is slow, FHA's lower barrier gets you into a home faster.
Choose conventional if you can put down 5% or more and your credit is 680 or higher. You'll pay PMI initially, but it vanishes once you reach 80% equity. If you're buying above $541,287, conventional is mandatory.
Yes. FHA accepts credit scores as low as 580. A 600 score is well within range. Lenders may ask for explanation letters if you've had late payments, but FHA is more forgiving than conventional on credit history.
Yes. FHA mortgage insurance (MIP) stays for the life of the loan, even after you've paid down the principal significantly. Conventional PMI cancels at 80% LTV, making it a better long-term choice if you can qualify.
FHA: 3.5% down. Conventional: 5% down. Both are available in Redding. FHA's lower down payment saves cash at closing but adds permanent mortgage insurance. Conventional's higher down payment requirement is offset by PMI cancellation at 80% equity.
No. FHA's 2026 limit in Shasta County is $541,287. Conventional goes up to $832,750. If you're buying above $541,287, conventional is your only option. FHA is off the table for higher-priced homes.
It depends on your down payment and loan amount. FHA's 3.5% down means a larger loan balance, which can offset the lack of PMI. Conventional with 20% down typically has the lowest payment. Get quotes on both to compare your specific scenario.