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in Patterson, CA
Patterson buyers have two main paths to financing: conventional or FHA. Each fits a different borrower profile.
HousingWire flagged the 30-year fixed hitting 6.57% — that spread between conventional and FHA rates matters more now. Rates vary by borrower profile and market conditions.
Conventional loans aren't backed by any government agency. Lenders take on the risk, so they set tighter standards.
You need at least a 620 credit score. Put 20% down and you skip private mortgage insurance entirely — that saves real money monthly.
FHA loans are insured by the federal government. That backing lets lenders approve borrowers conventional programs would turn away.
You can qualify with a 580 credit score and 3.5% down. Drop to 500-579 and you still qualify — but lenders require 10% down.
The biggest practical difference is mortgage insurance. FHA charges MIP upfront and monthly — often for the loan's full term. Conventional PMI drops off once you hit 20% equity.
Credit flexibility cuts the other way. FHA accepts scores down to 580. Most conventional lenders want 660+ for competitive pricing, even if 620 technically qualifies.
If your credit is below 660 or your down payment is under 5%, FHA usually wins. The easier qualification outweighs the extra insurance cost.
Strong credit and 10%+ saved? Run both scenarios. Conventional often comes out cheaper over time once you factor out the permanent MIP on FHA.
Both offer low down options. FHA requires 3.5% at 580+. Conventional goes as low as 3% but needs stronger credit.
Not easily. Most FHA loans carry MIP for the full loan term. Refinancing to conventional is the common exit strategy.
FHA is often the starting point with limited credit history. But if you qualify conventionally, compare total costs — not just the rate.
Yes. FHA appraisers flag safety and structural issues that conventional appraisals might overlook. Older homes can create delays.
Above 720, conventional pricing is hard to beat. Below 640, FHA usually gives you better terms and a real path to approval.
No. FHA and conforming conventional limits are set separately by the FHFA and HUD. Check current Stanislaus County limits before you shop.