FHA loan or conventional on a 1960s bungalow in Austin, I picked wrong

I put an offer on a 2-bed fixer in the Crestview area last month and had to choose between an FHA loan at 3.5% down or a conventional with 5% down and PMI that drops after 10 years. I went with FHA because the cash savings seemed huge at the time, but then the appraisal flagged some wiring issues the seller refused to fix, and the FHA inspection rules killed the deal. Now I'm stuck with a $400 inspection fee and no house, while my buddy with the same budget closed on a similar place using the conventional route. Has anyone else had FHA appraisal nitpicks sink a sale, or was I just unlucky with this specific house?

2 comments

2 Comments

felix_bailey4521d agoMost Upvoted

That FHA inspection rule bit me too, and it stings way more than the $400.

hall.ruby20d ago

@felix_bailey45 I'd pay that $400 again to have them actually catch the real problems.