While nobody is going to argue that FHA home loans have become more expensive in 2017, FHA mortgages still have an edge over conventional loans in a number of areas. From the get-go, an aspect in favor of FHA loans is that they are assumable. This is a great selling point whenever you decide to put your home (or 2 to 4-unit property) up for sale as mortgage rates are expected to rise in 2017. More offers to buy your home usually translates into a higher selling price. If people only look at a few elements of conforming loans, they may not understand what really is the best loan for them.

More Reasons Why FHA is Still Attractive FHA loan credit scores can be as low as 580 although lenders may have credit score overlays to strengthen their ability to stay a direct lender. Now there a very few lenders who offer loans to borrowers who have scores as low as 500. Your local bank certainly won't. Only a mortgage broker or lender has that product.

FHA allows a down payment of just 3.5 percent, based on HUD guidelines. This is on not only single family homes, but also two to four-units which is a tremendous advantage over conventional loans.FHA loans allow a non-occupant co-borrower while a conventional loan does not accept this borrower flexibility.

If you are buying a home with an FHA loan, the seller is able to pay up to 6 percent of the loan amount for the buyers' closing cost. As opposed to the sellers only able to pay up to 3 percent. Those are quite a few advantages that home buyers cannot turn a blind eye to. A low interest rate, low scores, low down payment, and paying for the buyer's closing costs

Why you may not want an FHA loan

Mortgage Insurance & FHA are like PBNJ. No matter what size down payment you make, every FHA loan is accompanied by mortgage insurance, whereas conventional loans require the borrower to have mortgage insurance with less than 20-percent down. A borrower is able to remove mortgage insurance later once the loan reaches 78% of the appraised value. With an FHA loan, the mortgage insurance is there for the life of the loan.