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What is the downside of an FHA loan?
- Must pay FHA mortgage insurance – both up-front as part of your closing costs and monthly as part of your monthly payment, paid for the life of the loan.
- More stringent property requirements – the house must be structurally sound and meet specific standards. If it is a fixer-upper, an FHA loan might not work.
- Must be your primary residence – FHA loans can not be used for vacation or investment properties.
- Limited loan size – the maximum loan amount is based on the property location.