Orange County FHA, VA & First Time Buyer Loan Information: FHA Versus Conventional Financing with PMI | Orange County, CA

My goal is to provide valuable information for home buyers, both First Time Buyers and Move Up Buyers. This information will be about loan programs such as FHA ,VA, Conventional Fannie Mae and Freddie Mac, Reverse Mortgages, and even Portfolio Jumbo programs. I will also touch on tax advantages of homeownership, Rent vs. Own analysis, and any other aspect of loans and home ownership that will be of interest to Orange County home buyers and homeowners.

FHA Versus Conventional Financing with PMI | Orange County, CA

FHA financing has been a savior for Orange County homebuyers since the collapse of the mortgage industry in 2007. Prior to 2007 it was easy to buy a home in Orange County with $0 or very little down payment. But then things changed and low down payment Conventional financing went away. Private Mortgage Insurance companies struggled and would not insure 95% loan to value loans in most of California. But FHA came to the rescue. Not only did FHA allow for only 3.5% down payment, but also increased their loan limits to accommodate high priced areas like Orange County, CA.

Private Mortgage Insurance Makes a Comeback

Recently PMI companies have been more aggressive with their underwriting. While Fannie Mae guidelines allow for a 3% down payment, until recently you couldn't find a PMI company willing to insure the loan. Now, companies like MGIC, Radian, and United Guaranty will insure these high loan to value deals. Also, the insurance rates are very favorable when compared to the now increased FHA Mortgage Insurance rates.

97% Condo Loans- and It's not FHA

Today, in November 2011, only 10% of condo projects in Orange County that were FHA approved in 2010 are still FHA approved. FHA has dramatically tightened their Condo project approval guidelines. This has made it very difficult for a first time buyer to purchase a condo. It has also made it very difficult to sell a condo. But now it is possible to get a Conventional loan on a condo with only a 3% down payment. It is even possible to pay the PMI one time up front.

First Time Home Buyers Need to Compare

It is important to check all your options when researching loan programs. FHA may be the best option for some people while a Conventional loan with PMI is best for someone else. It is important to find a local Orange County loan officer who can prepare custom loan scenarios along with a side by side analysis of the available options. And of course, getting Preapproved for a mortgage is required before making an offer on a home.

Authored by Tim Storm, an Orange County, CA Jumbo Mortgage Loan Officer MLO 223456– Please contact my office at Home Point Financial for more information about an Orange County, CA Mortgage. 949-829-1846.

Contact us for your Orange County Mortgage:

949-829-1846 | tstorm (at)

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Comment balloon 2 commentsTim Storm • November 25 2011 02:39PM


YOu are absolutely correct.  Even with FHA rates lower than conforming the payments are lower with PMI.  I was surprised to see that PMI the company filed for BK this week.

Posted by Jeff Jensen (The Federal Savings Bank/Lending in 50 states) over 7 years ago

I think PMI (the company) had too much baggage left over from before 2007. Hopefully some of the other Private MI companies, like Radian, MGIC, and United Guaranty Insurance, can continue to come out with competitive insurance programs. Especially with the latest rumors from HUD of increasing FHA mortgage insurance even more.

Posted by Tim Storm, Orange County FHA and VA Home Loan Specialist (Fairway Independent Mortgage Corporation) over 7 years ago