Our offer is actually all-cash so loan type won’t make a difference. We are then going to put financing on it.
Our reasoning behind the FHA structure is that I am of the opinion that cash is king, especially right now. The FHA loan is cheap money and the overall costs are minimal. If my fiancee gets the bonus she is expecting this year then we would use it to pay down the loan to less than 80% LTV and get rid of the insurance cost.
I have heard the interest rate is very close if not the same to traditional financing.
FYI the game plan is to hold the house for a few years then rent it out and buy our next house. Of course that all depends on where the market goes, where our jobs go, etc.