Choosing the right loan can change your monthly payment by hundreds of dollars and determine which Pittsburg homes are within reach. If you’re a first-time buyer, the FHA vs. conventional choice can feel confusing. You want clear answers on down payment, mortgage insurance, and how local costs in Contra Costa County affect your budget. This guide breaks it down in plain English and gives you a simple checklist to choose your best fit. Let’s dive in.
FHA and conventional in plain English
FHA loans are government-insured and designed for owner-occupants. You can buy with a smaller down payment and more flexible credit standards, and you must live in the home as your primary residence.
Conventional loans are backed by private investors. You can use them for primary homes, second homes, or investment properties. Some conventional options allow as little as 3 percent down for qualified first-time buyers, and mortgage insurance can be removed later.
What changes your total cost
Minimum down payment
- FHA typically requires 3.5 percent down for eligible borrowers.
- Conventional options vary. Some first-time buyer programs allow 3 percent down, while many buyers put 5 to 20 percent down to reduce or avoid mortgage insurance.
Mortgage insurance: MIP vs. PMI
- FHA has two parts: an upfront mortgage insurance premium that is usually added to your loan, and an annual MIP paid monthly. Duration depends on down payment and current HUD rules. In many cases with less than 10 percent down, MIP can last for the life of the loan. Always confirm current policy.
- Conventional private mortgage insurance (PMI) applies when you put less than 20 percent down. PMI can be canceled once you reach about 20 percent equity, subject to investor and federal rules.
What it means for you: FHA can unlock buying power sooner, but the long-term cost of MIP may be higher if you keep the loan for many years. Conventional PMI is often cheaper for strong-credit buyers and can drop off.
Interest rate and credit
- FHA rates are often competitive for buyers with limited down payment or lower credit scores because the loan is insured.
- Conventional pricing usually rewards higher credit scores and larger down payments. With strong credit, your conventional rate and PMI can be very favorable.
Rates change daily. Your exact pricing depends on your credit, down payment, loan size, and property type.
Loan limits in Contra Costa County
Both FHA and conventional conforming loans have county-specific limits that adjust yearly. These limits influence how far your loan can go before you enter jumbo territory. Check the current FHA and conforming limits for Contra Costa County before you shop so you know which price ranges fit each program.
Property and appraisal rules
- FHA appraisals include basic safety and habitability checks. If issues are noted, repairs may be required before closing. Some condo projects need FHA approval.
- Conventional appraisals focus on market value. Repair requirements are typically limited to items that affect safety or value.
If you’re eyeing a fixer, consider whether FHA’s standards or a rehab loan option will fit the property’s condition.
Seller-paid costs and concessions
- FHA allows seller credits within set limits, commonly up to 6 percent for certain closing costs.
- Conventional concession limits vary by your down payment, usually 3 to 6 percent.
Negotiated credits can reduce your cash-to-close, but they cannot exceed program caps or your actual allowable costs.
How these loans fit Pittsburg homes
Pittsburg offers a mix of condos, townhomes, and single-family homes. Here’s how FHA and conventional often map to the local market:
- Entry-level condos or smaller single-family homes: FHA can help you buy sooner with 3.5 percent down if you meet credit and occupancy rules. Confirm condo eligibility and any HOA requirements early.
- Typical single-family homes: Both FHA and conventional can work. Your choice may come down to monthly payment, MIP vs. PMI, and how long you plan to keep the loan.
- Higher-priced properties: Conventional may be more common if the price exceeds FHA county limits or if you want options for second homes or investment.
Your best fit depends on current loan limits, your personal budget, and the specific property.
Pittsburg-specific affordability checks
- Property taxes: Under California’s Proposition 13, the base property tax rate is about 1 percent of assessed value, plus voter-approved local assessments. Always use the total estimated tax rate for your monthly budget.
- Mello-Roos and special assessments: Some East Bay neighborhoods include additional district taxes. These are part of your monthly housing expense and impact how much you qualify for. Review the tax bill and disclosures before you write an offer.
- HOA dues: Many condos and townhomes carry monthly dues that affect your payment and qualifying. Ask for the current HOA amount and any pending assessments.
- Earthquake and hazard insurance: Lenders do not require earthquake insurance, but it is strongly recommended in Contra Costa County. Include a realistic estimate for your overall risk planning.
- Transfer taxes and fees: Confirm any city or county transfer taxes and who typically pays which portion in your specific contract.
Which loan fits you? Quick checklists
FHA may be a good fit if
- You want to buy now with a smaller down payment.
- Your credit profile benefits from FHA’s more flexible guidelines.
- You plan to live in the home as your primary residence.
- You are comfortable with the property meeting basic safety standards.
Conventional may be a good fit if
- You have strong credit and at least 3 to 5 percent down.
- You want PMI that can be removed as you build equity.
- You might buy a second home or future investment property.
- You are purchasing a condo that is not FHA approved or a property that needs fewer condition-related hurdles.
A simple cost comparison template
Use this template to compare estimated monthly costs. Replace each item with your actual numbers from a lender pre-approval and property disclosures.
- Principal and interest
- Loan amount × monthly interest factor using a standard mortgage formula.
- Compare quotes for both FHA and conventional.
- Mortgage insurance
- FHA: add monthly MIP and include the upfront premium in your loan amount if financed.
- Conventional: get a PMI quote based on your credit score and down payment. Note when PMI could be canceled.
- Property taxes
- Use the estimated total tax rate for the property, not just 1 percent. Divide by 12 for a monthly estimate.
- Homeowners insurance and HOA
- Add your monthly homeowners insurance and any HOA dues.
- Special assessments
- Include Mello-Roos or other listed assessments from the tax bill.
- Cash to close
- Down payment plus estimated closing costs in California, often 2 to 5 percent of the purchase price, minus any agreed seller credits.
Tip: Run a sensitivity check. If you increase your down payment enough to reach 20 percent on a conventional loan, your PMI can drop to zero, which reduces your monthly payment.
Last updated: January 2026. Confirm current loan limits, MI rules, and rates with your lender.
Down payment help for first-time buyers
- State programs: CalHFA offers down payment and closing cost assistance paired with FHA or conventional loans. Programs and income limits change, so verify the latest details and timelines.
- Local options: Contra Costa County, City of Pittsburg, and non-profit partners may offer down payment assistance or Mortgage Credit Certificates when available. Check current eligibility, funding windows, and resale or occupancy rules early in your search.
These programs can reduce your upfront cash, but they come with guidelines. Build them into your planning and offer strategy.
How to choose your best option in Pittsburg
- Get pre-approved with a trusted lender. Ask for side-by-side FHA and conventional scenarios that include MIP/PMI, taxes, HOA, and any special assessments.
- Match the loan to the property. If a home needs work, discuss condition requirements and whether a rehab option is appropriate.
- Think about how long you will keep the loan. If you expect to refinance or move within a few years, PMI that can drop off may matter. If you plan to hold long term, compare the lifetime cost of MIP vs. PMI.
- Confirm loan limits and local costs. Know the current FHA and conforming limits for Contra Costa County and the typical tax rates in the neighborhoods you like.
- Use assistance programs wisely. Layering down payment help can be powerful, but timing and eligibility matter.
Ready to take the next step?
You do not have to figure this out alone. Our team pairs neighborhood expertise with integrated lending support so you can compare FHA and conventional with clear numbers and real Pittsburg listings. If you want a practical, step-by-step plan from pre-approval to keys, connect with MVP Real Estate.
FAQs
What is the main difference between FHA and conventional loans?
- FHA is government-insured with flexible credit and low down payment for owner-occupants. Conventional is privately backed, can be used for more property types, and allows PMI removal as you build equity.
Can I buy in Pittsburg with 3 percent down?
- Possibly. Some conventional first-time buyer programs allow 3 percent down if you qualify, while FHA typically requires 3.5 percent down.
How long does FHA mortgage insurance last on a new loan?
- FHA has upfront and annual MIP. Duration depends on down payment and current HUD rules, and in many cases under 10 percent down it can last for the life of the loan.
When can I remove PMI on a conventional loan?
- PMI can be canceled around 20 percent equity under federal and investor rules, subject to payment history and value verification.
How do Mello-Roos taxes affect my budget in Pittsburg?
- Lenders include special assessments in your monthly housing cost and debt-to-income ratio, which can reduce the price you qualify for.
Will an FHA appraisal make it harder to buy a fixer?
- FHA requires basic safety and habitability. If a home needs repairs, you may need them completed before closing or consider a rehab loan option.
What local costs should I plan for besides principal and interest?
- Plan for mortgage insurance, property taxes, homeowners insurance, HOA dues if any, and any special assessments or transfer taxes noted in your disclosures.
