re: Short/No Credit History Mortgage?

With FHA loans you get stuck with PMI and you'll have to pay a year of it up front at closing. With the new rules on FHA loans you'll have to redo with another loan to get out of paying PMI. More closing costs to deal with. Additionally the 3.5% down can be misleading. I had my closer work up a few huds and I could bring in less money at closing with a 5% down payment and no PMI required through a credit union. In fact the money I had to bring in at closing wasn't far behind the 10% down payment at the credit union. I went that route. Rate was slightly higher but I started with 10% equity as opposed to 3.5% and no PMI so my monthly obligations are lower as well. FHA loans take longer to close on as well. A lot of government rwd tape.

I'd advise you stay far away from that terrible idea.