The best loan is what works best for the borrower and their needs. However, if your asking as a realtor who represents sellers your point of view might be very different. As a seller you probably want to avoid government loans as they often require follow up inspections and repairs which could end up costing the seller money. You're also usually looking at buyers with very tight assets and a low appraisal is more likely to result in re-negotiating price during the process. Government loans are great for certain borrowers but certainly not all.

As for what's best for the borrower / buyer: The best rate and lowest expense for mortgage insurance weigh heavily into the decision. For those with low down payments and credit scores below 700, FHA loans usually fare well as a buyers better option. The FHA is also more tolerant of serious recent delinquencies and my be the only choice for certain borrowers. As a borrowers credit score and down payment rise, conforming loans become more competitive.

I would be happy to assist you or anybody you may work with to thoroughly evaluate options and which might be best.

Don Rizzo / Sun Mortgage