It is true you will need to confirm that the condo is eligible for an FHA loan. However , I suggest you look carefully at all of the costs associated with the FHA loan. If there is a way to do a conventional loan with 20% down and you do a direct comparison of up-front and long term costs you too will see the benefits of the conventional loan. Condo financing is still difficult but more programs are opening up. The Mortgage Premium Insurance (MPD) on the FHA will alone should be enough to scare you. If you have to lower the cost of he home you are purchasing it might make sense.
If you have the ability to, put down the 20%.
Always at Your Service,
Tom Priester e-PRO
"Results Driven Real Estate"
Keller Williams Realty
With an FHA loan, there is no way to stop paying PMI. You'll have to pay the costs associated with a refinance or pay PMI until you sell.
Another way to view this is with your accountant. Depending on your age and complete financial picture, it may be wise to put less down and use the rest to invest in a different form.
You should also make sure that whatever your decision on the down payment that you can comfortably afford those payments and have a cushion to fall back on in the event you lose your job or become ill or incapacitated. As you can see, there are many variables that come in to play here, so it would not be in your best interest for us to advise you to the extent that you may need advice.