[itsbenweeks]

Sort of. You'd be left paying the difference of 3.5% to 20% (16.5% or $49,500) in a FHA Mortgage Insurance Premium (MIP). This means another loan that you need a 1.75% down payment for (making your downpayment ≈ 3.8% or $11,400) that adds another payment (≈ $400) in addition to the mortgage. MIPs last the entire life of the FHA loan, too.

[g2ah5z]

Yes, it's effectively a higher interest rate on the entire loan, but my point was that you don't need a massive amount of cash up front to close the deal.

[itsbenweeks]

And it's still a valid point. It's good to mention that a <20% down payment has caveats, too.