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>>No need for a 20% down payment on an 'owner-occupied' house. He could keep that money in the e-fund, or for whatever bad surprises he'll encounter when moving in HIS house.<<

With the 20% down, you can avoid PMI and escrow. For me, that was important. It allows me to keep my property tax funds where it makes me money until the county comes looking for it in October.
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