5 min read
FHA and conventional are the two most common loan types, and the right choice usually comes down to your credit score, down payment, and how long you'll keep mortgage insurance. Here's a clear comparison.
Credit and down payment
FHA is more forgiving: 3.5% down with a 580 score (or 10% down from 500–579). Conventional typically wants a 620+ score but allows as little as 3% down for first-time buyers and rewards stronger credit with better pricing.
Mortgage insurance is the big difference
On FHA, mortgage insurance (MIP) usually stays for the life of the loan unless you refinance. On conventional, private mortgage insurance (PMI) automatically falls off once you reach ~20% equity — which can save real money over time.
Which to choose
Lower credit or minimal down payment often points to FHA. Stronger credit and a plan to build equity often favors conventional. Many buyers start FHA and refinance to conventional later to drop mortgage insurance — we'll model both for you.
Frequently asked questions
- Is FHA only for first-time buyers?
- No. FHA is open to repeat buyers too, as long as it's your primary residence. It's popular with first-timers because of the low down payment and flexible credit.
- Can I switch from FHA to conventional later?
- Yes — many homeowners refinance from FHA to conventional once they have ~20% equity and solid credit, specifically to eliminate mortgage insurance.
This guide is general educational information, not financial advice or a commitment to lend. Programs, rates, and requirements change. Confirm your specifics with a licensed loan officer. Equal Housing Lender · NMLS #856170.