FHA va. Conventional Loans: What's Right for You?

Choosing between an FHA and a conventional loan can feel confusing. Here’s what you need to know to make a clear, confident decision.

FHA Loans

Backed by the Federal Housing Administration. Ideal for first-time buyers or those with lower credit scores.

Key Benefits:

• Down payment as low as 3.5%

• Easier credit qualification (min. 580 score)

• More flexible on debt-to-income ratio

Drawbacks:

• Mortgage insurance required for the life of the loan

• Property must meet stricter condition standards

Best For:

• First-time buyers

• Lower credit or limited savings

• Buyers with higher debt

Conventional Loans

Offered by private lenders. Not backed by the government.

Key Benefits:

• As little as 3% down for qualified buyers

• No mortgage insurance if you put down 20% or more

• Can remove PMI once equity hits 20%

Drawbacks:

• Higher credit score requirements (usually 620+)

• Stricter income and asset verification

Best For:

• Buyers with strong credit

• Solid income and savings

• Long-term financial planners

What to Consider:

Ask yourself:

• How much can you put down?

• What’s your current credit score?

• How long do you plan to stay in the home?

Bottom Line:

FHA is more forgiving upfront. Conventional is cheaper long-term. Talk to a lender you trust to compare options side by side.

You don’t have to figure this out alone. Reach out for a referral to a local lender who can walk you through your best next step.