FHA vs. Conventional Loans: Which Is Right for You?

FHA Loans at a Glance

FHA loans are backed by the Federal Housing Administration and designed to help buyers with lower credit scores or smaller down payments.

Down payment as low as 3.5%

Credit scores as low as 580 (or 500 with 10% down)

More flexible debt-to-income ratios

Requires mortgage insurance for the life of the loan

Conventional loans are not government-backed and typically require higher credit scores but offer more flexibility.

Down payment as low as 3% for first-time buyers

Typically requires 620+ credit score

PMI can be removed at 20% equity

No upfront mortgage insurance fee

Choose FHA if:

You have a credit score below 680, limited savings for a down payment, or recent credit issues you've recovered from.

Choose Conventional if:

You have good credit (680+), can put down 5-20%, or want to avoid permanent mortgage insurance.