Loan Programs · Head to Head
FHA vs. Conventional: which one is actually yours?
Both get you into a home. The right one depends on your credit, your savings, and how long you plan to stay.
This is the single most common fork in the road for first-time buyers, and there's no universal right answer, only the one that fits your actual numbers.
An FHA loan is backed by the Federal Housing Administration, which lets lenders be more flexible on credit and down payment. A conventional loan isn't backed by a government agency at all, it's the most common mortgage type, and for buyers with solid credit and some savings, it's usually the lowest overall cost.
| Compare | FHA | Conventional |
|---|---|---|
| Minimum down payment | 3.5% | As low as 3% |
| Monthly mortgage insurance | MIP, both upfront and monthly, for most of the loan's life | PMI below 20% down, cancels automatically once you build enough equity |
| Credit flexibility | Most flexible of the major programs | Solid credit gets the best terms |
| Best for | First-time buyers, lower scores, thinner savings | Buyers with good credit who want the lowest long-run cost |
| Common exit strategy | Refinance into conventional once there's more equity | Not usually needed, already the lower-cost program |
General program guidelines only. Your actual terms depend on the lender, your credit, and the property. Not a commitment to lend.
So which one is it?
If your credit or down payment is the thing holding you back right now, FHA is built for exactly that. If you've got solid credit and can put down real savings, conventional is almost always the cheaper path over the life of the loan, mainly because its mortgage insurance goes away and FHA's usually doesn't.
Read the full breakdown of each: FHA Loans and Conventional.
Common questions
Can I switch from FHA to conventional later?
Yes, refinancing from FHA into conventional once you've built equity is a common move, mainly to drop mortgage insurance for good. We'll tell you honestly when that math starts to make sense for you.
Does conventional always require 20% down?
No, that's a common myth. Conventional programs can go as low as 3% down, you'll just carry PMI until you cross 20% equity.
Which one closes faster?
Neither program has an inherent speed advantage, timeline depends more on the lender, the appraisal, and how quickly your documents come back than on FHA vs. conventional.
Weighing a different fork in the road? 15-Year vs. 30-Year Fixed
Ready when you are
Not sure which one fits? Let's actually run your numbers.
A real, licensed loan officer checks both against your credit, savings, and goals. No obligation, no credit pull to start.
NMLS #2354674 · Equal Housing Opportunity · Not a commitment to lend