Loan Types
8 min read
FHA vs. Conventional Loans
Mike Starr
Founder, MortgageWizardTools · M.S. Organizational Management
Last reviewed: August 2026
Choosing between FHA and conventional loans depends on your credit score, down payment, and financial situation.
FHA Loans
Minimum Credit Score: 580 (3.5% down) or 500 (10% down) Down Payment: As low as 3.5% Mortgage Insurance: Required for life of loan (if < 10% down) DTI Limits: Up to 57% in some cases
Conventional Loans
Minimum Credit Score: Typically 620+ Down Payment: As low as 3% PMI: Required if < 20% down, removable at 80% LTV DTI Limits: Usually 45% maximum
Key Differences
| Feature | FHA | Conventional |
|---|---|---|
| Credit Score | 580+ | 620+ |
| Down Payment | 3.5% | 3% |
| Insurance | MIP (permanent) | PMI (removable) |
| Loan Limits | County-specific | Higher limits |
| Property Standards | Strict | More flexible |
When to Choose FHA
- •Credit score below 680
- •Limited savings for down payment
- •Higher debt-to-income ratio
- •First-time homebuyer
When to Choose Conventional
- •Credit score above 700
- •Can put 20% down
- •Want to avoid permanent mortgage insurance
- •Buying a higher-priced home