Side-by-Side Comparison
FHA vs Conventional for Home Buyers
FHA and conventional loans both serve primary residence buyers, but they have different costs, credit requirements, and mortgage insurance structures. The right choice depends on your credit score and down payment.
Feature Comparison
| Feature | FHA Loan | Conventional Loan |
|---|---|---|
| Min Credit Score | 580 (3.5% down) / 500 (10% down) | 620+ |
| Min Down Payment | 3.5% | 3% (first-time) / 5% (repeat) |
| Mortgage Insurance | Upfront MIP 1.75% + Annual MIP for life | PMI if < 20% down; cancellable |
| Max DTI | Up to 57% with compensating factors | Typically ≤ 45% |
| Loan Limit | $498,257 (2024 standard) | $766,550 (standard conforming) |
| Property Type | Primary residence only | Primary, second home, investment |
| Gift Funds | 100% of down payment allowed | Allowed with documentation |
| Rate Comparison | Often competitive due to gov guarantee | May be lower with good credit |
| Seller Concessions | Up to 6% | Up to 3% (< 10% down) |
| Appraisal Standards | Stricter (FHA condition requirements) | Standard appraisal |
Min Credit Score
FHA Loan
580 (3.5% down) / 500 (10% down)
Conventional Loan
620+
Min Down Payment
FHA Loan
3.5%
Conventional Loan
3% (first-time) / 5% (repeat)
Mortgage Insurance
FHA Loan
Upfront MIP 1.75% + Annual MIP for life
Conventional Loan
PMI if < 20% down; cancellable
Max DTI
FHA Loan
Up to 57% with compensating factors
Conventional Loan
Typically ≤ 45%
Loan Limit
FHA Loan
$498,257 (2024 standard)
Conventional Loan
$766,550 (standard conforming)
Property Type
FHA Loan
Primary residence only
Conventional Loan
Primary, second home, investment
Gift Funds
FHA Loan
100% of down payment allowed
Conventional Loan
Allowed with documentation
Rate Comparison
FHA Loan
Often competitive due to gov guarantee
Conventional Loan
May be lower with good credit
Seller Concessions
FHA Loan
Up to 6%
Conventional Loan
Up to 3% (< 10% down)
Appraisal Standards
FHA Loan
Stricter (FHA condition requirements)
Conventional Loan
Standard appraisal
Which Is Right for You?
Choose FHA Loan If...
First-time buyers with credit scores below 680, limited down payment, or higher debt-to-income ratios.
Choose Conventional Loan If...
Buyers with 620+ credit who want to eliminate mortgage insurance over time or buy a non-primary property.
Get Clarity
Not Sure Which One Fits Your Situation?
Answer 5 quick questions and get a personalized recommendation in 90 seconds.
Take the Strategy Quiz