Mortgage Basics
FHA vs. Conventional: Which May Fit You?
A structured comparison of FHA and Conventional loans across down payment, mortgage insurance, credit flexibility, and loan limits.
By Vabasso EditorialReviewed by Vabasso Mortgage Advisor PanelUpdated Jul 30, 20267 min read
Written by the Vabasso Editorial · Reviewed against agency and federal sources · Read our editorial policy for how we research and review mortgage content
Direct answer
FHA loans generally offer more flexibility on credit and down payment but include upfront and monthly mortgage insurance for the life of the loan in most cases. Conventional loans often price better for stronger credit and allow mortgage insurance to fall off once equity thresholds are met.
Key takeaways
- FHA is often more accessible for credit-thin or lower-down-payment profiles.
- Conventional generally favors stronger credit and larger down payments.
- Mortgage insurance treatment differs meaningfully between the two.
How they compare on the essentials
Each program is a fit for a different borrower profile.
- Down payment minimums
- Credit flexibility
- Mortgage insurance rules
- Property and occupancy eligibility
- Loan limits
Important limitations
- Mortgage guidelines, eligibility, loan limits, rates, fees, and program availability may change and can vary by lender, investor, property, occupancy, state, and borrower profile.
- This article is educational and does not constitute a commitment to lend, a rate quote, or personalized financial advice.
Frequently asked questions
- Can I switch later?
- Many borrowers who start with FHA later refinance into Conventional once equity, credit, or program eligibility improves.
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