FHA loans allow credit scores as low as 580 with a 3.5% down payment, but carry mortgage insurance that can last the life of the loan. Conventional loans typically require 620+ credit with down payments as low as 3%, and private mortgage insurance can be removed once you reach roughly 80% loan-to-value — a meaningful long-term cost difference.
FHA allows scores as low as 580 with 3.5% down. Conventional typically wants 620+, with the best pricing at 740+.
FHA requires 3.5% minimum. Conventional can go as low as 3% for qualified first-time buyers, though PMI cost rises with lower down payments.
FHA MIP often lasts the life of the loan unless 10%+ down. Conventional PMI cancels automatically around 78% loan-to-value.
FHA has stricter property condition requirements. Conventional loans generally have more flexibility on property condition.
Conventional PMI pricing rises sharply as credit scores drop, sometimes making FHA the cheaper option below 680.
With good credit, conventional PMI is cheaper and cancels automatically, while FHA MIP often doesn't.
A common path: buy with FHA's easier qualification, then refinance to conventional once equity and credit improve.
VA financing may beat both FHA and conventional if you're eligible.
Compare FHA vs. VA →Private consultation with Kelly or Ray Nadeau. We'll compare FHA and conventional side by side using your real credit and down payment — no obligation.
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