FHA vs Conventional: Which Is Right for You?

FHA vs Conventional Loans

Choosing between FHA and conventional loans depends on your financial situation. Here's a detailed comparison.

FHA Loans

Pros:

• Lower credit requirements (580+)

• Down payment as low as 3.5%

• More flexible DTI requirements

Cons:

• Mortgage insurance for life of loan

• Property must meet FHA standards

• Lower loan limits

Conventional Loans

Pros:

• No PMI with 20% down

• Higher loan limits

• More property types allowed

Cons:

• Higher credit requirements (620+)

• Stricter DTI requirements

• May need larger down payment

  
  

The Bottom Line

FHA is often better for first-time buyers with lower credit. Conventional works well for those with stronger credit and more savings.