FHA vs. Conventional Loans
Two different structures
FHA mortgages are insured by the Federal Housing Administration and made by participating lenders. Conventional mortgages are not FHA-insured and can follow different investor and lender requirements.
Neither label alone tells you which is less expensive. Credit profile, down payment, property type and the offers available to you determine the practical comparison.
Look beyond the down payment
FHA financing generally includes upfront and recurring mortgage insurance. Conventional financing can include private mortgage insurance when equity is below the applicable threshold. Their cancellation rules differ.
Ask each lender for insurance amounts and duration. Compare the total payment, upfront costs and how long you expect to keep the loan. A smaller down payment preserves savings but can raise borrowing costs.
Evaluate a specific property
Loan limits and appraisal requirements vary by program, location and property. Condo approval and property condition can matter. A lender may have stricter requirements than a program minimum.
Get written estimates using the same purchase price and down payment. Review current program guidance with a lender rather than assuming a minimum credit score guarantees approval.