FHA vs Conventional Loan
FHA vs Conventional Loan is one of the most common crossroads for 2026 buyers. The specifics below show exactly where each option pulls ahead.
FHA accepts a 580 score with 3.5% down and charges mortgage insurance for the life of most loans; conventional needs ~620+ but lets you cancel PMI at 20% equity.
| Factor | FHA | Conventional |
|---|---|---|
| Min credit score | 580 | 620 |
| Min down payment | 3.5% | 3% |
| Mortgage insurance | MIP, usually for loan life | PMI, cancellable at 20% equity |
| Best for | Lower credit / higher DTI | Strong credit, long-term hold |
The bottom line
FHA wins on access; conventional usually wins on lifetime cost once you have 660+ credit.
Run both options with a lender before deciding — the right choice can shift by a few thousand dollars depending on your exact credit score, down payment, and how long you plan to stay in the home.
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Frequently Asked Questions
- FHA vs Conventional Loan — which is better in 2026?
- FHA wins on access; conventional usually wins on lifetime cost once you have 660+ credit.
- Can I switch later?
- Yes. Many borrowers start with FHA and refinance into another loan once their credit and equity improve, which can also remove FHA mortgage insurance.