Two great options. One smarter choice for your situation.

When it comes to financing a home, FHA and conventional loans are two of the most popular choices — especially for first-time buyers.

Both have flexible down payment options and wide availability, but they serve slightly different needs based on your credit score, budget, and long-term goals.

Let’s walk through the key differences between FHA and conventional loans — and how to figure out which one might be the better fit for you.

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🧾 Quick Snapshot

Feature	FHA Loan	Conventional Loan
Minimum down payment	3.5%	As low as 3%
Credit score	580+ (or 500 w/ 10% down)	620+
Mortgage insurance	Required for life of loan (MIP)	Required if <20% down (PMI), can be removed
Loan limits	Set by county	Set by county (usually higher)
Property type	Primary residence only	Primary, second home, or investment
Upfront fees	Upfront MIP (1.75%)	No upfront fee
Ideal for	Lower credit or smaller down	Stronger credit, long-term savings

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💰 Down Payment Flexibility

• FHA loans require just 3.5% down, making them great for buyers with limited savings.
• Conventional loans allow as little as 3% down for first-time buyers — with potentially lower long-term costs if your credit is solid.

💡 Even small credit score increases can help conventional loans become more affordable than FHA.

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💳 Credit Score Requirements

• FHA loans are more lenient, accepting credit scores as low as 580 (sometimes 500).
• Conventional loans generally require 620+, and rates improve significantly as your score increases.

🔍 We’ll help you review your score — and even offer tips to raise it before you apply.

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📉 Mortgage Insurance (PMI vs. MIP)

This is one of the biggest differences between the two loan types.

• FHA loans charge mortgage insurance for the life of the loan (unless you refinance out).
• Conventional loans charge PMI only when you put down less than 20% — and it automatically falls off once you hit 22% equity.

🧠 Over time, this can save you thousands — especially if you plan to stay in the home long term.

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🏠 Property Types Allowed

FHA loans are for primary residences only.

Conventional loans can be used for:

• Primary homes
• Second homes
• Investment properties

📘 If you’re planning to buy a rental or vacation property, conventional is your go-to option.

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🏁 The Bottom Line

Choose an FHA loan if:

• Your credit score is under 620
• You need the most flexible qualifying terms
• You’re buying your first home and have limited savings

Choose a conventional loan if:

• You have 620+ credit and 5%+ to put down
• You want to avoid long-term mortgage insurance
• You’re buying a second home or investing in property

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🏢 Why PRMI?

As a direct lender, we help you:

• Compare FHA vs. Conventional loans side by side
• Understand the true long-term costs
• Customize a mortgage that fits your needs today — and tomorrow

Whether you’re starting out or moving up, we’ve got the tools and experience to guide you.

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👇 Not Sure Which Loan Is Best?

Let’s look at your credit, budget, and future plans — and help you choose the loan that puts you in the best position.