Two great options — but one may be a better fit for your unique financial path.

If you’re shopping for a mortgage — or thinking about refinancing — you’ve probably run into two of the most popular loan types:

👉 FHA and Conventional loans.

While both can get you into a home (or help you restructure your mortgage), they’re built for different types of borrowers — and understanding the pros and cons of each can save you time, money, and stress.

Let’s compare FHA vs. Conventional loans — and help you decide what’s right for you.

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🧾 Key Differences at a Glance

Feature	FHA Loan	Conventional Loan
Minimum Down Payment	3.5% (580+ credit)	3–5% (typically 620+ credit)
Credit Score Minimum	500 (w/ 10% down), 580+ (w/ 3.5%)	620+
Mortgage Insurance	Required (upfront + monthly)	Required under 20% down, can cancel
Loan Limits	Lower in most areas	Higher in some cases
Property Types	1–4 units, must be owner-occupied	1–4 units, primary, second, or investment
Refinance Options	Cash-out, streamline, low-credit	Rate/term, cash-out, limited credit flexibility

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✅ FHA Loan: Best For…

• Buyers with credit scores under 680
• Those with limited savings for a down payment
• People recovering from bankruptcy or foreclosure
• First-time homebuyers
• Homeowners looking to cash out to pay off debt
• Buyers using gift funds or down payment assistance

FHA loans are built to open doors for people who might not qualify through traditional channels — especially in today’s high-rate, high-price environment.

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✅ Conventional Loan: Best For…

• Borrowers with strong credit (680–740+)
• People with 20% down payment to avoid mortgage insurance
• Buyers looking at higher-priced homes above FHA limits
• Second home and investment property buyers
• Homeowners who want to remove PMI later

Conventional loans can be cheaper long term — especially if you qualify for a competitive interest rate and put more money down.

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🔄 FHA or Conventional for Refinancing?

If you’re refinancing, here’s how it breaks down:

FHA Cash-Out Refinance

• More flexible credit
• Great for debt consolidation
• Can access equity with lower score or higher DTI
• Ideal if your current loan is FHA or you can’t qualify conventionally

Conventional Refinance

• Can remove PMI if you have 20%+ equity
• May offer better rates with good credit
• More favorable for high-credit borrowers with large loan balances

📘 PRMI offers both FHA and Conventional refi options, including streamline and cash-out loans.

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🧠 Which One Is Right for You?

Scenario	Best Option
Credit score under 640	FHA
Want to buy with gift funds	FHA
Buying a 2–4 unit property to live in	FHA
Buying a second home	Conventional
Want to avoid mortgage insurance	Conventional (with 20% down)
Looking to consolidate debt with equity	FHA (cash-out) or Conventional (if credit is strong)

💬 Not sure? We’ll run both scenarios for you — no pressure, just clarity.

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🏢 Why PRMI?

At PRMI, we:

• Offer both FHA and Conventional mortgages
• Compare options based on your real numbers and goals
• Support first-time buyers, repeat buyers, and homeowners refinancing
• Keep everything in-house, with fast underwriting and personalized support

We’re not here to push one program — we’re here to find your best fit.

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👇 Not Sure Whether FHA or Conventional Is Right for You?

Let’s compare both side-by-side based on your credit, income, and budget — and guide you to the smartest decision.