Conventional vs. FHA Mortgages: What You Need to Know Before You Buy a Home
If you’re thinking about buying a home, you’ve probably come across the terms conventional loan and FHA loan. They’re two of the most common mortgage types, and understanding the difference could save you money—or make the difference between getting approved or not.
Let’s break it down.
What Is a Conventional Mortgage?
A conventional mortgage is a home loan that isn’t backed by the government. These are offered by private lenders—banks, credit unions, and mortgage companies—and they typically follow guidelines set by Fannie Mae and Freddie Mac.
Key Traits:
- Credit Score: Generally requires a score of 620 or higher.
- Down Payment: Minimum 3%, but 20% is ideal to avoid private mortgage insurance (PMI).
- Loan Limits: In 2025, the limit for most areas is around $766,550.
- Flexibility: Good for buyers with strong credit and stable income.
What Is an FHA Mortgage?
An FHA loan is backed by the Federal Housing Administration, which means the government insures the loan to protect lenders if the borrower defaults.
Key Traits:
- Credit Score: Can go as low as 500, though most lenders want at least 580.
- Down Payment: As low as 3.5% if your credit score is 580+.
- Mortgage Insurance: Required for the life of the loan (in most cases).
- More Lenient: Ideal for first-time buyers or those with credit challenges.
How Do You Choose?
Here’s the quick version:
| Feature | Conventional Loan | FHA Loan |
|---|---|---|
| Minimum Credit Score | 620 | 500 (580 for 3.5% down) |
| Down Payment | 3%–20% | 3.5% minimum |
| Mortgage Insurance | Can cancel at 20% equity | Required for most of the loan |
| Ideal For | Strong credit, higher income | First-time buyers, lower credit scores |
If you have solid credit and can put down a decent chunk, a conventional loan might cost you less in the long run. But if your credit history isn’t perfect or your savings are tight, an FHA loan can open the door to homeownership sooner than you might think.
Bottom Line: The Right Mortgage Depends on You
Don’t get caught guessing. Your financial situation should dictate your loan type—not the other way around. And the truth is, getting the right mortgage is just as much about who you know as what you qualify for.
Let’s Talk—I’ve Got the Connections to Help You Buy
Whether you’re ready to house hunt or still figuring it out, I can connect you with trusted lenders who’ll work to get you the best loan for your situation. Reach out today—let’s make homeownership happen.
Message me. Let’s get you approved.
The Local Look by Jason 
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