FHA loans let you buy with 3.5% down and a credit score as low as 580. Conventional loans start at 3% down but usually need a 620+ score. The right choice depends mostly on your credit score and how long you’ll keep the loan.
| FHA | Conventional | |
|---|---|---|
| Minimum down payment | 3.5% (580+ score); 10% (500–579) | 3% (first-time buyer programs) |
| Minimum credit score | 580 for 3.5% down | 620 |
| Mortgage insurance | 1.75% upfront + about 0.55% a year | PMI only below 20% down |
| Can you drop it? | Under 10% down: no, it lasts the life of the loan. 10%+ down: after 11 years | Yes: request at 20% equity, ends automatically at 22% |
| 2026 loan limit (1 unit) | $541,287 in most areas, up to $1,249,125 | $832,750 in most areas, up to $1,249,125 |
FHA vs. conventional payment comparison
Enter your numbers to compare monthly payments and cash needed.
FHA figures include the 1.75% upfront premium added to the loan and a 0.55% annual premium. PMI varies with your credit score; 0.3–1.5% a year is common.
Estimates for education only. Rates and costs vary; confirm with a licensed lender.
Module 3 of the HomeLooker course includes a loan comparison calculator and a monthly payment calculator that add taxes and insurance, so you can see what each loan really costs you every month.
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Who FHA suits best
- Credit scores in the 580–660 range, where conventional PMI gets expensive.
- Buyers with higher debt-to-income ratios.
- Anyone planning to refinance into a conventional loan once they have more equity.
Who conventional suits best
- Credit scores around 700 and up.
- Buyers who want mortgage insurance to disappear on its own.
- Homes priced above the FHA limit in your county.
Many buyers start with FHA and refinance later. Just don't count on it: refinancing only pays off if rates or your credit improve enough to cover the closing costs.
Educational content only, not financial advice. Calculators start at the Freddie Mac weekly average (7.4% as of October 15, 2026); worked examples use mid-October 2026 rates. Confirm current figures with a licensed lender.
Sources: HUD 2026 FHA loan limits, FHFA 2026 conforming limits, Freddie Mac PMMS.
Down payments, the real monthly cost, inspections and closing day, explained simply. You’ll also get occasional emails about buying a home and the course. No spam, unsubscribe anytime.