FHA vs. Conventional Loans: Pros, Cons and Differences

FHA loans allow lower credit scores and are easier to qualify for. Conventional loans allow lower down payments.
Kate Wood
Hal M. Bundrick, CFP®
By Hal M. Bundrick, CFP® and  Kate Wood 
Updated
Edited by Alice Holbrook Reviewed by Michelle Blackford

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Some buyers may believe that FHA loans are for first-time home buyers and conventional mortgages are for more established buyers. However, both types of loans have their advantages for any buyer, though qualification requirements differ.

FHA loans are insured by the Federal Housing Administration, and conventional mortgages aren't insured by a federal agency; instead, a lender assumes the risks associated with issuing the loan. 

Here are the factors to weigh when considering an FHA loan versus a conventional loan.

Mortgage loans from our partners

Rocket Mortgage - PURCHASE logo
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on Rocket Mortgage

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5.0

NerdWallet rating 
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5.0

NerdWallet rating 
Min. credit score 
580

Min. down payment 
3.5%

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on Rocket Mortgage

Better - PURCHASE logo
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4.5

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4.5

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Min. credit score 
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on NBKC

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4.5

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NBKC - PURCHASE logo

4.5

NerdWallet rating 
Min. credit score 
620

Min. down payment 
3%

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on NBKC

Prosperity Home Mortgage - PURCHASE logo
Check Rate

on Prosperity Home Mortgage

Prosperity Home Mortgage

4.0

NerdWallet rating 
Prosperity Home Mortgage - PURCHASE logo

4.0

NerdWallet rating 
Min. credit score 
580

Min. down payment 

0%

Check Rate

on Prosperity Home Mortgage

Tomo - PURCHASE logo
Check Rate

on Tomo

Tomo

4.0

NerdWallet rating 
Tomo - PURCHASE logo

4.0

NerdWallet rating 
Min. credit score 
580

Min. down payment 

3%

Check Rate

on Tomo

Mortgage loans from our partners

Rocket Mortgage - PURCHASE logo
Check Rate

on Rocket Mortgage

Rocket Mortgage

5.0

NerdWallet rating 
Rocket Mortgage - PURCHASE logo

5.0

NerdWallet rating 
Min. credit score 
580

Min. down payment 
3.5%

Check Rate

on Rocket Mortgage

Better - PURCHASE logo
Check Rate

on Better

Better

4.5

NerdWallet rating 
Better - PURCHASE logo

4.5

NerdWallet rating 
Min. credit score 
620

Min. down payment 
3%

Check Rate

on Better

NBKC - PURCHASE logo
Check Rate

on NBKC

NBKC

4.5

NerdWallet rating 
NBKC - PURCHASE logo

4.5

NerdWallet rating 
Min. credit score 
620

Min. down payment 
3%

Check Rate

on NBKC