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.

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5.0

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Next Door Lending LLC - PURCHASE logo

5.0

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580

Min. down payment 
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5.0

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5.0

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580

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3.5%

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5.0

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5.0

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New American Funding

4.5

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4.5

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500

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3.5%

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Veterans United

4.5

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4.5

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620

Min. down payment 
0%

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Mortgage loans from our partners

Next Door Lending LLC - PURCHASE logo
Check Rate

on Next Door Lending LLC

Next Door Lending LLC

5.0

NerdWallet rating 
Next Door Lending LLC - PURCHASE logo

5.0

NerdWallet rating 
Min. credit score 
580

Min. down payment 
0%

Check Rate

on Next Door Lending LLC

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

NBKC - PURCHASE logo
Check Rate

on NBKC

NBKC

5.0

NerdWallet rating 
NBKC - PURCHASE logo

5.0

NerdWallet rating 
Min. credit score 
620

Min. down payment 
0%

Check Rate

on NBKC