FHA vs. Conventional Loans: Which Is Better in 2026?
Compare FHA and conventional loans side by side in Virginia, Maryland & DC.
Frequently Asked Questions
Is FHA or conventional better?
It depends on your credit score and goals. FHA is better for borrowers with credit scores below 680 or higher debt-to-income ratios. Conventional is better for borrowers with scores 680+ who want to cancel mortgage insurance eventually.
Which has a lower down payment, FHA or conventional?
Both can be as low as 3–3.5% down. FHA requires 3.5% with a 580+ credit score. Conventional can go as low as 3% with a 620+ credit score through programs like HomeReady and Home Possible.
Why is FHA mortgage insurance more expensive?
FHA requires both an upfront premium (1.75% of the loan amount) and an annual premium that lasts for the life of the loan. Conventional PMI can be canceled once you reach 20% equity, making it cheaper long-term.
Related Programs
- FHA Loans — 3.5% down payment, credit scores from 580, ideal for first-time home buyers
- VA Loans — Zero down payment for veterans, active-duty military, and surviving spouses
- Conventional Loans — Fannie Mae and Freddie Mac, financing up to 97%, credit from 620
- Jumbo Loans — For properties exceeding 2026 conforming loan limits ($832,750 most counties)
- Non-QM Loans — Bank statement loans for self-employed, 1099 income, DSCR, and ITIN loans