Loan programs
FHA vs. conventional: how to choose with a small down payment
Both loans can work with a small down payment. The better choice depends on your credit, how long you plan to stay, and how each handles mortgage insurance.
Marcus Bell
NMLS #XXXXXX
If you have less than 10% to put down, you’ll probably compare FHA and conventional loans. Both are solid options, and the right one depends on your situation.
Where FHA tends to fit
Credit scores that are still being rebuilt
Higher debt-to-income ratios
Buyers who want flexibility after a past credit event
Where conventional tends to fit
Credit scores in the 700s or higher
Buyers who want to remove mortgage insurance later
Second homes or investment properties
Mortgage insurance is the big difference
FHA mortgage insurance often stays for the life of the loan with a small down payment. Conventional PMI can usually be removed once you reach enough equity. Over several years, that difference can matter more than the rate.
Ask your loan officer for a side-by-side estimate. Seeing both payments on one page makes the choice much easier.
General information
This guide is general education, not financial, legal or tax advice. Talk with a licensed loan officer about your situation.