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FHA Versus Conventional: Which loan option is right for me?

Loan Options Guide


FHA or Conventional: What’s the right loan for you?

If you’re ready to buy a home, you may find yourself weighing the option of whether to apply for a conventional or FHA (Federal Housing Administration) loan. What is the difference? Both types of loans have advantages, but qualification requirements differ.

FHA loans are popular, government-backed home mortgage loans in which the FHA’s role is to insure mortgages issued by approved lenders. This guarantees that lenders will not lose money if borrowers’ default on their mortgage. Additionally, this type of loan requires borrowers to pay for mortgage insurance.  This helps mortgage lenders offer FHA loans with lower interest rates and more lenient requirements to qualify for loans.  

FHA Loan Benefits:

  • Lower credit score requirements. 
  • Requires as little as 3.5% down payment. 
  • Easier to qualify for than a conventional loan. 
  • Allows 100% gift funds for homebuyers down payment and closing costs. 


    An FHA loan could be a good option for first-time homebuyers because it helps turn dreams of homeownership into reality. 


    Conventional loans are a good option for homebuyers with strong credit who can contribute a down payment of at least 3%. Unlike FHA loans that require mortgage insurance for the life of the loan, it is not required for a conventional loan if borrowers make a 20% or more down payment. However, if a smaller down payment is made, conventional mortgage insurance automatically ends at 78% loan-to-value.

    Conventional Loan Benefits:

    • 10, 15, 20, 25 & 30-year fixed rate loans.
    • Conventional loans can cover higher loan amounts (FHA loans are restricted to county limits).
    • On average, conventional loans are processed faster than FHA loans.
    • Loans can be used for a second home or an investment property.


      Qualifying for a conventional mortgage could be a more complex process—compared to government-backed FHA loans—but a conventional loan is the right option for many homebuyers.

Contact Platinum Home Mortgage to learn more!



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