Conventional vs FHA loan

Conventional loans are not backed by the federal government and typically follow guidelines set by Fannie Mae and Freddie Mac. They often require a higher credit score and, with less than 20% down, private mortgage insurance (PMI).

FHA loans are insured by the Federal Housing Administration and may allow lower credit scores and down payments. They come with upfront and annual mortgage insurance (MIP) that can affect your payment and closing costs.

Your eligibility and the property will influence which loan types you can use. When comparing lenders, compare Conventional to Conventional and FHA to FHA so that differences in rate and fees are meaningful.

Use a comparison tool to enter each lender’s quote for the same loan type. That way you can see how rate, payment, and closing costs differ across lenders for the product you’re considering.