Both programs finance the same houses; the difference is in how the risk is priced. FHA loans are government-insured, which lets lenders approve borrowers with lighter credit — scores from 580 with 3.5% down are common — in exchange for an upfront mortgage insurance premium plus an annual premium that, on most FHA loans today, lasts for the life of the loan.

Conventional loans, backed by Fannie Mae or Freddie Mac, generally want a stronger credit profile — often 620 or higher for approval, meaningfully better pricing above 700 — but reward that credit with lower ongoing costs. Private mortgage insurance (PMI) applies below 20% down, but it cancels automatically once you reach 22% equity, unlike FHA’s insurance.

The practical read: if your credit is still building or your down payment is thin, FHA often gets you into a house sooner. If your credit is solid and you can put down even 5–10%, conventional usually costs less over time. We run both side by side against your actual numbers before you choose.