Compare eligibility and property use
FHA financing is designed for qualifying primary residences and is insured by the federal government. Conventional financing is not FHA-insured and can serve qualifying primary, second-home and investment transactions.
Both options require underwriting, an eligible property and sufficient verified funds. Neither should be selected from a down-payment headline alone.
Understand mortgage insurance
FHA and low-down-payment conventional scenarios can include different forms of mortgage insurance, upfront costs and cancellation rules. Compare the actual monthly and long-term effect for your scenario.
Use the same assumptions
Request both scenarios using the same price, down payment, closing date, taxes and insurance. Compare cash to close, full payment, upfront cost and projected cost over your expected time in the home.
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Frequently asked questions
Is FHA only for first-time home buyers?
No. Eligible repeat buyers may use FHA financing for a qualifying primary residence.
Can conventional mortgage insurance be removed?
Cancellation may be possible when applicable legal, investor and servicing requirements are met. FHA mortgage-insurance duration follows different rules.
Claims in this guide were checked against the linked primary sources. Program guidelines can change; personal eligibility requires a complete application and review.