What is the difference between a conventional mortgage and an FHA loan
Here are some key differences between FHA and conventional loans
FHA loans are backed by the Federal Housing Administration and offered by FHA-approved lenders. Conventional loans are not insured or guaranteed by the government.
FHA loans allow smaller down payments (as low as 3.5%) and lower credit scores than most conventional loans.
FHA loans require mortgage insurance. Conventional loans require private mortgage insurance (PMI) if you put down less than 20%.
FHA loans have loan limits of $420,680 in low-cost areas and $970,800 in higher-priced markets. Conventional loans are subject to limits set by the Federal Housing Finance Agency (FHFA). For 2022, that’s $647,200 for most of the United States.