- Down payment. The FHA loans only require 3.5% down vs conventional loans which typically require between 10% to 20% down depending on rate. Also FHA allows for down payment gifted from a family member, a governmental agency, or a nonprofit organization.
- Mortgage Insurance Premium. FHA loans require a mortgage insurance and thus FHA borrowers are required to pay a mortgage insurance premium. Many conventional loans do not require a mortgage insurance premium if a large enough down payment is made.
- Credit Qualification Criteria. It is easier to qualify for a FHA loan than a conventional loan.
- Total Loan Amount Limits. The loan limits for a FHA loan are typically less than those of a conventional loan.
When deciding between getting an FHA approved loan or a conventional loan there are many factors that go into this decision. The primary ones in the past have been
Greg Bryan is a realtor and an attorney in San Francisco
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