--- title: "Quick Guide: FHA vs. Conventional Loan | Capital Homes" description: FHA or Conventional? The answer is dependent on many factors, but we’ll walk you through some key differences. image: https://blog.capitalhomes.com/hubfs/Imported_Blog_Media/1200-Nov-16-2021-07-09-47-87-PM.jpeg --- [![22_Capital_Homes_Logo_Horizontal_2C_RGB](https://blog.capitalhomes.com/hs-fs/hubfs/22_Capital_Homes_Logo_Horizontal_2C_RGB.png?width=257&height=29&name=22_Capital_Homes_Logo_Horizontal_2C_RGB.png "22_Capital_Homes_Logo_Horizontal_2C_RGB")](https://www.capitalhomes.com/) - [Homes](https://www.capitalhomes.com/homes) - [Communities](https://www.capitalhomes.com/communities) - [About](https://www.capitalhomes.com/our-standards) - [Design](https://www.capitalhomes.com/design-center) - [Resources](https://www.capitalhomes.com/blueplan-tutorial) - [Contact](https://www.capitalhomes.com/contact-us) - [Warranty](https://www.capitalhomes.com/warranty) #### Questions? Ask our team! 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Clean it up!](https://blog.capitalhomes.com/come-on-now-clean-it-up) #### [June 1, 2021 Fall Foodies & Kitchen Lovers](https://blog.capitalhomes.com/fall-foodies-kitchen-lovers) #### [June 1, 2021 Elysian Fields is Finally Here!](https://blog.capitalhomes.com/elysian-fields-is-finally-here) #### [June 1, 2021 Choosing Your Countertops](https://blog.capitalhomes.com/choosing-your-countertops) #### [June 1, 2021 Lock in Your Sale Price and Interest Rate](https://blog.capitalhomes.com/lock-in-your-sale-price-and-interest-rate) #### [June 1, 2021 Selection Spotlight: Ruvati Roma WORKstation Sink](https://blog.capitalhomes.com/selection-spotlight-ruvati-roma-workstation-sink) #### [June 1, 2021 New Water Park Coming to Broken Arrow](https://blog.capitalhomes.com/new-water-park-coming-to-broken-arrow) June 1, 2021 ## Quick Guide: FHA vs. Conventional Loan If you’re in the market for a mortgage, you may be wondering which loan is better: FHA or Conventional? The answer is dependent on many factors, but we’ll walk you through some key differences:  #### 1. Better standard rate with FHA  With an FHA, you may be able to get a better rate than you could with a conventional loan, depending on your credit score.  #### 2. Mortgage Insurance Premium (PMI) is typically higher with FHA than with Conventional.  Not only is this part of your monthly payment going to be higher, but FHA will charge a funding fee of 1.75% up front as well, which will be rolled into your loan.  #### 3. Your PMI will drop off on a conventional loan, but it stays on an FHA. Both loans require a mortgage insurance (PMI) but with a conventional loan, that insurance premium will eventually drop off, or, if your down payment is 20% or more, then you won’t be required to have PMI at all. With an FHA, your PMI is there for the long haul, and that can make a big difference in your monthly payment.  #### 4. You could make a smaller down payment with an FHA  FHA requires a standard 3.5% down payment, while Conventional requires 5% down, depending on your credit score.  Depending on your [credit score](https://www.capitalhomes.com/home-financing), down payment, and monthly payment needs, you may be surprised which loan option is better for you. “Definitely talk to a lender, and have them run different scenarios to see which option works best for you,” said Grant Deyoe, a Capital Homes Preferred Lender with RCB Bank.  We are always happy to help you get an idea of what you need in a home, and what you want to pay, and helping you find a trusted lender that will help get you the best loan possible. 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