Question 1

Can I switch from FHA to conventional later?

Accepted Answer

Yes. Once you have enough equity, refinancing into conventional removes FHA mortgage insurance. Your credit and income must qualify at that time.

Question 2

Which loan has a lower down payment?

Accepted Answer

Both go as low as 3-3.5%. FHA allows 3.5% at 580 credit. Conventional 3% programs typically require stronger scores.

Question 3

Does FHA or conventional have stricter appraisal rules?

Accepted Answer

FHA appraisals are stricter. The property must meet HUD's minimum standards. Conventional appraisals focus more on value than condition.

Question 4

Which loan is faster to close?

Accepted Answer

Conventional loans often close faster. FHA adds appraisal requirements that can slow things down if a property needs work.

Question 5

What credit score gets me the best conventional rate?

Accepted Answer

Lenders price conventional loans better at 740 and above. Rates step up in tiers below that. Rates vary by borrower profile and market conditions.

Question 6

Can I use gift funds for a down payment on either loan?

Accepted Answer

Both allow gift funds. FHA is more flexible on sourcing rules. Conventional programs vary by lender on how much can be gifted.

Conventional vs FHA Loans in Imperial, CA