Conventional or FHA - which is better for me?

Conventional with 5%+ down at 700+ FICO is usually better long-term. FHA wins for sub-680 FICO or under-5% down or recent credit events.

The choice comes down to FICO, down payment, and how long you will stay in the home. Choose Conventional if: FICO is 700+ AND down payment is 5%+. Conventional has slightly higher rate at low FICO but PMI drops off at 20% equity, while FHA MIP is for life of loan if down was below 10%. Over 7-10 years, conventional is meaningfully cheaper because PMI removal saves $100-300/month. Choose FHA if: FICO is 580-700 OR down payment is 3.5%-5% OR you have a recent credit event (bankruptcy, foreclosure, late mortgage). FHA accepts lower FICO and offers more flexibility on credit events. The downside is MIP for life. Strategy hybrid: many buyers start with FHA (to get into the home with less down) and refinance into conventional once they have 20% equity and a stronger FICO. The refinance drops MIP entirely. For tight 5-7% down scenarios, run both quotes - sometimes conventional wins on total cost, sometimes FHA wins on monthly payment, depending on FICO band and PMI cost.