Both FHA and conventional loans can get you into a home in Fort Worth with a low down payment — but they work very differently once you dig into credit requirements and mortgage insurance. Here’s a straight, side-by-side comparison so you know which direction fits your situation.
Quick Answer: FHA vs. Conventional at a Glance
• FHA loans: Lower minimum credit score, low down payment, but mortgage insurance premium (MIP) usually stays for the life of the loan unless you refinance
• Conventional loans: Slightly higher credit score requirements, but private mortgage insurance (PMI) automatically cancels once you reach 20-22% equity
• Both: Can be paired with down payment assistance programs like the City of Fort Worth’s HAP or TSAHC’s statewide programs
What’s the Real Difference Between FHA and Conventional?
FHA loans are insured by the Federal Housing Administration, which is why lenders can approve buyers with lower credit scores and smaller down payments — the government is backstopping some of the risk. Conventional loans aren’t government-insured, so lenders lean more on your credit profile, but they reward strong credit with more flexibility long-term, especially around mortgage insurance.
Down Payment: FHA vs. Conventional
• FHA: As low as 3.5% down with a 580+ credit score
• Conventional: As low as 3% down through Conventional 97 programs for qualified first-time buyers
Down payment assistance can reduce or eliminate the cash needed out of pocket for either loan type.
Credit Score Requirements
• FHA: 580+ for the 3.5% down payment option; scores as low as 500 may qualify with 10% down
• Conventional: Typically 620+ , with the best pricing reserved for higher scores
Mortgage Insurance: MIP vs. PMI (The Real Long-Term Cost Difference)
This is where the two loan types diverge the most. FHA’s mortgage insurance premium (MIP) is required upfront and monthly, and on most FHA loans today, it doesn’t automatically go away — you’d need to refinance into a conventional loan to remove it. Conventional loans use private mortgage insurance (PMI) instead, which cancels automatically once your loan balance hits roughly 78-80% of your home’s original value, and you can often request early removal once you hit 20% equity.
For buyers who expect their credit or savings to improve over the next few years, that difference can matter a lot over the life of the loan.
Which Loan Is Right for You?
• Choose FHA if: Your credit score is below 620, you have limited savings for a down payment, or you’re not concerned about long-term mortgage insurance costs
• Choose conventional if: Your credit score is 620+, you can put at least 3-5% down, and you want mortgage insurance that eventually goes away on its own
This isn’t a decision to make from a blog post alone — the right answer depends on your actual credit report, income, and goals, which is exactly what a pre-approval conversation is for.
Frequently Asked Questions
Can I switch from FHA to conventional later?
Yes — many buyers start with FHA to get into a home sooner, then refinance into a conventional loan once their credit or equity improves, which can eliminate ongoing mortgage insurance.
Is FHA only for first-time buyers?
No. FHA loans are available to repeat buyers too, as long as it will be your primary residence.
Which loan has lower closing costs?
Closing costs vary by lender and loan amount more than by loan type. FHA does have an upfront mortgage insurance premium that’s typically financed into the loan, which is worth factoring in when comparing your options.
Ready to Talk Through Your Options?
Every buyer’s situation is different — the best way to know exactly what fits you is a quick, no-obligation conversation.
Cristina Calk
Team Calk | Fairway Independent Mortgage Corporation
Phone: 817-929-6239
Website: TeamCalk.com
Cristina Calk has over 23 years of experience helping DFW-area buyers navigate the home financing process.
NMLS# 497446 (Cristina Calk) | Fairway Independent Mortgage Corporation, NMLS# 2289. Equal Housing Lender. Programs and eligibility requirements are subject to change without notice and are current as of the publish date of this article; contact us for current terms. This is not an offer to extend credit or a commitment to lend, and no interest rate or Annual Percentage Rate (APR) is quoted in this article unless explicitly labeled as such and sourced. Contact us for a personalized rate quote and Loan Estimate, which will disclose your actual interest rate, APR, estimated payment, and closing costs in compliance with the Truth in Lending Act (Regulation Z). This article is for informational purposes only and is not tax or legal advice.