FHA Loans vs. Conventional Home Loans

The main difference between a FHA Loan and a Conventional Home Loan is that a FHA loan requires a lower down payment, and the credit qualifying criteria for a borrower is not as strict. This allows those without a credit history, or with minor credit problems to buy a home. FHA requires a reasonable explanation of any derogatory items, but will use common sense credit underwriting. Some borrowers, with extenuating circumstances surrounding bankruptcy discharged 3-years ago, can work around past credit problems. However, conventional financing relies heavily upon credit scoring, a rating given by a credit bureau such as Experian, Trans-Union or Equifax. If your score is below the minimum standard, you may not qualify.

Todays Rates

 
Loan Program Rate APR
30 Year Fixed 4.500% 4.521%
15 Year Fixed 4.000% 4.012%
3/1 Arm 4.000% 3.934%
5/1 Arm 4.125% 3.956%
7/1 Arm 4.250% 3.982%

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