Quick answer
- Who it may fit
- Buyers comparing mainstream financing with government-backed options.
- Down payment & cash to close
- Some programs permit as little as 3% down for eligible buyers; closing costs and reserves may add to cash needed.
- Insurance & fees
- PMI usually applies below 20% down. Removal depends on the applicable balance, payment history and other requirements — not simply today's equity.
- Key eligibility
- Credit, documentable income, debts, property and investor guidelines matter.
- Main tradeoff
- Lower down payment can mean a larger loan and mortgage-insurance cost; compare total payment against FHA.
Down payment is not total cash to close. Educational guidance pending licensed review.
Sources: Fannie Mae: down payments · CFPB: PMI removal
The secure application opens outside lndwell.com. This page is not an application or pre-approval.
FHA vs. conventional
Scroll sideways to read the full comparison table.
| Compare | FHA | Conventional |
|---|---|---|
| Down payment | As little as 3.5% for eligible borrowers | Some eligible programs allow 3% |
| Insurance | Generally upfront and ongoing premiums; may last the loan term | PMI usually below 20% down; removal subject to balance, payment history and other rules |
| Eligibility | FHA/lender credit, occupancy and property rules | Investor credit, income and property guidelines |
| Closing cash & payment | Closing costs plus down payment; include insurance in payment | Closing costs plus down payment; include PMI when applicable |
| Tradeoff | More flexible entry, potentially longer insurance cost | Broader structures, potentially stricter qualification |
Comparison results are illustrations: enter ongoing FHA MIP in the mortgage-insurance field. Upfront FHA MIP is not added automatically; include it and ongoing MIP in an actual quote.
Program terms vary by borrower and lender. Down payment is not total cash to close. Educational guidance pending licensed review.
Sources: CFPB: FHA loans · CFPB: mortgage insurance · Fannie Mae: down payments · CFPB: PMI removal
A conventional loan is not insured by a government agency. Instead it follows the guidelines of the investors who buy it, which is why pricing on the same file can vary meaningfully from lender to lender. That variation is exactly what a broker exists to shop.
- Buyers with reasonably established credit and documentable income
- Homeowners refinancing a primary residence, second home or rental
- Anyone who wants to compare a mainstream option against a government program
- Widely available on primary homes, second homes and investment properties
- PMI may be removable when applicable loan-balance, payment-history and other requirements are met, unlike some government programs
- Fixed and adjustable structures, and a broad set of term lengths
- Qualifying standards are generally set by the investor rather than an agency, so they can be less flexible than some government options
- Mortgage insurance usually applies while the loan-to-value is high
- Pricing is sensitive to credit, occupancy, property type and loan-to-value
These are the factors an underwriter typically reviews. They are not a checklist of requirements, and meeting them does not guarantee eligibility or approval.
- Credit history and score, reviewed against current investor guidelines
- Documentable income and employment or self-employment history
- Debt-to-income within program limits
- Funds for down payment, closing costs and any required reserves
- An acceptable property and appraisal
All loans are subject to credit, income, property and underwriting approval. Nothing on this page is a loan offer, an approval, a rate lock or a commitment to lend. Programs, rates and terms are subject to change without notice.