Comparison
FHA vs conventional in Texas
FHA usually wins on getting approved. Conventional usually wins on long-run cost once you have equity and strong credit. Here's how to tell which one you're in.
| Feature | FHA | Conventional |
|---|---|---|
| Minimum down payment | 3.5% (580+ score); 10% below 580 | 3% on some first-time programs, otherwise 5% |
| Minimum credit score | 500–580 depending on down payment | Typically 620, with pricing best at 740+ |
| Mortgage insurance | 1.75% upfront + monthly MIP, often for the loan's life | Monthly PMI only, removable near 20% equity |
| Debt-to-income flexibility | Often to 50%+ with compensating factors | Usually capped near 45–50% |
| Gift funds | Allowed for the entire down payment | Allowed, with more restrictions |
| Seller-paid closing costs | Up to 6% of the price | 2–3% at low down payments |
| Property condition standards | FHA minimum property requirements apply | Appraiser notes condition; fewer mandated repairs |
| Occupancy | Primary residence only | Primary, second home, or investment |
Lean FHA when…
Your score is under 680, your down payment is under 5%, your debt-to-income is tight, you're using gift or assistance funds, or you had a credit event in the last few years.
Lean conventional when…
Your score is 720+, you can put 5–20% down, and you want mortgage insurance that eventually drops off. Many Texas buyers start with FHA and refinance to conventional once they hit 20% equity.
Rate and payment examples are estimates for illustration only. Rates are subject to change and this is not a commitment to lend. Actual APR depends on credit, occupancy, loan amount, and property details. This site is not affiliated with or endorsed by HUD, the FHA, or any government agency.