By Jessica Schwartz, REALTOR® & Loan Originator · October 25, 2026
FHA or conventional? It’s one of the first questions buyers ask me, and the honest answer is that it depends on your credit, your down payment, the home you pick and how long you plan to keep the loan. Here’s how the two compare, in plain English, with the 2026 loan limits for our counties.
The basic difference
An FHA loan is insured by the Federal Housing Administration, part of HUD. Because the government backs the lender against losses, FHA guidelines are more forgiving about credit history and debt. In exchange, every FHA borrower pays mortgage insurance premiums, and the home must be your primary residence.
A conventional loan isn’t government-insured. Most follow standard national guidelines for loans that can be sold on the secondary market. Pricing leans more heavily on your credit score and down payment, and conventional loans can be used for a primary home, a second home or an investment property.
Neither one is “better.” I’ve seen buyers save real money with each, depending on their numbers.
Side by side
| Feature | FHA | Conventional |
|---|---|---|
| Minimum down payment | 3.5% with a credit score of 580 or higher; 10% with scores from 500 to 579 (lenders may set higher minimums) | As little as 3% for qualified buyers in certain programs; many loans use 5% or more |
| Credit | More flexible with lower scores and past credit issues | Pricing and mortgage insurance improve noticeably with higher scores |
| Mortgage insurance | Upfront premium of 1.75% of the base loan (can be financed) plus an annual premium paid monthly | Private mortgage insurance (PMI) only if you put down less than 20% |
| Can it come off? | With less than 10% down, generally lasts the life of the loan; with 10% or more down, ends after 11 years | You can request removal at 80% of the original value; it generally ends automatically at 78% |
| Seller contributions | Up to 6% of the sales price toward closing costs | On a primary home, 3% to 9% depending on your down payment |
| Property use | Primary residence only | Primary, second home or investment |
| Condos | The project generally needs FHA approval (or a single-unit approval) | Lender reviews the condo project against conventional condo guidelines |
Mortgage insurance is the biggest long-term difference
For most of my clients, the decision comes down to mortgage insurance. On an FHA loan, you pay an upfront premium at closing (most people roll it into the loan) plus an annual premium that’s split into your monthly payment. If you put down less than 10%, that annual premium generally stays for as long as you have the loan. The usual way out is to refinance or sell.
Conventional PMI works differently. Under the federal Homeowners Protection Act, you can ask your servicer to cancel PMI once your balance reaches 80% of the home’s original value, as long as you’re current and meet the servicer’s requirements, and it generally ends automatically at 78%. That makes conventional attractive if you expect to stay in the home for years.
The flip side: PMI pricing is tied closely to credit score. With a lower score, conventional PMI can cost more than FHA’s premium, at least in the early years. That’s why I always price both.
2026 loan limits on the Treasure Coast and Palm Beaches
Both loan types have a maximum loan amount, set by county. Here are the 2026 limits for a single-family home or condo (one unit):
| County | FHA limit | Conforming (conventional) limit |
|---|---|---|
| St. Lucie (Port St. Lucie, Fort Pierce) | $603,750 | $832,750 |
| Martin (Stuart, Palm City, Jensen Beach, Hobe Sound) | $603,750 | $832,750 |
| Palm Beach (Jupiter, Palm Beach Gardens) | $667,000 | $832,750 |
The limit applies to the loan amount, not the price, so your down payment counts. A loan above the conforming limit is a jumbo loan, which has its own rules. Limits are updated each year, so I’ll confirm the current numbers when we talk.
Condos, HOAs and the home’s condition
The property matters as much as the borrower. A few things I watch for locally:
- Condo approval. Not every condo building is on the FHA approved list. Sometimes a single-unit approval is possible, but it adds time. If a condo is on your list, check this early. My condo buying guide covers what else to review.
- Appraisal standards. FHA appraisers look at basic health and safety items, like peeling paint on older homes, a roof near the end of its life or missing handrails. Repairs may need to be done before closing.
- Competing offers. Some sellers see conventional financing as simpler. A strong pre-approval and a clean offer help either way. Here’s how to get pre-approved in Florida.
- HOA and CDD costs. Both programs count these in your debt-to-income ratio, so I include them when comparing.
When FHA often makes sense
- Your credit score is still building, or you’ve had a credit issue in the past few years.
- Your debt-to-income ratio is on the higher side.
- You have a smaller down payment and the price fits under the FHA limit.
- The seller is willing to help with closing costs, and the extra room for seller contributions helps.
When conventional often makes sense
- Your credit is strong, which can bring the cost of PMI down.
- You can put down 10% to 20% or more, or you plan to stay long enough to have PMI removed.
- You’re buying a second home or an investment property.
- The price or condo project falls outside what FHA allows.
If you’re a first-time buyer, my first-time home buyer guide walks through down payment help and other basics. Veterans and service members should also look at VA loans, which are a separate option with their own benefits.
How I compare them for you
- Price both loans with the same numbers. Same price, same down payment, same credit, so the comparison is fair.
- Compare full Loan Estimates. Look at the monthly payment, the mortgage insurance and the cash to close. My guide to Florida closing costs for buyers explains each section.
- Think about time. Compare the total cost over the number of years you expect to keep the loan, not just the first payment.
- Leave room for later. Some FHA borrowers refinance into conventional once they build equity, but that depends on future rates, values and credit, so I don’t plan a purchase around it.
You can see the loan programs I work with on my home loans page.
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General information, not legal, tax, insurance or financial advice. Not a commitment to lend; all loans subject to credit approval and underwriting. Jessica Schwartz, REALTOR® & Broker Associate, RE/MAX Gold. Each RE/MAX office is independently owned and operated. Loan Originator NMLS #2704014, RMI Brokers, Inc. dba One Brokerage, NMLS #2142653. Equal Housing Opportunity.