Last updated: October 2026 · Editorial standards Conventional and FHA loans are the two most common mortgage types for home purchases. They’re not interchangeable — each has distinct strengths. The right one depends entirely on your credit score, down payment, and financial situation. The Basic Difference Conventional loans are not insured or guaranteed by any…
Most buyers know FHA as the go-to for low down payment mortgages. But two conventional programs offer 3% down with better long-term economics for buyers who qualify: Fannie Mae’s HomeReady and Freddie Mac’s Home Possible. Both allow 3% down, both cancel PMI when you reach 20% equity, and both carry lower mortgage insurance costs than…
Conventional loans are the most widely used mortgage type in the US — and unlike FHA or VA loans, they’re not backed by a government agency. That means lenders set their own standards within guidelines established by Fannie Mae and Freddie Mac, the two government-sponsored enterprises that buy most conventional mortgages. Here’s exactly what you…