The Most Common Question We Get at The Taberne Group
"Should I go FHA or conventional?" We hear this question every single day. And the honest answer is always: it depends on your credit score, your savings, how long you plan to stay in the home, and your overall financial picture.
Both loan types can get you into a home. But choosing the wrong one could cost you tens of thousands of dollars over the life of your mortgage. Let's break down exactly how they compare in 2026 so you can make the right call.
The Basics: What Makes Them Different
FHA Loans
FHA loans are insured by the Federal Housing Administration — a government agency. Because the government backs these loans, lenders take on less risk, which means they can offer them to borrowers with lower credit scores and smaller down payments.
Key features in 2026:
Conventional Loans
Conventional loans are not government-insured. They follow guidelines set by Fannie Mae and Freddie Mac. Because there's no government backstop, lenders require stronger credit and financial profiles.
Key features in 2026:
The Real-World Cost Comparison
Let's compare both options on a $350,000 home purchase in the Philadelphia metro area. This is where the numbers tell the real story.
Scenario: 5% Down Payment, 700 Credit Score
FHA Loan:
Conventional Loan:
Winner on monthly payment: Conventional by $62/month
But here's where it gets interesting. Over 10 years:
Scenario: 3.5% Down, 620 Credit Score
This is where FHA shines:
FHA Loan:
Conventional Loan:
Winner: FHA — lower rate, easier qualification, and lower PMI costs at this credit level.
Credit Score: The Decision Point
Your credit score is the single biggest factor in this decision. Here's the general guideline The Taberne Group uses:
The PMI vs. MIP Problem
This is the #1 reason credit score matters in the FHA vs. conventional decision.
FHA Mortgage Insurance Premium (MIP):
Conventional Private Mortgage Insurance (PMI):
For borrowers with 700+ credit, conventional PMI costs significantly less than FHA MIP — and it goes away. That's a massive long-term advantage.
Down Payment Comparison
Contrary to popular belief, conventional loans now allow as little as 3% down through Fannie Mae's Conventional 97 and HomeReady programs. The idea that FHA is the only low-down-payment option is outdated.
Property Requirements: A Hidden Factor
FHA loans require the property to meet specific safety and habitability standards. FHA appraisers will flag:
If the property doesn't pass, the seller must make repairs before closing — or the deal falls apart.
Conventional appraisals are more lenient. While they still assess value, they don't have the same strict property condition requirements.
Bottom line: If you're buying a fixer-upper or an older home, conventional financing gives you more flexibility.
What About Refinancing Later?
Many buyers start with FHA and plan to refinance into conventional once their credit improves or they build equity. This is a valid strategy, but it comes with costs:
If you can qualify for conventional from the start, you'll avoid these future costs entirely.
The Taberne Group Recommendation
At The Taberne Group, we don't push one loan type over another. We run both scenarios for every borrower and show you the exact monthly payment, total cost over your expected ownership period, and the break-even analysis.
Here's our general framework:
Choose FHA if:
Choose Conventional if:
The Most Important Step: Get Pre-Approved and See Your Options
The best way to know which loan is right for you is to see actual numbers based on your specific financial profile. The Taberne Group, powered by Movement Mortgage, will run both FHA and conventional scenarios side by side and show you exactly what each one costs — monthly and over the life of the loan.
No guessing. No sales pressure. Just the math.
Contact The Taberne Group today. Call (215) 266-0663 or apply online to get pre-approved. We typically turn around pre-approval letters within 24-48 hours.