FHA vs. Conventional Loan in Florida: Which One Is Right for You?

This is one of the most common questions I get from Florida homebuyers: should I go FHA or conventional? The answer depends on your credit score, down payment, and long-term plans. Let me break it down clearly.

Quick Comparison

Here are the key differences at a glance:

Minimum credit score: FHA requires 580 (or 500 with 10% down). Conventional requires 620.
Down payment: FHA requires 3.5%. Conventional starts at 3%.
Mortgage insurance: FHA charges it for the life of the loan. Conventional lets you drop it at 20% equity.
Loan limits (2026): FHA limit in most Florida counties is $524,225. Conventional limit is $806,500.
Debt-to-income ratio: FHA allows up to 57% in some cases. Conventional typically caps at 50%.

When FHA Is the Better Choice

Choose FHA if:

Your credit score is between 580 and 619
You have had a recent credit event (bankruptcy, foreclosure, short sale)
Your debt-to-income ratio is on the higher side
You need a more flexible qualification process

FHA loans are designed to help borrowers who might not qualify for conventional financing. The tradeoff is permanent mortgage insurance, which adds to your monthly payment.

When Conventional Is the Better Choice

Choose conventional if:

Your credit score is 620 or higher (680+ for the best rates)
You can put 5% or more down
You plan to stay in the home long enough to build 20% equity and drop PMI
You are buying a condo (some condo complexes are not FHA-approved)
You need a higher loan amount (above FHA limits)

The Mortgage Insurance Factor

This is where the real cost difference lives. FHA mortgage insurance (MIP) has two parts: an upfront premium of 1.75% of the loan amount (rolled into the loan) and an annual premium of 0.55% paid monthly. On a $300,000 loan, that is about $137 per month for the life of the loan.

Conventional PMI ranges from $75 to $200 per month on the same loan, but it goes away once you reach 20% equity. Over a 30-year period, dropping PMI can save you tens of thousands of dollars.

A Real Example

Let me run the numbers on a $300,000 home purchase in Florida:

FHA (3.5% down, 580 credit): $10,500 down, ~$2,050/month total payment (includes MIP for life)
Conventional (3% down, 680 credit): $9,000 down, ~$1,975/month total payment (PMI drops at 20% equity)
Conventional (5% down, 740 credit): $15,000 down, ~$1,890/month total payment (lower PMI, drops at 20%)

My Recommendation

Do not guess. Let me run both scenarios with your actual numbers. Sometimes borrowers with a 620 credit score are better off on conventional. Sometimes borrowers with a 700 score get a better deal on FHA due to specific pricing factors. Every situation is different.

Call me at 850-346-8514 or use the Apply Online button. I will compare both options side by side and show you exactly which one saves you more money.