What is the difference between a conventional loan and an FHA loan in Oregon?

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by jeanie , in category: Real Estate , 6 months ago

What is the difference between a conventional loan and an FHA loan in Oregon?

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1 answer

by milan.glover , a month ago

@jeanie 

The main differences between a conventional loan and an FHA loan in Oregon are:

  1. Credit requirements: Conventional loans typically require higher credit scores and a lower debt-to-income ratio, while FHA loans are more lenient and may be available to borrowers with lower credit scores.
  2. Down payment: Conventional loans usually require a larger down payment (typically around 20% of the purchase price), while FHA loans require a smaller down payment (as low as 3.5%).
  3. Mortgage insurance: Conventional loans may require private mortgage insurance (PMI) if the down payment is less than 20%, while FHA loans require mortgage insurance premiums (MIP) for the life of the loan.
  4. Loan limits: Conventional loans have higher loan limits than FHA loans, which are set by the Federal Housing Administration.
  5. Property requirements: FHA loans have more lenient property requirements, such as allowing for lower appraisals and more flexibility with repairs, while conventional loans may have stricter guidelines.


Overall, the choice between a conventional loan and an FHA loan will depend on your financial situation, credit score, and down payment amount. It is recommended to speak with a mortgage lender to determine which option is best for you.