What is the difference between an FHA loan and a First-Time Homebuyer Conventional loan?

An FHA loan is a government-backed mortgage insured by the Federal Housing Administration that’s available to first-time and repeat buyers. It requires a minimum 3.5% down payment, upfront mortgage insurance (rolled into the loan), and monthly mortgage insurance for the life of the loan.

A First-Time Homebuyer Conventional Loan is offered by lenders and is not backed by the government. It has a slightly lower minimum down payment of 3%. It still requires mortgage insurance, but borrowers can remove it once you reach 20% equity. It’s often a better option for buyers with strong credit scores.