Question 1

What credit score do I need for an FHA loan vs conventional?

Accepted Answer

FHA loans accept credit scores as low as 500 with a 10% down payment, or 580 with a 3.5% down payment. Conventional loans typically require a minimum 620 score, and the best rates go to borrowers with scores above 740. If your score is between 620 and 680, compare both options carefully — the lower FHA rate may offset the MIP costs. Above 720, a conventional loan is almost always the better deal long-term.

Question 2

Does FHA mortgage insurance ever go away?

Accepted Answer

For FHA loans originated after June 2013 with a down payment below 10%, the annual MIP lasts for the entire loan term — it never drops off. For loans with 10% or more down, MIP drops after 11 years. This is the single biggest long-term cost disadvantage of FHA loans. Conventional PMI automatically cancels when your loan-to-value ratio reaches 78%, or you can request cancellation at 80% LTV. Borrowers who start with FHA often refinance to a conventional loan once they have 20% equity.

Question 3

Can I use an FHA loan to buy a rental property?

Accepted Answer

FHA loans require the borrower to occupy the property as a primary residence within 60 days of closing. You cannot use an FHA loan to purchase a pure investment property. However, you can use FHA to buy a 2–4 unit multifamily property if you live in one of the units — this is a common house-hacking strategy. After living in an FHA-financed property for one year, you may be able to convert it to a rental and purchase another home.

Question 4

What is the FHA loan limit for 2026?

Accepted Answer

FHA loan limits vary by county and are adjusted annually. For 2026, the baseline single-family FHA loan limit in most US counties is $498,257. High-cost areas like San Francisco, Los Angeles, and New York City have limits up to $1,149,825. If the home price exceeds your area's FHA limit, a conventional or jumbo loan is required. Check the FHA loan limit for your specific county at the HUD website before calculating.

FHA vs Conventional Loan