---
title: "Loan Type: Conventional vs FHA"
description: "Preview how Conventional vs FHA loans change your monthly payment and cash needed before you connect an approval. Guidance on when FHA vs Conventional may fit, plus a condo caution (many condos aren’t FHA-approved)."
url: https://homes-support.padzilly.com/en/articles/40-loan-type-conventional-vs-fha
collection: "Using Padzilly"
updated: 2025-09-12
language: en
alternates: [es]
---

# Loan Type: Conventional vs FHA

Preview how Conventional vs FHA loans change your monthly payment and cash needed before you connect an approval. Guidance on when FHA vs Conventional may fit, plus a condo caution (many condos aren’t FHA-approved).

**Who this is for**  
Use this when you’re a guest or a registered user **without a lender approval connected to Padzilly**. Once you connect approval, Padzilly uses the **loan program in your approval** and your results reflect that program.

### How it works

1.  Tap **Conventional** or **FHA** above the results.
    
2.  Padzilly updates each home’s **payment** and **cash needed** using typical assumptions for that loan type.
    
3.  Your **Filter by Payment** and **Filter by Cash Needed** still apply to the updated figures.
    

### Which to choose? (general guidance — your lender will advise)

-   **FHA**
    
    -   Can fit when **cash is tight** or **credit scores are lower**.
        
    -   Allows **lower down payments** in many cases.
        
    -   Trade-offs: includes **FHA mortgage insurance (MIP)** and has property/program rules.
        
-   **Conventional**
    
    -   Often best with a **larger down payment** and **excellent credit**.
        
    -   Private mortgage insurance (PMI) can drop as equity grows.
        
    -   Frequently simpler for some properties (see condo note).
        

> **Important:** This comparison is educational. The **best program for you is decided by your lender** after reviewing your full application.

### Condo shoppers: special note about FHA

Financing **condominiums** with **FHA** can be difficult because **many condo communities are not FHA-approved**.  
If you’re browsing **condos**, we recommend previewing with a **5%-down Conventional** loan type. Your lender can confirm if a specific condo allows FHA.

### Works with SearchPro

-   Adjust **Price** and **Down Payment** to see effects under the selected loan type.
    
-   **Seller Contribution** becomes available **after you upload a lender preapproval or complete Padzilly prequalification**; it can reduce rate or closing costs within program limits.
    

### Notes

-   Estimates improve once you connect approval; terms vary by lender and program.
    
-   Eligibility depends on credit, income, property type/condition, and loan limits.