The answer depends on your credit score, down payment, and how long you plan to keep the loan. Here's a side-by-side comparison with real numbers for Oregon buyers.
Conventional vs. FHA Loan: A Side-by-Side Comparison
The choice between a conventional loan and an FHA loan is one of the most common decisions Oregon homebuyers face. The right answer depends on your specific situation — and it's not always the one you'd expect.
Key Differences at a Glance
| Feature | FHA Loan | Conventional Loan |
|---|---|---|
| Minimum Down Payment | 3.5% (580+ score) | 3% (620+ score) |
| Minimum Credit Score | 500 (FHA) / 580 (3.5% down) | 620 typical |
| Mortgage Insurance | Required for life of loan (if <10% down) | Cancellable at 20% equity |
| Loan Limits (Jackson County 2026) | $524,225 | $806,500 (conforming) |
| Debt-to-Income Ratio | Up to 57% with compensating factors | Up to 45–50% |
When FHA Wins
FHA is typically the better choice when your credit score is below 680, when you have a higher debt-to-income ratio, or when you need the most flexible qualification standards. The trade-off is permanent mortgage insurance if you put less than 10% down.
When Conventional Wins
Conventional loans win when you have a 680+ credit score and can put 5%+ down. The mortgage insurance is cancellable once you reach 20% equity, which can save you hundreds per month over the long run.
The best way to know which is right for you is to run the numbers side by side. Contact Stephen for a free loan comparison — he'll show you the total cost of each option over your expected time in the home.
Frequently Asked Questions
Is FHA always cheaper than conventional for first-time buyers?
Can I switch from FHA to conventional later?
Stephen Harris, CMC · CRMS · CFMP · CVLS
Licensed Originator · X2 Mortgage · NMLS #203065
Stephen Harris is a Certified Mortgage Consultant with X2 Mortgage, serving Medford, Ashland, Grants Pass, and all of Southern Oregon. With 20+ years of combined real estate and mortgage experience, he holds 5 NAMB designations and 8 real estate credentials — giving his clients an unmatched depth of expertise. Licensed in Oregon, Arizona, and California.