FHA loans are backed by the government and designed to be more accessible. They require lower down payments (3.5% vs. 3-20% for conventional), have more flexible credit requirements, and allow higher debt-to-income ratios. The downside is that you’ll pay mortgage insurance for the life of the loan unless you refinance.

Conventional loans offer more flexibility and better terms if you have good credit and can put down at least 20%. If you put down less than 20%, you’ll pay PMI, but you can remove it once you have 20% equity.