This is the question we hear every single day: "Should I go FHA or conventional?" The honest answer is — it depends on your credit score, your down payment, and how long you plan to stay in the home. My partner Sam Stoneman and I have run this comparison hundreds of times for Utah buyers, and there's no universal winner. But there is a right answer for your specific situation. Here's the framework we use.
*FHA MIP is for the life of the loan if you put less than 10% down. With 10%+ down, MIP drops off after 11 years.
This is the biggest factor most buyers overlook. FHA charges two layers of mortgage insurance:
Conventional PMI, by contrast, is typically 0.5–1.5%/year depending on credit — but you can request removal once you've built 20% equity, or it automatically cancels at 22%. Over a 10-year hold, conventional with decent credit almost always wins on total cost.
Sam's Rule of Thumb: "If your score is above 660 and you can do 5% down, run the conventional numbers first. On a $400K Utah home, the PMI savings over 7 years more than covers the slightly higher rate you might see on FHA. We've seen buyers save $20,000+ long-term by going conventional when they thought FHA was their only option." — Sam Stoneman, Edge Home Finance
Home price: $380,000 in West Jordan, UT
FHA: Qualifies easily. Rate ~6.5%, MIP $174/month forever. Upfront MIP: $6,650 added to loan.
Conventional: May face lender overlays at 610. Some lenders go to 620 minimum. Higher PMI even if approved (~$250–300/month at this credit tier).
Winner: FHA — lower PMI, more lender options at this credit score.
Home price: $520,000 in South Jordan, UT
FHA: Loan limit is $524,225 — barely fits. But that 1.75% upfront MIP adds $9,100 to your balance. MIP: $238/month, never goes away.
Conventional: PMI ~$130/month at 720 credit + 5% down. Cancels at 80% LTV (roughly year 8 at normal appreciation). No upfront MIP.
Winner: Conventional — saves $1,300+ per year once PMI drops. Over 7 years: ~$9,000+ savings.
Home price: $345,000 in Bountiful, UT
DTI: 52% back-end ratio. Down payment is 100% gift from parents.
FHA: Designed for this. Accepts 100% gift, allows DTI up to 57% with compensating factors. Strong option.
Conventional: 52% DTI is a challenge. Many conventional lenders cap at 45–50%. Gift fund rules are stricter (need own funds for some programs).
Winner: FHA — hands down. This buyer may not qualify conventional at all.
One common misconception: "FHA requires less down." That's not always true. Conventional 97 (Fannie/Freddie) allows 3% down with a 620+ credit score — that's actually less than FHA's 3.5%. The difference is PMI structure and credit flexibility, not down payment minimum.
For Utah's median home price around $480,000 in 2026:
Reality check: That FHA upfront MIP gets rolled into your loan, which means you're paying interest on it for 30 years. On a $400K loan, that $7,000 upfront MIP costs you closer to $14,000 over the life of the loan when you factor in interest. It's not free money — it's a deferred cost.
FHA appraisers are required to flag health and safety issues — peeling paint, broken windows, missing handrails, roof problems. This is great for buyers but can kill deals on older Utah homes or fixer-uppers. Sellers know this, and some will refuse FHA offers or price accordingly.
Conventional appraisals focus on value, not condition. If you're buying in an older neighborhood or competing in a hot market, conventional may actually get you more accepted offers — even with slightly less favorable terms.
FHA rates have historically been 0.1–0.3% lower than conventional for borrowers with 580–660 credit. But conventional rates improve significantly with credit score — by the time you're at 740+, conventional rates often match or beat FHA. The rate advantage narrows fast as your credit improves.
FHA vs conventional isn't a debate — it's math. We'll run a real side-by-side for your credit score, down payment, and home price in Utah. Takes 2 minutes to start.
See What You Qualify For →Here's how Sam and I think about it: start with conventional, see if you qualify, then compare the real monthly numbers side by side. Most buyers assume FHA is the default "beginner" loan — and it's not. For buyers with 640+ credit and 5% down, conventional frequently wins on total 5- and 10-year cost.
That said, FHA exists for a reason. If your credit is in the 580–630 range, your DTI is high, or you're relying on gift funds, FHA may be the only path to homeownership right now. And that path is worth taking — homeownership builds wealth regardless of which loan you use to get there.
The right loan isn't FHA or conventional. It's the one that gets you into a home you can comfortably afford — and keeps you there.