An FHA loan is a government-backed home loan insured by the Federal Housing Administration. An FHA loan has less-restrictive qualifications compared to a conventional loan, which is not backed by a government agency. You need to have a higher credit score, lower debt-to-income (DTI) ratio and down payment to qualify for a conventional loan.
FHA vs. conventional loan: Which should you pick? Generally if you have the means and qualifications to afford a conventional loan, this is the one to opt for, since it has fewer restrictions (and.