Is a conventional loan cheaper than FHA in Florida?

For borrowers with 680+ credit and at least 5% down, conventional loans are usually cheaper over the life of the loan because PMI is lower than MIP and ends at 20% equity.

What credit score do I need for a conventional loan?

Most conventional loans in Florida require a minimum 620 FICO score, although the best pricing starts at 740 and above.

Can I refinance from FHA to conventional in Florida?

Yes. Once you reach 20% equity, you can refinance from FHA to conventional to drop mortgage insurance entirely. This is the most common reason Florida buyers refinance.

Which has lower closing costs, FHA or conventional?

FHA closing costs are typically slightly higher because of the 1.75% upfront mortgage insurance premium, although that fee is usually rolled into the loan amount.

Conventional Loans

Conventional Loan vs. FHA: Which Is Better in Florida?

A clear comparison of conventional and FHA loans for Florida buyers, including down payment, PMI vs MIP, credit, and total cost.

6 min readPublished February 4, 2026

Quick Answer

Conventional loans are usually cheaper long-term for Florida buyers with 680+ credit and 5%+ down because PMI drops off at 20% equity. FHA wins for buyers with lower credit (580–680) or small down payments because it allows 3.5% down at competitive rates regardless of credit tier.

Key takeaways

Conventional: 3–5% down, PMI drops at 20% equity, best for 680+ credit.
FHA: 3.5% down, MIP often for the life of the loan, best for 580–680 credit.
Conventional loan limit in 2026: $806,500 in most Florida counties.
FHA appraisals are stricter — older or as-is homes often go conventional.

Conventional vs FHA at a glance

Both loan types let Florida buyers purchase a primary residence with a low down payment, but their pricing and rules diverge once you compare credit and equity.

Minimum credit: Conventional 620 / FHA 580 (500 with 10% down).
Minimum down: Conventional 3% (first-time) or 5% / FHA 3.5%.
Mortgage insurance: Conventional PMI drops at 20% equity / FHA MIP can last the life of the loan.
Property type: Both allow primary; FHA is owner-occupied only.
Appraisal: FHA enforces minimum property standards; conventional is appraisal-only.

When a conventional loan wins in Florida

If your credit score is 680 or higher and you have 5% down, a conventional loan almost always beats FHA on total cost. PMI is cheaper than MIP at that credit tier and falls off automatically once you reach 78% loan-to-value.

When FHA wins in Florida

FHA is the better tool when your credit score is between 580 and 680, you only have 3.5% down, or your debt-to-income is high. The government insurance means rate and approval do not punish lower credit as harshly as conventional pricing does.

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