Loan programs
FHA or conventional? How the choice actually works in Georgia and Florida
The down payment is the headline, but mortgage insurance, credit floors, loan limits, and property condition usually decide which loan is cheaper over the years you keep it.
7 min read · Updated October 2026
Most buyers compare these two loans on down payment alone. That is the least interesting difference. The one that matters is what happens to the monthly payment in year five, and whether you can ever get out from under the insurance.
Here is how the trade-off actually breaks down for a purchase in Georgia or Florida.
The short answer
- FHA asks less down but charges mortgage insurance for the life of the loan in most cases.
- Conventional insurance drops off at 78–80% LTV; FHA's generally does not without a refinance.
- Credit score, loan limit, and property condition decide borderline files.
Down payment and the insurance that follows it
FHA allows 3.5% down with a 580 credit score or better, and it requires an upfront mortgage insurance premium financed into the loan plus an annual premium paid monthly. On a typical 30-year FHA loan with a small down payment, that monthly premium stays for the life of the loan unless you refinance into a conventional product later.
Conventional financing starts at 3% down for qualifying first-time buyers and 5% otherwise. Private mortgage insurance is required above 80% LTV, but it is cancellable: it must be removed at 78% LTV by amortization alone, and you can request removal at 80% with an appraisal in many cases.
- Short horizon, tight cash: FHA's low down payment and softer credit tolerance often win.
- Long horizon, decent credit: conventional usually wins, because the insurance eventually goes away and the payment drops.
- Equity growth matters here — in a fast-appreciating market, conventional insurance disappears sooner than the schedule suggests.
Credit and debt-to-income tolerance
FHA is more forgiving at the bottom of the credit range: 500–579 scores can still qualify at 10% down, and automated underwriting tolerates debt-to-income ratios that conventional guidelines would decline. Conventional generally needs a 620 minimum and treats a 45–50% DTI as the practical ceiling, with pricing adjustments stacking up below 700.
Loan limits
FHA limits are set county by county and in many metros sit below the conforming limit, which is adjusted annually. Above the FHA limit for the county, FHA is simply unavailable and the conversation moves to conventional or jumbo. Above the conforming limit, it is jumbo — and jumbo carries no mortgage insurance at all, which occasionally makes it cheaper than a high-LTV conforming loan.
Property condition and condos
FHA appraisals enforce minimum property standards: no peeling paint, a functioning heat source, safe access, no active roof leaks. That is a real constraint on fixer-uppers that would pass a conventional appraisal.
Condos cut the other way. FHA requires the project to be on its approved list or to pass a single-unit review, and it applies a self-sufficiency test to investor-heavy buildings. In Florida especially, older condo projects with deferred maintenance or milestone-inspection issues can fail either path — the answer depends on the specific building, not the program.
The Georgia and Florida cost picture
Escrow is where regional differences show up. Florida hazard and wind coverage can be a substantial monthly number, and both states have property tax structures that make the escrow portion of the payment larger than buyers expect from an online calculator. Because FHA insures a slightly higher percentage of the loan, its monthly obligation is more sensitive to those costs.
Practically: run both scenarios with real tax and insurance figures for the specific address, then compare the payment in year one and in year eight. That comparison, not the down payment line, is the decision.
Program guidelines change and individual files vary. Confirm current limits, premiums, and county rules before relying on any of this for a decision.