A plain-language, side-by-side comparison to help Central Texas buyers — including military families weighing all their options — decide which loan fits their situation.
Both conventional and FHA loans are widely available in Central Texas. Here's how they stack up on the factors that matter most to buyers.
| Factor | Conventional | FHA |
|---|---|---|
| Minimum Down Payment | 3% (first-time buyers via HomeReady/Home Possible); typically 5–20% | 3.5% with 580+ credit score; 10% with 500–579 credit score |
| Minimum Credit Score | Around 620 for most lenders | 580 for 3.5% down; 500–579 with 10% down |
| Mortgage Insurance | PMI required below 20% equity — cancellable once you reach 20% equity, drops automatically at 78% LTV | 1.75% upfront MIP at closing, plus annual MIP — typically required for the life of the loan |
| 2026 Loan Limits | $832,750 conforming limit for a single-unit home in most of the U.S., including Central Texas | HUD floor of $541,287 nationally for 2026; the FHA limit in the San Antonio metro (Bexar, Comal & neighboring counties) is $557,750 for a one-unit home — lower than conventional in most Central Texas counties |
| Property Standards | Broad — covers single-family homes, second homes, investment properties, most condos | Home must meet FHA Minimum Property Standards; condos must be on the FHA-approved list |
| Debt-to-Income (DTI) | Typically capped around 45–50% with strong compensating factors | More forgiving — DTI up to 56.9% possible with strong compensating factors |
| Best For | Buyers with 20%+ down or strong credit who want to avoid long-term mortgage insurance | First-time buyers with lower credit scores or limited savings who need flexible qualifying |
First-time buyer with limited savings or credit below 680 — FHA is often the better fit. The lower credit floor and 3.5% down payment make FHA more accessible. The tradeoff is long-term mortgage insurance — plan to refinance once you've built equity.
Buyer with 20% down or a credit score above 720 — Conventional is usually the stronger choice. At 20% down, you skip mortgage insurance entirely. Strong credit earns you better rates and lower costs over the life of the loan.
Military family with VA entitlement available — Run the VA loan comparison first. VA loans offer $0 down and no PMI — often the best deal available to eligible veterans and active duty. Compare all three before deciding.
The best way to know which loan wins for your situation is to see real numbers. Jenn Bailey at Unity Group Home Loans — our preferred lender — can run a conventional vs. FHA comparison using your actual credit, income, and purchase price so you're comparing apples to apples before you make a decision.
She's also listed in our Vendor Directory alongside other trusted lenders and service providers we've personally vetted.
Jenn brings deep conventional and FHA loan expertise alongside an experienced background contracting with the FBI — meaning your transaction is handled with the highest level of integrity. She'll run both scenarios side by side so you can see the real numbers before you decide.
Educational content only — not a loan offer or commitment to lend. Rates and programs change daily. Confirm current terms with a licensed lender.
Infinity Family Properties & Associates, 15126 Sirius Circle, San Antonio, TX 78245. 737-392-2812