FHA or conventional for a first-time buyer in Texas?
A plain-English answer for Texas first-time buyers.
By Grant Martin, NMLS 2849522. Updated November 2026.
FHA can be more flexible if your credit is still building. Conventional often suits buyers with stronger credit, and its mortgage insurance can usually be removed later. The better choice depends on your numbers, so compare both.
How they compare
| FHA | Conventional | |
|---|---|---|
| Backed by | Insured by the government | Not government-insured, usually sold to Fannie Mae or Freddie Mac |
| Credit | Often more flexible | Pricing often rewards stronger credit |
| Mortgage insurance | Has its own rules and may last a long time | Can usually be removed once you build enough equity |
| Property | Must meet FHA standards | Follows the lender's and investor's requirements |
When FHA may fit
You're still building credit, have a higher debt load, or a conventional loan comes out more expensive once mortgage insurance is included.
When conventional may fit
You have stronger credit and want a path to removing mortgage insurance, or the home may not meet FHA's property standards.
How to decide
Ask for a Loan Estimate for each option. Compare the monthly payment, cash to close, mortgage insurance and total costs over the time you expect to keep the loan. If you've served, ask about VA loans too, and check whether a Texas assistance program works with either option.
Common follow-up questions
Is FHA only for first-time buyers?
No. FHA isn't limited to first-time buyers, though many first-time buyers use it.
Can I remove mortgage insurance?
Conventional mortgage insurance can usually be removed once you build enough equity. FHA has its own rules, so ask how they apply to your loan.
Want this applied to your situation?
Grant can walk through your numbers and options with you.
Sources
General information only. Rules, programs and funding can change. All loans are subject to credit approval and underwriting, and not every program is available through every lender.