Types

• Adjustable rate, fixed rate, bridge home loans, balloon loans and hybrid loans are types of conventional home loans. Each of these offers different interest rate structures and payment terms.
  
  

Credit

• Conventional loans usually require a higher credit score than FHA loans. This is partially because conventional loans aren't backed by the government.
  
  

Debt-to-Income Ratio

• A conventional home loan has a lower allowable debt to income ration, usually between 33 percent and 36 percent, whereas an FHA loan allows up to 41 percent.
  
  

Considerations

• A conventional home loan may require a down payment of 20 percent. In some cases, this amount may be higher depending on the borrower's credit.
  
  

Warning

• These home loans have a higher foreclosure rate than FHA loans. This is mainly because FHA offers foreclosure insurance and conventional loans don't.