Buying in Las Vegas but not sure whether FHA or conventional financing fits you best? You are not alone. Between changing loan limits, mortgage insurance rules, and offer strategies, the choice can feel confusing. In this guide, you will learn the core differences, what it takes to qualify, how each loan affects your monthly cost and offer strength, and where to find Las Vegas–specific resources. Let’s dive in.
FHA vs conventional basics
FHA and conventional loans are both widely used in Clark County, but they work differently.
- FHA loans are insured by HUD. They are designed to help buyers with smaller down payments and more flexible credit histories. You apply through FHA‑approved lenders.
- Conventional loans are not insured by HUD. Most are conforming loans that follow Fannie Mae or Freddie Mac guidelines. They are offered by banks, credit unions, and mortgage companies with a wide range of product options.
Why it matters in Las Vegas: FHA can open the door if you have limited savings or a lower credit score. Conventional financing can offer more flexibility with mortgage insurance and is often viewed as a stronger offer in multiple‑offer situations.
Who qualifies and how
Credit and down payment
- FHA: HUD permits scores down to 500 with 10% down. With a score of 580 or higher, you can often qualify with 3.5% down. Many lenders set higher overlays, commonly 620 or above.
- Conventional: Many lenders prefer 620 or higher. Some programs allow as little as 3% down for first‑time buyers. Putting 20% down removes private mortgage insurance.
Debt‑to‑income and reserves
- FHA: Underwriting can allow higher debt‑to‑income ratios, especially with compensating factors like stable employment or savings.
- Conventional: Automated underwriting can be stricter. Strong credit and reserves help approve higher DTIs.
Occupancy rules
- FHA: You must occupy the home as your primary residence, typically within 60 days after closing.
- Conventional: Primary residence loans have similar occupancy expectations. Rules depend on the specific program.
Property types
- Both can finance single‑family homes, condos, and some 2–4 unit properties. FHA has extra condo project approval requirements. Conventional condo rules differ by investor and often favor already‑approved projects.
Costs and insurance over time
Mortgage insurance
- FHA: You pay an upfront mortgage insurance premium at closing (commonly 1.75% of the loan amount, often financed) plus an annual mortgage insurance premium paid monthly. FHA mortgage insurance can last 11 years if your original loan‑to‑value ratio is 90% or less. If it is over 90%, insurance typically lasts for the life of the loan. Check current HUD policy for any updates.
- Conventional: You pay private mortgage insurance when you put less than 20% down. Cost is based on your credit score, down payment, and loan size. PMI can usually be removed once you reach 20% equity, with automatic termination at 22% equity under the Homeowners Protection Act.
Interest rates
Rates vary by credit, loan size, and market conditions. FHA rates are often similar to, or sometimes slightly different from, conventional rates depending on your profile. Lender quotes change daily, so compare written estimates.
Closing costs and concessions
Both FHA and conventional loans allow seller contributions toward closing costs, within program limits. Ask your lender to confirm the maximum for your situation. In competitive Las Vegas submarkets, sellers may be less willing to offer concessions, so plan your cash to close carefully.
Appraisals and your offer in Las Vegas
Property condition and repairs
- FHA appraisal: Includes HUD Minimum Property Requirements focused on safety, soundness, and structural integrity. If the appraiser flags health or safety issues, repairs are usually required before closing.
- Conventional appraisal: Focuses on value and basic habitability. Repairs are still possible, but enforcement is often less strict than FHA.
Offer strength in competitive areas
Entry‑level homes and popular neighborhoods often draw multiple offers. Sellers may view conventional offers as lower risk because of fewer perceived repair hurdles and easier mortgage insurance removal later. If you use FHA, you can still compete by strengthening other terms, such as earnest money, inspection timelines, and clear communication about financing.
Time to close
Both loan types can close on similar timelines. The biggest variables are your lender’s experience, how quickly you deliver documents, and whether the appraisal identifies repairs. Choosing a lender who regularly closes FHA loans in Las Vegas can reduce surprises.
Local limits and assistance in Clark County
Loan limits adjust annually and are county‑specific. Before you shop, confirm the current year’s numbers and program options.
- Check FHA county loan limits using HUD’s county loan limits lookup.
- Review conforming loan limits on the FHFA conforming loan limits page.
- Explore Nevada‑wide down payment help through the Nevada Housing Division first‑time buyer programs. Program names, income limits, and terms can change, so verify details directly.
- Look for local updates on the City of Las Vegas housing programs page and broader county initiatives via Clark County community resources.
- For unbiased guidance, contact HUD‑approved housing counselors. They can help you compare FHA and conventional choices and identify legitimate assistance programs.
Which loan fits your profile
Best fit for FHA
- You have limited savings and need 3–3.5% down.
- Your credit history is still improving and conventional pricing is not favorable yet.
- You expect to use gift funds or down payment assistance that aligns with FHA rules.
Best fit for conventional
- You have stronger credit and can put 5–20% down.
- You want the option to cancel PMI as you build equity or refinance.
- You want the strongest possible offer posture in a competitive neighborhood.
Condo buyers
- If you are considering an FHA loan, confirm the project’s status on HUD’s FHA condo approval list. Many conventional investors also maintain condo project standards, so check with your lender early.
How to compare your options
Use this quick checklist to make an apples‑to‑apples decision:
- Get prequalified for both FHA and conventional scenarios.
- Request written Loan Estimates for each option. Use the CFPB guide to the Loan Estimate to understand rate, APR, monthly payment, mortgage insurance, and cash to close.
- Confirm current FHA and conforming loan limits for Clark County.
- Ask lenders about overlays, such as higher minimum credit scores or extra reserve requirements.
- Verify whether your down payment assistance pairs with FHA, conventional, or both, and how it affects mortgage insurance and closing costs.
- If you are buying a condo, confirm project approval requirements early.
- Ask how appraisal repairs will be handled and who is likely to pay for them.
- For conventional scenarios, map out a PMI removal plan. For FHA, ask how long MIP will last based on your down payment.
- Confirm seller concession limits for your loan type.
Next steps
Choosing between FHA and conventional is not just about your credit score. It is about total cost, offer strategy, and how the property itself will appraise. Compare side‑by‑side estimates, verify loan limits, and get local insight before you write an offer.
If you want a clear path from preapproval to closing in Clark County, reach out. Our team brings local experience across Summerlin, Henderson, North Las Vegas, and beyond, and we are happy to coordinate with your lender to make your offer as strong as possible. Hablamos español.
Ready to get answers tailored to your budget and neighborhood? Connect with Unknown Company for a no‑pressure consult.
FAQs
What is the key difference between FHA and conventional loans?
- FHA loans are HUD‑insured with flexible credit and low down payment options, while conventional loans follow Fannie/Freddie guidelines and often allow PMI removal as you build equity.
How do FHA mortgage insurance costs work for Las Vegas buyers?
- FHA includes an upfront premium that is often financed plus a monthly premium that can last 11 years or the life of the loan depending on your original loan‑to‑value.
Do FHA appraisals require repairs in Clark County?
- Yes, when health or safety items are flagged under HUD’s Minimum Property Requirements, repairs are usually required before closing.
Can seller concessions cover my closing costs with FHA in Las Vegas?
- FHA allows seller contributions up to program limits, but in competitive local markets sellers may be less willing to offer concessions.
Which loan closes faster in Las Vegas, FHA or conventional?
- Timing depends more on lender experience, your documentation, and any appraisal repairs than on the loan type itself.
Can I refinance from FHA to a conventional loan later to remove MIP?
- Yes, many homeowners refinance into a conventional loan once they have sufficient equity or improved credit to eliminate FHA mortgage insurance.
Are condos harder to buy with FHA in Las Vegas?
- FHA requires condo project approval, which can limit options, so check the project on HUD’s condo approval list and confirm conventional requirements with your lender.
