An FHA loan is a government insured loan where as a Conventional loan is not a government insured loan. The FHA loan is often easier to qualify for because it has a low down payment, being 3.5% of the purchase price. You are required to pay private mortgage insurance, so if you default on your loan and the house is not worth enough to fully repay the debt, FHA will compensate the lender for the loss. Conventional loans are harder to qualify for because it requires a 20% down payment. Because there is no government insurance, conventional loans pose a higher risk for lenders so credit and income requirements are stricter than for FHA and VA mortgages.