The main difference between a conventional loan and an FHA loan is the type of mortgage insurance they require.

A conventional loan is a type of mortgage that is not insured or guaranteed by the government. They are typically offered by private lenders such as banks and credit unions, and are not backed by the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA). Conventional loans typically require a higher credit score and a larger down payment than FHA loans, and they may also have stricter income and debt-to-income ratio requirements.

An FHA loan, on the other hand, is a type of mortgage that is insured by the FHA. They are designed to help first-time home buyers and those with lower credit scores and limited funds for a down payment. FHA loans typically have more flexible credit and income requirements than conventional loans, and they also require a smaller down payment of as little as 3.5%. However, they require mortgage insurance, which can be more affordable than private mortgage insurance (PMI) required by conventional loans.

In summary, FHA loans have lower credit and down payment requirements, but they require mortgage insurance, while conventional loans have higher credit and down payment requirements, but they do not require mortgage insurance.