TL;DR — the short version
Both can work with very little down. FHA starts at 3.5% down with a 580+ credit score. Conventional loans can start at 3% down for first-time buyers.
Mortgage insurance is the big difference. FHA charges a 1.75% upfront premium plus an annual premium that usually lasts the life of the loan if you put less than 10% down. Conventional PMI can come off once you reach 20% equity.
2026 loan limits cover most JoCo starter homes. The FHA limit for a single-family home in Johnson County is $541,287, and the conforming (conventional) limit is $832,750.
Credit score usually decides it. Lower scores often price better with FHA. Stronger scores often make conventional cheaper over time.
Compare real Loan Estimates. Ask your lender to quote both on the same home and look at the monthly payment, cash to close and how long the mortgage insurance lasts.
“Should I go FHA or conventional?” is one of the first questions first-time buyers ask, usually right before they talk to a lender. The honest answer is that it depends on your credit, your down payment and how long you plan to keep the loan. The good news is that both options are realistic for most homes in Lenexa, Overland Park and Shawnee.
This guide walks through the real differences in plain language, using the 2026 limits that apply in Johnson County. If you haven’t landed on a budget yet, start with How Much House Can I Afford in Johnson County, KS? and come back here.
1. The Quick Comparison
FHA | Conventional | |
|---|---|---|
Minimum down payment | 3.5% with a 580+ score (10% with 500–579) | 3% for eligible first-time buyers |
Upfront mortgage insurance | 1.75% of the loan (usually rolled into the loan) | None |
Monthly mortgage insurance | Annual premium, often 0.55% with 3.5% down | PMI, priced by your credit and down payment |
When it ends | Life of the loan with less than 10% down; 11 years with 10%+ down | You can request removal at 80% of original value; it ends automatically at 78% |
2026 one-unit limit in Johnson County | $541,287 | $832,750 |
Seller help with closing costs | Up to 6% | 3% with under 10% down (higher with more down) |
What to do: Use this table as a starting point, not a decision. The right answer comes from two side-by-side Loan Estimates on the same price.
2. How FHA Loans Work
FHA loans are insured by the Federal Housing Administration, which lets lenders approve buyers with lower credit scores or smaller down payments.
Who FHA tends to fit
Buyers with credit in the 500s or low 600s. FHA allows 3.5% down with a score of 580 or higher, and 10% down with a score from 500 to 579. Individual lenders can set higher minimums.
Buyers with higher debt-to-income ratios. FHA guidelines are often more flexible here than conventional.
Buyers who plan to refinance later. If rates fall or your credit improves, you may refinance into a conventional loan and drop the FHA premium.
The trade-off
FHA mortgage insurance has two parts. The upfront premium is 1.75% of the loan amount, and most buyers roll it into the loan. The annual premium is split into monthly payments. For most 30-year loans with 3.5% down, it’s 0.55% a year, and it stays for the life of the loan unless you put at least 10% down.
FHA appraisals also check that the home meets HUD’s minimum property standards. Peeling paint, a broken handrail or a non-working furnace may need to be fixed before closing. If you’re looking at a condo, the building may need FHA approval.
What to do: If you’re touring older homes in Overland Park or Shawnee, ask your agent to flag obvious repair items early so an FHA appraisal doesn’t surprise you a week before closing.
3. How Conventional Loans Work
Conventional loans aren’t government insured. Most follow Fannie Mae and Freddie Mac guidelines, which is why the limit is called the “conforming” loan limit.
Low-down-payment options
Standard 97% loan-to-value. Fannie Mae allows 3% down when at least one borrower is a first-time buyer, with no income limit.
HomeReady and Home Possible. These also allow 3% down and are generally for buyers earning at or below 80% of the area median income. You don’t have to be a first-time buyer.
Credit scores in 2026
In November 2025, Fannie Mae removed its hard 620 minimum credit score for loans run through its automated underwriting system. That doesn’t mean approval at any score. Lenders and mortgage insurers can still set their own minimums, and lower scores pay more for PMI.
The PMI advantage
With less than 20% down you’ll pay private mortgage insurance, but it isn’t permanent. Under federal law, you can ask your servicer to cancel it once your balance is scheduled to reach 80% of the home’s original value, and it ends automatically at 78% if you’re current on payments (CFPB).
What to do: Ask your lender for the PMI monthly cost at your actual credit score, not a sample quote. That number often decides the whole comparison.
Not sure which loan fits your situation?
I’ll connect you with lenders who will quote both side by side before you start touring. Get started →
4. 2026 Loan Limits in Johnson County
Loan limits cap how much you can borrow, not the price of the home. You can buy a more expensive home with a larger down payment.
Loan type | 2026 one-unit limit | Source |
|---|---|---|
FHA | $541,287 | HUD (national floor, which applies in Johnson County) |
Conventional (conforming) | $832,750 |
Most first homes in Lenexa, Overland Park and Shawnee fall well under both limits. If you’re near the FHA limit, conventional may be the simpler path. You can confirm any county’s limit with HUD’s FHA Mortgage Limits lookup.
What to do: FHFA and HUD typically announce the next year’s limits in late November and December. If you’re closing in early 2027 near a limit, ask your lender which year’s number applies to your loan.
5. How Your Loan Choice Affects Your Offer
In a competitive Johnson County listing, sellers look at the whole offer. Some sellers worry that FHA appraisal requirements could lead to repair requests. A strong preapproval, a clean inspection plan and a realistic closing date help any loan type compete.
Seller concessions also differ. FHA allows sellers to contribute up to 6% toward your costs. Conventional loans allow 3% when you put less than 10% down, 6% with 10% to 25% down, and 9% with more than 25% down. If you plan to ask the seller for help, see Closing Costs in Kansas: What First-Time Buyers in Johnson County Actually Pay.
What to do: Make sure your preapproval letter matches the loan you’ll actually use. Switching loan types after an offer is accepted can cause delays.
6. Questions to Ask Your Lender
“Can you quote FHA and conventional on the same price and down payment?”
“What is my monthly mortgage insurance on each, and when does it end?”
“What is my total cash to close on each, including the FHA upfront premium?”
“Does either option work with down payment assistance?” See Down Payment Assistance in Johnson County, KS.
“If my credit score goes up 20 points, how do the numbers change?”
Frequently Asked Questions
Is FHA or conventional better for first-time buyers in Kansas?
Neither is better for everyone. FHA often works better for lower credit scores or higher debt, while conventional is often cheaper over time for stronger credit because PMI can be removed.
What is the 2026 FHA loan limit in Johnson County, KS?
The 2026 FHA limit for a one-unit home in Johnson County is $541,287, which is the national floor set by HUD. The conventional conforming limit is $832,750.
Can I put 3% down on a conventional loan in Johnson County?
Yes, if you qualify. Fannie Mae allows 3% down when at least one borrower is a first-time buyer, and HomeReady and Home Possible also allow 3% down for buyers who meet income limits.
Does FHA mortgage insurance ever go away?
With less than 10% down, FHA’s annual premium lasts for the life of the loan. With 10% or more down, it ends after 11 years. Many buyers remove it by refinancing into a conventional loan later.
When can I remove PMI on a conventional loan?
You can request cancellation when your balance is scheduled to reach 80% of the home’s original value, and it ends automatically at 78% if you’re current on payments.
Related Resources
The Johnson County First-Time Buyer Checklist — free step-by-step guide
This article is general information, not lending, legal or tax advice. Loan limits, mortgage insurance rates and underwriting guidelines change, so confirm current terms with a licensed lender before you make decisions.
Free guide
The Johnson County First-Time Buyer Checklist
Get the step-by-step checklist, payment worksheet and inspection list I give my own first-time buyers.