FHA vs Conventional Loans in Miami-Dade: Which One Fits You

Short answer

In Miami-Dade, FHA usually fits buyers with credit scores under the mid-600s or higher debt, and conventional usually fits buyers with stronger credit who want mortgage insurance that can come off. FHA allows 3.5% down with a 580 score and loans up to $667,000 in 2026; conventional allows 3% down for first-time buyers and loans up to $832,750. The building matters too: many Miami condos are approved for one program and not the other.

Side-by-side: the numbers as of October 2026

• Loan limit, 1 unit, Miami-Dade: FHA $667,000. Conventional $832,750.
• Loan limit, 2 units: FHA $853,900. Conventional $1,066,250.
• Minimum down payment: FHA 3.5% with a 580+ score, 10% with 500 to 579. Conventional 3% if at least one borrower is a first-time buyer (fixed rate, 1 unit, primary home), otherwise 5%.
• Credit score: FHA needs 500 at minimum; below that the loan is ineligible. Fannie Mae no longer sets a minimum score for loans run through its Desktop Underwriter; manually underwritten loans need 620 (fixed) or 640 (ARM). Most lenders still apply their own minimums.
• Mortgage insurance: FHA charges an upfront premium of 1.75% plus an annual premium. Conventional charges private mortgage insurance (PMI) only when you put down less than 20%.
• Occupancy: FHA is for primary homes only. Conventional also covers second homes and investment property.

Limits come from HUD and FHFA; see our FHA limits table and conforming limits table.

MIP vs PMI: the real cost difference

FHA mortgage insurance (MIP) has two parts, per HUD Handbook 4000.1:

• Upfront: 1.75% of the base loan, usually added to the loan.
• Annual: for 30-year loans of $726,200 or less, 0.55% a year if you put down less than 5%, and 0.50% with 5% or more. Every 1-unit FHA loan in Miami-Dade is under $726,200, so those are the rates that apply here.
• How long: if you start above 90% LTV (under 10% down), MIP stays for the life of the loan. With 10% or more down, it ends after 11 years. The usual way out is refinancing later.

Example: a $400,000 home with 3.5% down. Base loan $386,000. Upfront MIP $6,755, for a total loan of $392,755. Annual MIP starts around $2,123 a year, about $177 a month.

Conventional PMI has no upfront charge on most loans. The monthly cost depends heavily on your credit score and down payment, so a 760 score usually pays much less than a 660. By federal law (Homeowners Protection Act), you can ask to cancel PMI when your balance reaches 80% of the original value, and it generally ends automatically at 78% if you are current.

Rule of thumb: strong credit tends to favor conventional; weaker credit tends to favor FHA, because FHA pricing does not rise as sharply with lower scores. Rates vary daily; call 305-425-1990 for today's pricing on both.

The condo angle in Miami-Dade

In Miami-Dade, the building often decides the loan before your credit does.

• FHA: the project must be on HUD's approved list, or the unit must get a single-unit approval. HUD's 2019 condo rule allows single-unit approvals in some projects that are not on the list. HUD's general owner-occupancy standard for existing projects has been 50%, which rules out many investor-heavy buildings.
• Conventional: the lender reviews the project under Fannie Mae or Freddie Mac rules. In Florida, Fannie Mae's quick limited review only works at 75% LTV or less for a primary home, so low-down-payment buyers need a full review.
• Both: buildings with unfunded critical repairs, safety litigation or a failed structural inspection run into trouble. Florida's milestone inspection and reserve study rules have pushed HOA dues and special assessments up in many older towers.

A building can be FHA-approved and fail conventional review, or the reverse. Check the building first. Our Miami condo down payment guide walks through warrantable rules and the post-Surfside law.

When FHA wins, when conventional wins

FHA often wins when:

• Your score is below the mid-600s, or you have a recent credit event.
• Your debt-to-income is on the high side.
• You are buying a 2-4 unit property to live in. In Miami-Dade, the 2-unit FHA limit is $853,900 with 3.5% down.
• The condo is FHA-approved but not conventional-eligible.

Conventional often wins when:

• Your score is strong and PMI will cost less than MIP.
• You want mortgage insurance that comes off without refinancing.
• The loan is above $667,000 (up to $832,750).
• It is a second home or investment property.
• You put 20% down and want no mortgage insurance at all.

Down payment help works with both. Miami-Dade County and Florida Hometown Heroes each offer up to $35,000 to eligible buyers; see down payment assistance programs.

What changes in 2027 and how we compare

HUD Mortgagee Letter 2026-11 lets FHA lenders use FICO 10T and VantageScore 4.0 alongside Classic FICO for case numbers assigned on or after January 1, 2027. The 580 and 500 thresholds stay the same.

QMS Lending (NMLS #1781090), an independent broker in Doral with 100+ lenders, prices both options on the same day so you compare total payment, cash to close and how long mortgage insurance lasts. In English or Spanish. Subject to credit approval.