A conventional loan is the most common type of home loan. The requirements to qualify are more stringent than FHA as the lender will want to make sure you are a good credit risk since this type of loan is not backed by a government agency. Benefits include lower interest rate, less paperwork, easier to pass home inspection, and you can avoid paying personal mortgage insurance (PMI) if your down payment is large enough.
An FHA loan has more lenient requirements because it is insured by the Federal Housing Administration (FHA). This type of loan can be easier to qualify for with a lower credit score and has lower down payment requirements. However, FHA loans always require mortgage insurance (both an up-front mortgage insurance premium and monthly installments) and have stricter property standards. These loans are designed to help people purchase their first home but may also be a good option when refinancing a mortgage.