The main difference between FHA and conventional loans is the government insurance backing. Conventional loans loans are not insured or guaranteed by the federal government, while the FHA program does receive federal backing. FHA has lower limits for credit scores and PMI is automatically added. The only way to remove that private mortgage insurance fee is by refinancing, while in a conventional loan it will automatically be removed once the 20% equity has been reached. Note: A conventional mortgage loan can also be insured.