Can I put 5% down on an FHA loan?

Yes. FHA minimum is 3.5 percent at 580+ FICO but you may put more down. Putting 5 percent down on FHA does not change the 0.55 percent annual MIP rate, does not avoid the 1.75 percent UFMIP, and still triggers life-of-loan MIP (the 11-year sunset only applies at 10 percent or more down).

What is conventional 5 percent down called?

Standard conventional 95 LTV. No special programme name needed. Available on Fannie Mae and Freddie Mac with 620 minimum FICO. PMI is required; rate depends on FICO and the insurer (MGIC, Radian, Essent, Enact).

Should I put 5 percent down on FHA or conventional?

It depends on FICO. At 720+ FICO conventional wins by $10,000 to $20,000 over a typical hold thanks to PMI cancellation. At 660 to 700 the answer is closer; both price competitively. Below 660 FHA usually wins because conventional LLPAs make the rate add-up uneconomic.

5% Down: FHA vs Conventional

At 5% down, both programmes price competitively for most FICO bands. The verdict turns on FICO tier and hold period. Putting 5% down on FHA does not trigger the 11-year MIP sunset (only 10%+ does), so the structural disadvantage of FHA remains.

Per-FICO breakdown at 5% down on $300k home

FICO	FHA annual MI	Conv PMI rate	10-year cost winner
620 to 639	0.55%	1.10 to 1.50%	FHA
640 to 659	0.55%	0.85 to 1.10%	FHA
660 to 679	0.55%	0.70 to 0.90%	Close call
680 to 699	0.55%	0.55 to 0.70%	Conventional
700 to 719	0.55%	0.45 to 0.60%	Conventional
720 to 739	0.55%	0.35 to 0.50%	Conventional
740 to 759	0.55%	0.30 to 0.40%	Conventional
760+	0.55%	0.20 to 0.30%	Conventional

Why 5% down on FHA still gets life-of-loan MIP

Per HUD Mortgagee Letter 2013-04 (still in force), the MIP cancellation rule is binary at 10% down at origination. 5% down lands in the under-10 category and triggers MIP for the full 30-year term. Conventional, by contrast, follows the Homeowners Protection Act (12 USC 4902) which mandates automatic PMI cancellation at 78% LTV regardless of down payment.

PMI cancellation timeline at 5% down conventional

Annual appreciation	Year LTV hits 80%	Year LTV hits 78%
0% (worst case)	Year 17 (amortization alone)	Year 19
3% (typical)	Year 6 to 7	Year 7 to 8
5% (strong)	Year 4 to 5	Year 5 to 6

You may request PMI removal at 80% LTV with a current appraisal. Automatic cancellation at 78% LTV happens without action under HPA.

Rate disclaimer

PMI rates vary by insurer and lender. Numbers reflect typical mid-2026 rate cards. Consult a licensed loan officer.

Sources

HUD Mortgagee Letter 2024-04 (MIP rates): HUD ML 2024-04
HUD Mortgagee Letter 2013-04 (MIP cancellation rules): HUD mortgagee letters
HPA 12 USC 4902 (PMI cancellation): 12 USC 4902
Fannie Mae LLPA Matrix: LLPA matrix