The core trade-off
FHA loans generally allow lower credit scores and smaller down payments, but require mortgage insurance for the life of the loan in most cases. Conventional loans typically demand stronger credit but let you drop mortgage insurance once you build enough equity, which can make them cheaper over time even with a tougher entry bar.
Where FHA tends to win
If your credit score is on the lower end or you have limited savings for a down payment, FHA's more flexible qualification standards can be the difference between buying now and waiting years to qualify conventionally. It's specifically designed to open the door for buyers who wouldn't otherwise qualify.
Where conventional tends to win
If your credit and savings are solid enough to qualify, conventional loans usually cost less over the life of the loan, since PMI drops off once you hit sufficient equity and the loan itself often carries a somewhat lower rate. It's the better long-term math for buyers who can clear the higher bar.
Both can pair with NC's first-time buyer support
The NC Home Advantage Mortgage and its associated down payment assistance can be used with either FHA or conventional financing, so this isn't an either-or decision separate from the state programs, it's a layer on top of whichever loan type fits you best.
For how that state-level program actually works, see how the NC Home Advantage Mortgage program works, and for the credit and income numbers that shape both paths, credit score and income requirements for NC first-time buyer programs.