A conventional loan is any mortgage loan that is not insured or guaranteed by the government (such as under Federal Housing Administration, Department of Veterans Affairs, or Department of Agriculture loan programs).

Conventional loans usually cost less than FHA loans but can be more difficult to get.

There are two main categories of conventional loans:

Conforming loans: These have maximum loan amounts that are set by the government. Other rules for conforming loans are set by Fannie Mae or Freddie Mac, companies that provide backing for conforming loans.

Non-conforming loans: These are Conventional loans that are above the maximum loan limits but yet lower than a Jumbo Loan. They are less standardized. Eligibility, pricing, and features can vary widely depending on the Loan to Value, Credit Scores and the overall risk like High Balance loans, Bank Statement programs, etc. They may also have lower minimum credit requirements, lower minimum down payment requirements and Higher debt-to-income ratio (DTI) allowances.

Mortgage insurance is required for some conventional loans.