What is a conventional mortgage?
Learn what makes a mortgage conventional and how conforming status fits in.
A conventional mortgage is generally a home loan that is not insured or guaranteed by a federal mortgage program such as FHA, VA or USDA.
Conventional loans can have fixed or adjustable rates and can be conforming or nonconforming.
Credit, down payment, mortgage insurance, property and underwriting requirements vary by lender and loan product.
Conforming and nonconforming
A conforming loan follows applicable standards for purchase by Fannie Mae or Freddie Mac. A nonconforming loan falls outside one or more of those standards. Conventional does not automatically mean conforming.
Mortgage insurance may apply
A conventional loan may require private mortgage insurance depending on the down payment and loan structure. The cost and potential cancellation rules differ from FHA mortgage insurance.
The terms are not universal
Lenders and products can differ in credit standards, eligible properties, documentation and pricing. Avoid treating one advertised conventional option as the rule for all borrowers.
Compare with government-backed options
Evaluate eligibility, upfront cash, insurance or program charges, payment, rate and long-term cost. No loan type is automatically best for every buyer.
Compare the complete mortgage offer
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