Conventional Loan

In real estate financing, a conventional loan is a mortgage or deed of trust that is not insured or guaranteed by a government agency such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA). These loans are typically offered by private lenders, including banks, credit unions, and savings and loan associations, and are underwritten based on the borrower’s creditworthiness, income, assets, and the value of the property. Conventional loans often require higher credit standards and larger down payments than government-backed loans, but they may offer greater flexibility in property types and loan terms. They are a common financing option for buyers who meet standard lending criteria.