WHAT IS A CONVENTIONAL LOAN?
Conventional loans are usually home loans that are not guaranteed, nor insured with the help of the federal government. This means the actual details of the loan can be different than what you hear about them.
For example, loans that adhere to requirements set out by Fannie Mae and Freddie Mac usually ask for a down payment of 3%. The Federal Housing Administration also has relaxed standards that can make it possible to have a down payment of 3.5%.
Loan programs backed by the federal government, aside from those through the Federal Housing Administration, include VA loans and USDA loans.* VA loans are available for active military personnel and veterans, while USDA loans are targeted towards those who are buying rural property since they are backed by the Department of Agriculture.