A Conventional loan is any type of creditor agreement that is not financed by the Veterans Administration (VA) or supported by the Federal Housing Administration (FHA). All Conventional loans are guaranteed by government-sponsored entities like Fannie Mae (FNMA) and Freddie Mac (FHLMC).
The two types of Conventional loans are conforming and non-conforming loans. Conforming loans must meet guidelines set by FNMA and FHLMC. Any loan that doesn’t meet these guidelines would be considered a non-conforming loan.