Conventional loans are any type of creditor agreement that is not financed through the Veterans Administration (VA) or supported by the Federal Housing Administration (FHA). Generally, all conventional loans are protected by government-sponsored entities like Fannie Mae (FNMA) and Freddie Mac (FHLMC).
There are two different types of conventional loans: conforming and non-conforming. Conforming loans must meet the guidelines set by Fannie Mae and Freddie Mac. Any loan that doesn’t meet their guidelines is considered a non-conforming loan.
A jumbo loan is a type of loan in which the amount borrowed is more than the limit set by Fannie Mae (FNMA) & Freddie Mac (FHLMC). A loan amount greater than $548,250 would be considered a jumbo loan.