A conventional loan is a type of mortgage that is not part of a specific government program, such as Federal Housing Administration (FHA), Department of Agriculture (USDA) or the Department of Veterans’ Affairs (VA) loan programs.

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However, conventional loans are commonly interchangeable with “conforming loans”, since they are required to conform to Fannie Mae and Freddie Mac’s underwriting requirements and loan limits.

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There are two primary categories of conventional mortgages:

• Conforming: A conforming mortgage follows the guidelines put in place by Freddie Mac and Fannie Mae, including loan limits.

• Non-conforming: These mortgages include both “jumbo loans” which exceed the loan limits imposed by government-backed agencies, niche products for unusual circumstances and riskier products that are much less common these days.