What Is a Conventional Loan?
A conventional loan is a mortgage that is not insured or guaranteed by a government agency. Most conventional loans are conforming loans that meet the standards of Fannie Mae and Freddie Mac, including maximum loan amounts set each year. Loans above those limits are called jumbo loans.
Down Payment and PMI
Conventional loans can allow down payments below 20%, but they typically require private mortgage insurance until the loan reaches a set loan-to-value ratio.
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🔗 Related Terms
More Home Buying Terms
- Adjustable-Rate Mortgage (ARM)
- Appraisal Gap
- Assessed Value
- Bridge Loan
- Cash-Out Refinance
- Closing Costs
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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.