A conventional loan is a loan made against real estate as security that does not involving government participation in the form of insuring (FHA) or guaranteeing (VA) the loan. The mortgagee can be an institutional lender or a private party. Conventional loans include those loans insured by private mortgage insurance companies.

Fannie Mae and Freddie Mac loans are also considered conventional loans.  Even though Fannie Mae and Freddie Mac are government owned entities, since they do not insure loans, they are still considered conventional loans.

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