A conventional loan is a type of mortgage that is not backed by the government. These loans are typically offered by private lenders, such as banks and credit unions, and they follow guidelines set by government-sponsored entities like Fannie Mae and Freddie Mac. Borrowers usually need a good credit score and a stable income to qualify. Conventional loans can be either conforming or non-conforming. Conforming loans meet the standards set by Fannie Mae and Freddie Mac, while non-conforming loans do not. These loans often require a down payment, which can vary based on the lender and the borrower's financial situation.