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 often require a higher credit score compared to government-backed loans. Borrowers usually need to make a down payment, which can range from 3% to 20% of the home's purchase price. Conventional loans come in two main types: conforming and non-conforming. Conforming loans meet specific guidelines set by government-sponsored entities like Fannie Mae and Freddie Mac, while non-conforming loans do not. Interest rates and terms can vary, making it essential for borrowers to shop around for the best deal.