Conventional Loans are mortgage loans that are not insured by the government (like FHA, VA, USDA Loans), but they typically meet the lending guidelines that have been set by Fannie Mae or Freddie Mac. Typically, conventional loans have better rates, terms and/or lower fees than other types of loans. However, conventional loans typically require a borrower to have good-to-excellent credit, reasonable amounts of monthly debt obligations, a down payment of 5-20% and reliable monthly income. Conventional loans are ideal 
for borrowers with excellent credit and at least a 5% down payment.
Most Common Types of Conventional Loans
Fixed Rate Mortgages: Your rate and payment never change.
30 Year Fixed Loan
Benefits: Lowest fixed monthly payments
20 Year Fixed Loan
Benefits: Low fixed monthly payments
15 Year Fixed Loan
Benefits: Lower rate than the 30 or 20 Year Fixed Loans; Pay less interest and pay your home off more quickly.
10 Year Fixed Loan
Benefits: Lower rate; Pay off your loan and build equity faster.
5 Year Fixed Loan
Benefits: Lowest rate; Pay off your loan and build equity the fastest
Adjustable Rate Mortgages: After the initial period your interest rate can change once a year.
3/1 ARM
Fixed Rate for 3 Years, Adjustable Rate for the remaining 27 years
5/1 ARM
Fixed Rate for 5 Years, Adjustable Rate for the remaining 25 years
7/1 ARM
Fixed Rate for 7 Years, Adjustable Rate for the remaining 23 years
For Purchase transactions, Conventional Loans require the home-buyer to put down at least 5% - 20% of the purchase price of the home. For a Refinance transaction, most lenders require at least 10% equity in the property. If you don't have enough equity to qualify for a conventional refinance - even if you owe more than your home is worth - you might be eligible for a HARP 2.0 Loan.
Most conventional loan programs allow you to purchase single-family homes, warrantable condos, planned unit developments, and 1-4 family residences. A conventional loan can also be used to finance a primary residence, second home, and investment property.
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