What are loans that are not backed by government insurance or guarantees called?

Loans that are not backed by government insurance or guarantees are referred to as conventional loans. This type of loan is typically offered by private lenders and does not fall under the categories of government-backed loans, such as FHA, VA, or USDA loans. Conventional loans are often seen as a standard financing option in the real estate market and can include both conforming and non-conforming loans, depending on whether they meet the criteria established by Fannie Mae or Freddie Mac.

Conventional loans can have varying terms and interest rates, and they typically require a higher credit score and a larger down payment than government-backed loans. The absence of governmental backing generally makes them a bit riskier for lenders, which can influence the interest rates offered. Understanding the nature of conventional loans is vital for anyone involved in real estate or mortgage financing, as they comprise a significant portion of the loan market.