What is a conventional home loan?

A conventional home loan is a mortgage loan that’s not backed by a government agency. Conventional loans are broken down into “conforming” and “non-conforming” mortgage loans.

Conventional loans follow lending rules set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. 

You usually need a credit score of at least 620 to qualify for a conventional loan, although a score that’s above 740 will help you get access to better interest rates. Depending on your financial situation and the amount you’re borrowing, you may qualify for a conventional loan program with a down payment as little as 3%.