What’s a Conventional Loan? Who’s Fannie Mae? How do I make Freddie Mac?

A conventional loan is a mortgage that’s not backed by a government agency such as the Federal Housing Administration (FHA) or Veteran Affairs (VA).

There are two types of conventional loans: conforming and nonconforming. Conforming loans follow lending rules set by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). When a loan doesn’t follow these lending rules, it’s considered non-conforming. There are a number of factors that may cause a loan to be non-conforming, generally loan amount is a key factor.