A conventional loan is a type of mortgage that is not guaranteed or insured by any government agency. It is typically offered by banks, credit unions and other private lenders and follows specific underwriting guidelines set forth by Fannie Mae and Freddie Mac. Conventional loans are available in a variety of terms including fixed-rate mortgages, adjustable rate mortgages (ARMs) or hybrid ARMS with both fixed and variable interest rates. These loans typically require a higher down payment than government-backed loans such as FHA or VA loans, but may offer lower interest rates and closing costs.