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Conventional mortgages are the traditional kind of loans, the kind that existed before the Government created any loan program to help people who could not qualify for a mortgage.

They come in two flavors: conforming and non conforming.

Conforming Mortgages

The conforming ones fit the guidelines of Fannie Mae and Freddie Mac, two quasi-governmental institutions.

Since they are not backed by a governmental agency, they place a lot of risk on the lenders. Therefore, lenders reserve them for people with good credit scores and no income / employment issues for 1-4 unit properties that are either primary residences, second homes or investments.

Non-Conforming Mortgages

They are all the other non-government backed loans secured by a 1-4 unit property. They are riskier than the conventional conforming ones. The risk can be due to the property (non-warrantable condos), loan amount (jumbos) or the borrower (credit issues, inability / unwillingness to fully document income / employment, like bank-statement qualifying loans).