Is a conventional loan insured and guaranteed by the government?

• A. YES
• B. SOMETIMES
• C. NOT GUARANTEED
• D. NO

Answer: (D)

Conventional loans are not insured or guaranteed by the government. They’re funded by private lenders and rely on private mortgage insurance (PMI) if the down payment is below 20%. Government backing exists for FHA, VA, and USDA loan programs, not for conventional loans. Some conventional loans may be conforming and sold to Fannie Mae or Freddie Mac, but that’s a secondary-market arrangement, not a government guarantee of the loan itself. So the correct takeaway is that a conventional loan is not insured or guaranteed by the government.