A conventional loan is a mortgage that is not backed by a government agency, like FHA or VA, and typically follows guidelines set by Fannie Mae and Freddie Mac. These loans usually require higher credit scores and larger down payments than government loans but offer more flexibility in terms and property types. Benefits of a conventional loan include the ability to avoid mortgage insurance with a 20% down payment, potentially lower overall costs for well-qualified borrowers, and no upfront mortgage insurance premium. They are a popular choice for buyers with strong credit and stable income.