The Difference Between Conventional and Non Conventional Mortgages

Simply put, a conventional mortgage is not backed by the government while non-conventional mortgages are backed by the government. Examples of non-conventional mortgages include the FHA, VA, USDA and HUD Section 184 programs. Almost all other loans are conventional mortgages . Non-conventional mortgages usually require borrowers to pay extra upfront and/or ongoing fees in addition to their monthly payment but usually charge lower mortgage rates because they are insured by the federal government. Borrowers typically prefer conventional mortgages to avoid the extra fees involved with most non-conventional mortgages. The tables below summarize numerous conventional and non-conventional mortgage programs including key loan features. (more…)