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What is a conventional loan?

Conventional Loans

Conventional loans are mortgage loans other than those insured or guaranteed by a government agency such as the FHA (Federal Housing Administration), the VA (Veterans Administration), or the Rural Development Services (formerly know as Farmers Home Administration, or FmHA).

Conventional loans usually have lower closing costs
and fees than loans backed by a government agency.
However, most lenders require that you have at
least 20-25% equity in your home to qualify for
this type of loan.

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