What type of loans are defined as non-government loans?

Non-government loans are primarily categorized as conventional loans. These loans are not insured or guaranteed by a government entity, such as the Federal Housing Administration (FHA) or the United States Department of Veterans Affairs (VA). Instead, conventional loans are typically offered by private lenders and can be subjected to various guidelines established by those lenders.

Conventional loans can further be classified into two categories: conforming and non-conforming loans. Conforming loans must meet specific criteria set by government-sponsored enterprises like Fannie Mae and Freddie Mac, while non-conforming loans do not meet those criteria but are still considered conventional because they are not backed by government insurance. Therefore, the term 'conventional' is more precise in defining non-government loans as it encompasses both conforming loans and others that do not qualify for secondary market sale but are outside the government's purview.

This understanding highlights the distinction between conventional loans and other types of loans, such as subprime loans, which refer to loans provided to borrowers with lower credit scores, and government-insured loans which are backed by governmental programs to increase accessibility for buyers, especially those with less favorable credit histories.