Government-backed loans are insured by federal agencies. This insurance protects the lender if the borrower fails to repay the loan and is meant to encourage lenders to offer mortgages to a wider range of home buyers.
It’s easier to qualify for an FHA loan than for a Conventional loan, which is a mortgage that isn’t’ insured or guaranteed by the federal government.
Conventional mortgages are offered by many lenders that also offer government-backed loans. Lenders generally view conventional loans as riskier because they’re not guaranteed by the government, so conventional mortgages tend to have tougher requirements.
Mortgages backed by government agencies offer different qualifications that can make them more attractive to some home buyers.
Conventional loans aren’t limited to borrowers based on income, location, or military status. Anyone who is able to meet a lender’s standards is eligible for a conventional mortgage.