Under what condition would a loan not qualify as a conventional loan?

A loan does not qualify as a conventional loan if it is backed by a government agency. Conventional loans are those that are not insured or guaranteed by the federal government, which distinguishes them from government-backed loans such as FHA, VA, or USDA loans. These government programs are designed to help borrowers who may not otherwise qualify for traditional financing due to lower credit scores or other financial factors.

In contrast, loans with fixed interest rates, regardless of the amount, or those issued by credit unions can still qualify as conventional loans if they meet the necessary criteria. The loan amount also does not disqualify it as a conventional loan, as there are no minimum loan amounts that define a conventional loan, making an amount less than $150,000 eligible as long as it meets other criteria. Thus, it is the backing by a government agency that sets apart conventional loans from those that are government-backed.