Conventional home loans refer to conforming mortgages that are eligible for purchase by Fannie Mae and Freddie Mac. These loans include portfolio loans, construction loans, and even subprime loans.
Lenders consider a conventional home loan as a loan that conforms to the guidelines set by Freddie Mac and Fannie Mae, the two government sponsored enterprises that provide liquidity in the mortgage market. A conventional home loan is a mortgage that is not guaranteed or insured by the US government, such as VA, FHA and USDA.