Which type of residential financing is not backed by the government?

A conventional mortgage is characterized by its lack of government backing. This type of financing is typically offered by private lenders, such as banks and credit unions, and adheres to the guidelines set by Fannie Mae and Freddie Mac, two government-sponsored enterprises. Since conventional loans do not involve any explicit guarantees or insurance from the federal government, they generally have stricter credit requirements and larger down payment obligations than government-backed loans.

In contrast, FHA-insured mortgages are backed by the Federal Housing Administration, which provides insurance to lenders to encourage them to offer loans to borrowers with lower credit or smaller down payments. USDA rural development mortgages are designed for eligible rural and suburban homebuyers and are backed by the U.S. Department of Agriculture, while VA-guaranteed mortgages are provided to qualified veterans, active-duty service members, and certain members of the National Guard and Reserves, with backing from the Department of Veterans Affairs.

Overall, the conventional mortgage stands out in this context as the option that does not rely on government support, which can affect both availability and terms for borrowers.