Definition: In real estate financing terminology, a nonconventional loan is a government-insured or government-guaranteed mortgage, such as an FHA or VA loan.
Example
A private lender makes an FHA-insured mortgage to an eligible borrower.
Keep the distinction clear
Government backing does not necessarily mean the government directly lends the money. Nonconventional differs from nonconforming, which concerns eligibility standards for conventional loans.
Related terms
Conventional Loan · Conforming Loan · Federal Housing Administration (FHA)
Keep studying
Primary and Secondary Mortgage Markets: Fannie Mae, Freddie Mac, and Ginnie Mae
References: CFPB: mortgage insurance
Pronunciation (US): non-kuhn-VEN-shuh-nuhl lohn (capitals show stress)
Pronunciation reference: Merriam-Webster
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