What is a loan that does not require federally sponsored insurance or guarantee?

A loan that does not require federally sponsored insurance or guarantee is classified as a conventional loan. Conventional loans are typically offered by private lenders and do not depend on government backing. This means that they are not insured or guaranteed by entities like the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA), allowing for various terms and conditions that can vary widely between lenders.

In the context of federal loans, both FHA and VA loans come with government guarantees or insurance to protect the lenders in case of default. FHA loans have insurance that protects against loss, while VA loans are backed by the government, which offers guarantees to lenders to support veterans. A secured loan refers to any loan that is backed by collateral, which can be either conventional or government-backed, and does not specifically pertain to the requirement of federal insurance.

Therefore, the defining feature of a conventional loan is the absence of federal insurance or guarantees, which distinctly categorizes it from the other options provided.