What type of mortgage loan is in first position and not insured by a federal agency?

The correct answer is a conventional loan, which is a type of mortgage that is not insured or guaranteed by a federal agency. This category includes loans that are typically issued by private lenders or banks and follows the guidelines set by Fannie Mae and Freddie Mac. Since conventional loans operate independently of federal insurance programs, they typically require stricter credit requirements and down payment criteria compared to government-backed loans.

Conventional loans can be either conforming or non-conforming. Conforming loans adhere to the limits and guidelines set by Fannie Mae and Freddie Mac, making them eligible for purchase by these entities. Non-conforming loans do not meet those guidelines and can have varying terms and conditions depending on the lender.

In contrast, FHA loans are insured by the Federal Housing Administration, VA loans are backed by the Department of Veterans Affairs, and USDA loans are associated with the United States Department of Agriculture. Each of these options includes federal insurance or guarantees, which provide lenders with a level of protection against borrower default. Therefore, they cannot be classified as conventional loans.