Which of the following is an example of a conventional loan?

A conventional loan is defined as a type of mortgage that is not insured or guaranteed by the federal government. This generally refers to loans that conform to the guidelines set by government-sponsored entities like Fannie Mae and Freddie Mac, but do not involve any government backing.

The option representing a commercial bank's 15-year loan fits this definition perfectly because it is typically offered without the support of government programs. This is a straightforward loan agreement where the borrower receives funding directly from a bank, and common terms include repayment schedules, interest rates, and duration, which are all determined by the bank's policies and the borrower's qualifications.

In contrast, an FHA loan is a government-backed mortgage designed for low-to-moderate-income borrowers and comes with lower down payment requirements. A VA loan is also a government program offering loans to veterans and active military members, providing favorable terms without the requirement for mortgage insurance. The designation of a government-backed loan applies to these types of loans, which involve insurance or guarantees from federal entities.

This distinction is crucial in understanding the different types of financing available in the real estate market, emphasizing that conventional loans exist independently of government support, unlike the other options presented.