Which type of loan does NOT require insurance or guarantee?

A conventional loan is a mortgage that is not insured or guaranteed by the federal government. This means that lenders offering conventional loans assess the borrower's creditworthiness without any backing from government entities like the FHA or VA. Conventional loans typically adhere to guidelines established by Fannie Mae and Freddie Mac, but they do not have the same insurance requirements that other types of loans might have.

Wraparound loans, FHA loans, and VA loans involve different levels of insurance and guarantees. For instance, FHA loans require mortgage insurance premiums because they are backed by the Federal Housing Administration, while VA loans are guaranteed by the Department of Veterans Affairs, which also protects lenders against losses. A wraparound loan, often used in seller financing arrangements, may or may not require insurance depending on its specific structure, but it is not a conventional loan categorized under typical financing options.

Overall, a conventional loan stands out as it allows for more flexibility in terms of insurance requirements, making it an option for borrowers who may not need or want the additional costs associated with insurance or guarantees.