Loan providers refute programs to own traditional finance more frequently than for FHA mortgages in part given that conventional money lacks authorities insurance coverage so you can security lender losings in the event the a debtor defaults. Such as, in the event that a borrower is unable to pay back an enthusiastic FHA home loan, the government reimburses the lending company to have 100% of your loan’s delinquent equilibrium. 5 But traditional money become zero instance defenses, as soon as loan providers generate antique financing, these are generally much more selective about the borrowers they commit to funds.