Which type of mortgage insurance is not guaranteed or insured by the government?

The choice indicating that conventional loans and private mortgage insurance (PMI) is not guaranteed or insured by the government is valid because PMI is typically purchased by borrowers to protect the lender against the risk of default on conventional loans. Unlike government-backed loans such as FHA, VA, and USDA loans, which have explicit federal backing, PMI operates as a private insurance affair.

In the case of FHA insurance, it is backed by the Federal Housing Administration, while VA insurance is a benefit offered to veterans, providing them mortgage guarantees. Similarly, USDA loans are guaranteed by the U.S. Department of Agriculture for rural development purposes. Each of these options involves some government sponsorship, differentiating them significantly from conventional loans with PMI, which rely on private insurers and do not have government backing to absorb losses in case of foreclosure.