Which of the following is considered a characteristic of a conventional loan?

In the context of conventional loans, the characteristic of not requiring private mortgage insurance (PMI) can be applicable in certain scenarios, which makes it the correct choice. Conventional loans are typically defined as loans that are not insured or guaranteed by the federal government. They can require PMI if the down payment is less than 20%, but if a borrower makes a down payment of 20% or more, they can avoid PMI altogether. This flexibility is a hallmark of conventional loans.

Understanding the other options provides clarity on the broader landscape of mortgage types. Government backing is a defining feature of loans like FHA, VA, and USDA loans, which provide safety nets for lenders, unlike conventional loans. Low down payment requirements often characterize FHA loans, which cater specifically to borrowers with lower credit profiles or less cash available at closing. Finally, while fixed interest rates are a popular choice for conventional loans, they are not exclusive to them; adjustable-rate mortgages (ARMs) also exist within this category, thereby invalidating the notion that fixed rates are a defining characteristic.