If you are getting ready to purchase your first new home, you may want to look into several different types of loans. Two options you have are USDA loans and conventional loans, and here are five of the differences between these two types. Terms A USDA loan is one that is offered through the U.S. Department of Agriculture Rural Development. USDA loans are backed by the U.S. government, and this means that the government will pay off your lender if you default on the loan.