Non-Conforming Loans

A loan that does conform to the guidelines established by Fannie Mae or Freddie Mac is called a non-conforming loan. A loan that is larger than the conforming loan limit is called a Jumbo loan. Loans that do not meet the credit quality of conforming loans ('A' paper) are called 'B','C' and 'D' paper loans. Second mortgage loans - credit lines, home equity loans, home improvement loans are also non-conforming loans. Portfolio Loans Loans may be sold on the secondary market to Fannie Mae, Freddie Mac or a select number of conduits (e.g. GE Capital) or they are kept in the banks portfolio (e.g. American Savings Bank). Portfolio loans may have more flexible qualifying criteria, while saleable loans have to meet an investors criteria. Commercial Loans programs are for 5+ unit residential properties.