What is the difference between a conforming loan and a non-conforming loan?
A loan that conforms to or meets the guidelines established by Fannie Mae or Freddie Mac is considered a conforming loan. The guidelines establish the maximum loan amount, down payment, borrower credit and income requirements, and suitable properties. Lenders that make loans established by these guidelines may sell the loans to Fannie Mae or Freddie Mac. A loan that does conform to or meet the guidelines established by Fannie Mae or Freddie Mac is considered a non-conforming loan. Loans that do not meet the credit quality of conforming loans (“A” paper) are called “A -” “B”,”C” and “D” paper loans. Second mortgage loans, such as lines of credit, home equity loans, and home improvement loans are also considered non-conforming loans.
A loan that conforms to the guidelines established by Fannie Mae or Freddie Mac is considered a conforming loan. The guidelines establish the maximum loan amount, down payment, borrower credit and income requirements, and suitable properties. Lenders that make loans established by these guidelines may sell the loans to Fannie Mae or Freddie Mac. These lenders may retain the servicing on these loans, so the borrower will continue to make payments to the original lender. Conforming loans (also known as “A” paper loans) make up the majority of loans in the United States. A loan that does conform to the guidelines established by Fannie Mae or Freddie Mac is considered a non-conforming loan. A loan that is larger than the conforming loan limit ($400,000) is known as a Jumbo loan. Loans that do not meet the credit quality of conforming loans (“A” paper) are called “A -” “B”,”C” and “D” paper loans.
A loan that conforms to the guidelines established by Fannie Mae or Freddie Mac is considered a conforming loan. The guidelines establish the maximum loan amount, down payment, borrower credit and income requirements, and suitable properties. Lenders that make loans established by these guidelines may sell the loans to Fannie Mae or Freddie Mac. These lenders may retain the servicing on these loans, so the borrower will continue to make payments to the original lender. Conforming loans (also known as “A” paper loans) make up the majority of loans in the United States. A loan that does conform to the guidelines established by Fannie Mae or Freddie Mac is considered a non-conforming loan. A loan that is larger than the conforming loan limit ($322,700) is known as a Jumbo loan. Loans that do not meet the credit quality of conforming loans (“A” paper) are called “A -” “B”,”C” and “D” paper loans. Second mortgage loans, such as lines of credit, home equity loans, and home improvement loans
