A “conforming” loan is one which conforms to the standards established by Fannie Mae and Freddie Mac. A “non-conforming” loan is one that does not meet these standards. One reason that a loan may not meet the standards is that it is higher than the maximum loan amount established (“Jumbos’). Other loans do not meet the underwriting guidelines of the secondary agencies (Fannie Mae and Freddie Mac) and therefore are considered “non-conforming.” These mortgage loans are deemed to carry more risk than “conventional” loans, and therefore can not be sold in the conventional secondary market. The primary reasons for non-conforming status are poor credit and high ratios of debt payments-to-income, or the borrowers do not have the ability to verify their income. Michael Dunsky has mortgage programs that are intended for the non-conforming borrower.

BENEFITS:

There are many people who have encountered difficult times and, for one reason or another, have imperfect credit histories or too much debt, or, have stable income that may not be able to be documented for various reasons. Depending upon the nature of the problem, these borrowers are classified according to “risk”:

“A” is almost perfect

“B” has slightly greater deficiencies;

“C and “D” borrowers have more serious problems, or several risk factors combined, i.e. sub par credit and income that is not able to be verified.

These borrowers may still be able to obtain a mortgage in many of these cases, although the interest rate and down payment requirements may be different for each level of risk. Both adjustable rate programs and fixed rate programs are available. It is very important to note that the homebuyer who has suffered previous financial setbacks is no longer automatically denied mortgage financing.