Non-conforming loans
If you have tried and failed to get a loan from one of the big banks (Bank of America, Chase, etc) don’t despair, you still may be able to get what is called a non-conforming loan from a local bank or credit union.
A non-conforming loan is a loan where the borrower does not meet the lending standards set by Fannie Mae but is still credit worthy. Most small banks will sell their loans (if they are conforming loans) to a large bank so they don’t have to deal with loan maintenance. The thing about non-conforming loans however is that the small bank will not be able to sell you loan since it doesn’t technically “conform” to their lending standards. Many smaller banks are more than willing to keep you loan “in house” (not sell it) if you can prove to them that you are credit worthy.
Think of it this way, if you deal with a smaller bank or credit union your job is to prove to a person that you are credit worthy. If you deal with a large bank, you have to convince a computer program that you are credit worthy.
Please leave a comment if you have ever dealt with non-conforming loans or have anything to add on the subject.