What Is a Portfolio Loan?

Introduction

A portfolio loan is held by the lender in its own portfolio instead of being sold to investors. The lender sets its own guidelines, which can be more flexible than conforming or government programs. See What Is a Non-QM Loan, Mortgage Loan Delivery Process, and What Is a Conventional Loan.

Frequently Asked Questions

What is a portfolio loan?

A portfolio loan is one the lender keeps in its own portfolio instead of selling to Fannie Mae, Freddie Mac, or other investors. The lender sets its own guidelines.

Why would a lender offer portfolio loans?

Lenders may offer portfolio loans to serve borrowers who do not fit conforming or government guidelines, or to retain profitable loans.

Are portfolio loans more flexible?

Often yes. Because the lender sets its own rules, they may accept non-standard income, higher DTI, or unique property types. Terms vary by lender.

Are portfolio loans more expensive?

Rates and fees can be higher than conforming loans because the lender bears the risk. Compare offers.