A loan with an unpaid principal balance or an unexpired term that exceeds lending limitations established by the principal purchasers and guarantors of the secondary mortgage market; the federal home loan mortgage corporation, and the federal national mortgage association.... read full article
Also called a jumbo loan. Conventional home mortgages not eligible for sale and delivery to either Fannie Mae (FNMA) or Freddie Mac (FHLMC) because of various reasons, including loan amount, loan characteristics or underwriting guidelines. Nonconforming loans usually incur a rate and origination fee premium.
A mortgage program that offers approval guidelines that are not industry standards. It may, for example, have different loan limits than conforming loans, but may offer financing in conforming and jumbo amounts. Note - The agreement that states the home mortgage amount to be borrowed and the terms and conditions of the loan. It also includes a complete description of how the loan should be repaid and the time frame for the repayment.