B/C Loans

B/C Loans:

B/C Loans do not meet the credit requirements of Fannie Mae and Freddie Mac. They are known as B, C and D paper loans. Loan applicants typically have a bad credit history, have filed for bankruptcy, or have had a property in foreclosure.

B/C Loans are often issued as temporary loans until the applicant can restore credit and qualify for conforming "A" loans. Interest rates on B/C Loans are generally higher than for conforming "A" loans.

B/C Loans became near extinct with the mortgage meltdown in 2007. Since that time FHA lending has taken over as being the goal to obtain for the individuals who would have needed a B/C Loan outlet.

FHA does not directly post a minimum credit score but the market for lenders do. Click here for more on FHA loans.

The B/C lending market may just come back. Minnesota has passed laws that will limit types of B/C lending. For example, Minnesota does not allow stated income loans or loans with prepayment penalty's.