Portfolio loan
A loan a bank keeps on its own books instead of selling to Fannie Mae or Freddie Mac. Rules are set by the lender, so it can work for borrowers who don't fit standard boxes.
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See how it worksWhere this comes up: on the market
Part 1 of 4
Why a seller cares
A portfolio loan is one a bank keeps rather than sells, so the bank sets its own rules. A buyer using one may close faster or need less paperwork, and the lender may skip some standard property conditions.
Part 2 of 4
A simple example
A local bank offers the buyer a portfolio loan on your unusual property, a house with a large workshop, that a conforming lender declined.
| The situation | What a portfolio loan does |
|---|---|
| An unusual property | The bank decides for itself whether it lends on it |
| A buyer with an unusual income | The bank sets the income test |
| Underwriting | Often faster; one institution, one decision |
A portfolio lender answers to itself, which is why it can say yes where others cannot.
Part 3 of 4
What people get wrong
That portfolio loans are informal. They are real bank loans with a real appraisal; what is different is who writes the rules.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
In your Room, this word explains itself where it appears.
Your Room defines portfolio loan in the step you meet it in, beside the document or the date it belongs to. Free to set up, with an agent or on your own.
Organize my saleFree to set up. Pay once when you list: $89 or $189. 7-day refund.