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 can generally be classified as subprime loans. They have a greater default risk for the lender since the borrower’s credit score is generally 650 or below, a ranking that puts them in the fair, poor or very poor category, as designated by VantageScore, the scoring system developed by three credit rating agencies, Equifax, TransUnion, and Experian. According to data from Experian, 69.10% of borrowers fit into these categories.
