What is non Agency loan?

A non-agency loan is a type of mortgage that is not backed by government-sponsored entities like Fannie Mae or Freddie Mac. These loans are typically offered by private lenders and may cater to borrowers with unique financial situations or those seeking higher loan amounts. Non-agency loans often have stricter underwriting criteria and may come with higher interest rates compared to agency loans. They are commonly used for jumbo loans, which exceed conforming loan limits.