Portfolio Loan vs Conforming
Portfolio loan: bank holds + flexibility. Conforming: Fannie/Freddie buys, strict rules. Portfolio for self-employed, unique properties.
| Credit score | — |
| Income type | — |
| Property type | — |
| Conforming-eligible? | — |
| Best loan type | — |
| Portfolio rate (est) | — |
| Conforming rate (est) | — |
| Reasoning | — |
Portfolio loans are held by the originating bank (not sold to Fannie/Freddie). Banks set their own rules — useful for self-employed borrowers, unique properties, jumbo amounts, or non-warrantable condos. Trade-off: higher rates (0.5-1.5% premium).
When Portfolio Wins
Self-employed with complex income (use bank statements vs tax returns). Non-warrantable condos (>50% rental, single-entity owns >10%). Unique properties (mixed-use, log cabin, large acreage). Foreign nationals. Investors with multiple properties hitting Fannie cap (10 financed). Recent self-employment (under 2 years).
Conforming Wins
W-2 borrower with 2+ year history. Single-family or warrantable condo. Credit 620+. DTI under 43%. Standard property. Lower rate (Fannie/Freddie subsidizes). Lower fees. Faster underwriting.
Cost Premium
Portfolio rates: typically 0.5-1.5% above conforming. Fees: similar but lender flexibility on points/credits. Total cost: portfolio borrower pays maybe $100/month extra on $300K loan. Worth it if conforming impossible — and possibly worth it for flexibility if borderline.
Last updated May 2026. Sources: CFPB Non-Conforming Loans.