- Alt A Loan:
Alt A Loans do not meet the credit requirements of Fannie Mae and Freddie Mac. They are known as Alternative Loans. Loan applicants typically have had a credit hiccup in the past, have filed for bankruptcy, or have had a property in foreclosure or short sale.
Alt A Loans are often issued as temporary loans until the applicant can restore credit and qualify for conforming "A" loans. Interest rates on Alt A Loans are generally a little higher than for conforming "A" loans.
Features of an Alt A loan;
*Interest Only Payment Option
*Bankruptcy discharge less than 1 year
*Foreclosure of Shortsale over 1 Year
*Stated or Bank Statement income for Self Employed