Using information provided by lenders who finance Conforming loans, Lending Arsenal’s multi-lender loan pricing search engine for mortgage professionals effectively uses information from top wholesale lenders to help you compare sales quotes with rates and rebates, all tailored to your borrower's loan scenario.

Conventional/A-Paper loans, also referred to as Prime and Conforming, are a product of long-term public policy of making home ownership more accessible to the American people. As a part of this policy, the U.S. government indirectly subsidizes the housing market through two large lenders that enjoy special status with the government: Fannie Mae and Freddie Mac. These two “super-lenders” enjoy a lower-than-normal lender cost of borrowing money and buy loans in bulk on the secondary market. Even though only a fraction of all loans ends up being actually bought by Fannie Mae or Freddie Mac, the readiness of these two companies to buy up loans creates a stabilizing effect on the industry and keeps the cost of borrowing relatively low.

For a loan to be “sellable” to Fannie Mae and Freddie Mac, that loan must conform to certain standards. In other words, the loan must be Conforming. For example, Fannie Mae and Freddie Mac may require a loan to have a certain maximum Loan-to-Value ratio (LTV) or Debt-to-Income ratio (DTI), or a certain minimum borrower credit score, etc. Failing to meet any one parameter does not necessarily make a loan non-conforming, especially if the other parameters are strong. When determining whether a loan is conforming, lenders look at the overall picture instead of checking off each parameter individually. For example, lenders may be willing to fund a loan with 100% LTV (a loan with no downpayment) as an A-Paper loan if the borrower has a high enough credit score (750, for example). In other words, deciding whether a loan is Prime or not requires the balancing of several factors (as opposed to checking items off a list).

In short, a loan that, on balance, satisfies the minimal requirements set out by the government-subsidized agencies is known as Conforming, Conventional, Prime, or A-Paper. Since the secondary market for conforming loans is stabilized by Fannie Mae and Freddie Mac, the interest rates charged of consumers on such loans are generally low and the range of available loan programs (in terms of rates and broker rebate points) on any given day is rather narrow, making the choice of lender less significant from the pricing standpoint.