A large portion of real-estate loans are qualified as non-conforming because either the borrower's financial status or the property type does not meet bank guidelines.
The flexibility of private money can allow for a much broader range of deals to be funded, although a lender may require more detailed and substantive collateral and documentation.
Rates for non-conforming lenders are typically higher than those for banks, but terms are more flexible and loans more easily attainable.
They are used to fund industrial and retail projects like RV parks, theatre complexes, gas stations, medical centers and more.
Residential non-conforming loans are strictly regulated, usually with much higher rates than banks.