A Non-Conforming Loan is a type of mortgage that does not meet the guidelines set by government-sponsored entities like Fannie Mae and Freddie Mac. These loans often have higher loan amounts, which exceed the conforming loan limits, and may cater to borrowers with unique financial situations or credit profiles. Because they do not conform to standard requirements, non-conforming loans typically come with higher interest rates and stricter underwriting processes. They can be beneficial for individuals seeking to purchase higher-priced homes or those with non-traditional income sources, providing more flexibility in financing options.