B-20 Guidelines
Quick Summary
Federal underwriting rules for federally regulated lenders.
ELI5 Explanation
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Banks use these rules to stress test you before saying yes.
Detailed Explanation
The B-20 framework influences debt service calculations and borrower qualification. Private lenders are not bound by B-20 in the same way, so they can serve borrowers who fail bank tests.
Example
A self-employed borrower fails stress test at a bank but qualifies with an equity-focused private lender.
Why It Matters
It explains why borrowers shift from banks to private lending.