B, C, D paper loans do not meet the credit requirements of Fannie Mae and Freddie Mac. They are known as B, C, D paper loans. Loan applicants typically have a bad credit history, have filed for bankruptcy, or have had a property in foreclosure.
B, C, D paper loans are often issued as temporary loans until the applicant can restore credit and qualify for conforming A loans. Interest rates on B, C, D paper loans are generally higher than for conforming A loans.