Portfolio loans are originated and retained by the lending institution rather than being sold to Fannie Mae, Freddie Mac, or other secondary market buyers. Because the lender keeps the loan on their own books, they have flexibility to deviate from conventional underwriting guidelines. This makes portfolio loans attractive for investors with complex income structures, multiple financed properties, or unique property types that do not fit agency guidelines. The trade-off is often slightly higher rates, but the custom underwriting can be well worth it for experienced investors.