The complete whole loan that is extended to a borrower for residential financing. It is a standalone, individual loan that is issued to a borrower with the objective to finance a residential real estate. For that reason, it does not include commercial loans and rural development financing. The process involved is opposed to a securitization, where several financial assets are pooled to create a package (packaged loans, rather than whole loans).

Originators of residential whole loans offload their portfolios by reselling such loans in the aftermarket to other market participants- institutional investors, namely: brokerages, financial institutions, and government agencies in order to mitigate and better control their risks (rather than keeping these loans on balance sheets many years ahead). By reselling the loans, originators (the lenders) can recover the principal in a very short period of time.