A term repo transaction that is collateralized by a loan or other form of obligation (e.g. mortgage receivables) rather than a security. Usually, the collateral is bonds securitized from a pool of residential and commercial mortgages. This structure offers attractive returns to lenders because collateral is of lower quality than that typically required in conventional repos (repos on government bonds). Therefore, lender are exposed to credit risk and prepayment risk at the same time. The latter type of risk arises from the possibility that the mortgage package is paid off prior to the stated maturity date. In whole loan mortgage securities, the cash flows of the bond (note) are derived directly from cash flows of underlying mortgages.

In general, whole loans subdivide into mortgage whole loans and consumer whole loans.