Which of the following loans is NOT considered a "non-traditional" mortgage?

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The USDA Section 502 loan is primarily designed to assist low to moderate-income individuals or families in obtaining home financing in rural areas. It is considered a traditional mortgage because it aligns with standard lending practices, features fixed terms, and emphasizes long-term ownership stability. This type of loan typically adheres to conventional underwriting guidelines, making it accessible to borrowers looking for reliable, structured financing options.

In contrast, the pay option adjustable-rate mortgage (ARM) provides borrowers with flexible payment options. Similarly, the one-year adjustable-rate mortgage features interest rates that adjust annually, which can lead to unpredictable payment amounts over time. Both of these types of loans are categorized as non-traditional due to their more fluctuating terms and the potential for payment variability that they introduce into a borrower’s financial planning.

The 15-year fixed-rate mortgage, although having a shorter term than a standard 30-year mortgage, is also considered traditional because it maintains a stable interest rate over its life, promoting predictable monthly payments. Thus, while the other options involve more variable terms and conditions that differ from typical mortgage offerings, the USDA Section 502 loan stands out as a traditional mortgage product.

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