Non-QM Loans

How Non-QM Loans Work

Who Non-QM Loans May Be Right For

Non-Qualified Mortgage (Non-QM) loans are loan programs designed for borrowers whose income, employment history, or financial profile may not fit traditional underwriting requirements used by conventional lenders. These flexible loan options can help qualified borrowers access financing when standard mortgage programs may not be the best fit.

Non-QM loans are structured to evaluate repayment ability using alternative documentation, income sources, or qualifying criteria, making them a useful option for self-employed individuals, business owners, investors, and others with unique financial situations.

Non-QM loan programs are often considered by borrowers who don’t fit traditional mortgage categories, including:
Self-employed borrowers or business owners with non-traditional income documentation
Borrowers with fluctuating income or limited tax history
Real estate investors seeking financing for non-owner-occupied properties
Borrowers who have experienced credit events such as past bankruptcy or foreclosure
Individuals with large assets but limited reported income
Eligibility and product availability depend on individual financial profiles and lender requirements.

Types of Non-QM Loan Options

Non-QM loans may include a variety of specialized mortgage structures, such as:

Bank Statement Loans
Income verification using personal or business bank statements instead of W-2s or tax returns.

Asset Depletion Loans
Repayment ability assessed based on assets rather than income.

Interest-Only Non-QM Loans
Payments may be structured to cover interest only for a defined period.

Foreign National Loans
Programs for non-U.S. citizens purchasing property in the United States, depending on lender guidelines.

The availability and terms of these loan types vary by lender and borrower profile.

Traditional mortgage programs typically require strict documentation of income, employment, and assets. Non-QM loans, on the other hand, may consider alternative forms of income verification such as bank statements, asset depletion analysis, or other acceptable methods based on lender guidelines.

Lenders offering Non-QM loans may also consider different factors such as overall financial strength, credit profile, the property’s value, and the loan-to-value ratio. Terms, rates, and underwriting criteria vary based on individual programs and borrower qualifications.