Non-QM Loan (Non-Qualified Mortgage)
A non-QM purchase loan is a more flexible way to buy a home, letting you qualify without the usual tax returns or W-2s—perfect if you’re self-employed or have non-traditional income.
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What is a Non-QM Loan (Non-Qualified Mortgage)?
A Non-QM (Non-Qualified Mortgage) purchase loan is a mortgage that doesn’t meet the standard rules set by the Consumer Financial Protection Bureau (CFPB) for “Qualified Mortgages.” These loans are designed for borrowers who may not fit the traditional mold—think self-employed individuals, real estate investors, retirees, or anyone with a unique income structure, recent credit issues, or higher-than-average debt. Unlike conventional loans, Non-QM mortgages allow alternative income documentation like bank statements, 1099s, or asset statements instead of W-2s and pay stubs. While they may come with slightly higher interest rates and down payment requirements, Non-QM loans open the door to homeownership for buyers who’ve been turned away by standard lenders. If you’ve struggled to qualify for a traditional mortgage, a Non-QM loan could be the right path to buying a home.
Common Types of Non-QM Loans:
Bank Statement Loans – Ideal for self-employed borrowers who use 12–24 months of bank statements to verify income.
DSCR Loans – Designed for real estate investors; approval is based on rental income, not personal income.
Asset-Based Loans – Qualification is based on assets rather than income, often used by retirees or high-net-worth individuals.
Interest-Only Loans – Borrowers pay only the interest for a set period, helpful for short-term affordability.
Foreign National Loans – Tailored for non-U.S. citizens buying property in the U.S. with alternative credit documentation.
Recent Credit Event Loans – For those with bankruptcies, foreclosures, or short sales—offering quicker paths to homeownership.
1099-Only Loans – Great for independent contractors; qualification based on 1099 income only.
P&L Loans – Allow business owners to qualify using professionally prepared profit and loss statements.
Reasons to get a Non-QM mortgage?
Ideal for Self-Employed Borrowers
Designed for entrepreneurs, freelancers, gig workers, and business owners who may not have traditional W-2 income.
Flexible Income Documentation
Qualify using alternative methods like bank statements, 1099s, profit & loss statements (P&L), or asset-based income instead of standard pay stubs or tax returns.
Support for Unique Financial Situations
Ideal for retirees, real estate investors, and borrowers with recent credit events or high debt-to-income (DTI) ratios. Non-QM loans provide flexible solutions when traditional financing falls short.
High Loan Amounts Available
Borrow up to $2.5 million, with cash-out refinance options up to $500,000—ideal for leveraging equity or funding other investments.
Variety of Loan Options
Choose from a range of Non-QM loan types to fit your needs, including bank statement loans, interest-only loans, DSCR (Debt Service Coverage Ratio) loans, asset-based loans, and 1099-only programs. Both fixed-rate and adjustable-rate mortgage (ARM) options are available to align with your short- or long-term financial goals.
Eligible for Second Homes and Investment Properties
Expand your real estate portfolio or purchase a vacation home with flexible qualification terms.
Potential Tax Benefits
Mortgage interest may be tax-deductible (consult a tax advisor to understand how it applies to your specific situation).
A Path to Homeownership When Others Say No
Non-QM loans are a solution for those turned down by traditional lenders, offering a second chance at home financing.