Non-QM loans open up lending opportunities for non-traditional borrowers, including:

• Retirees who are no longer working full-time
• Individuals investing in real estate properties
• Self-employed professionals or gig economy workers
• Applicants with a high debt-to-income ratio
• Borrowers with imperfect credit histories

The Consumer Financial Protection Bureau (CFPB) establishes guidelines for assessing a borrower's ability to repay a home loan. Lenders typically evaluate your eligibility using standard documents such as:

• W-2 forms
• Bank statements
• Pay stubs
• Tax returns

With Non-QM loans, you can use alternative forms of income documentation, providing greater flexibility for non-traditional borrowers.

Non-QM loans aren't eligible for purchase by Fannie Mae or Freddie Mac, nor can they be backed by government agencies like the Federal Housing Administration (FHA) or the USDA. As a result, the lender assumes all the risk when providing the loan.

To mitigate this risk, lenders typically charge higher interest rates compared to conventional mortgages, which can lead to increased monthly payments.

While specific criteria for qualifying can vary by lender, non-QM loans offer more flexibility than traditional loans.

Credit History

Non-QM loans can be accessible even if you have fair or poor credit. Many non-QM loans are available to borrowers with credit scores of 620, and some programs extend to those with credit scores as low as 580 or even 500.

Debt-to-Income Ratio

Traditional loans usually require a debt-to-income ratio of 43% or lower. However, non-QM loans are available to individuals with debt-to-income ratios of 50% or higher, offering loan options to those who might otherwise be disqualified from homeownership due to their debts.

Bank Statement Loans

Designed for self-employed borrowers, these loans use your bank statements instead of tax returns to verify income.

Interest-Only Loans

Pay only the interest for a set period, lowering your initial monthly payments. Ideal if you expect higher income in the future or plan to sell or refinance soon.

DSCR (Debt Service Coverage Ratio) Loans

Perfect for real estate investors, these loans qualify you based on the rental income of the property, not your personal income.

Foreign National Loans

These loans are tailored for non-U.S. citizens or non-resident aliens, making it easier for international buyers to invest in U.S. real estate.

ITIN (Individual Taxpayer Identification Number) Loans

For borrowers without a Social Security Number but with an ITIN, these loans provide a pathway to homeownership.

Non-Warrantable Condo Loans

Ideal for condos that don’t meet conventional lending standards, such as those with high rental ratios or incomplete developments.

Alternative Documentation Loans

These loans offer flexible documentation requirements, allowing you to qualify using rental income, profit and loss statements, or other alternative credit sources.

Contact us today to learn more about how our Non-QM mortgage products can help you achieve your homeownership goals.