What Is a Non-QM Loan?

An alternative underwriting approach

A non-qualified mortgage, or Non-QM loan, falls outside the Qualified Mortgage criteria. It may use different methods to document income or evaluate a borrower’s financial situation. It is not an automatic approval or a way to bypass underwriting.

When it may be worth exploring

Some self-employed borrowers may have access to bank statement programs. Available investor financing may focus on the property’s rental income and expenses. Each product has its own documentation, credit, equity, property, and reserve requirements.

Consumer-purpose Non-QM loans still generally require the lender to evaluate ability to repay under applicable rules. Business-purpose investor loans can follow a different regulatory framework.

Compare the full cost

Look beyond the payment. Ask about the interest rate, APR where applicable, fees, term, repayment features, and any prepayment restrictions. Investor products may include prepayment penalties. Alternative documentation does not necessarily mean a lower cost.

We’ll discuss conventional and other available options alongside alternative programs, based on your goals and documentation. Eligibility is subject to lender review.

CFPB: Qualified Mortgage basics