Non-QM Loans
When traditional lending guidelines don't fit your situation, non-QM programs provide flexible alternatives — without sacrificing professionalism or competitive pricing.
Program Overview
Non-QM (Non-Qualified Mortgage) loans are mortgage products that fall outside the Consumer Financial Protection Bureau's (CFPB) Qualified Mortgage guidelines. Non-QM loans are specialized mortgage products that use alternative underwriting standards and may carry different rates, terms, risks, and documentation requirements than Qualified Mortgage products. They are designed for borrowers with unique financial situations: self-employed individuals, real estate investors, foreign nationals, and high-net-worth borrowers who have strong financial positions but do not fit neatly into conventional or government lending criteria.
Who Is This Loan For?
- ✓ Self-employed borrowers who maximize tax deductions
- ✓ Real estate investors qualifying on property cash flow
- ✓ ITIN borrowers without a Social Security Number
- ✓ Foreign nationals purchasing U.S. property
- ✓ High-net-worth individuals with assets rather than traditional income
- ✓ Borrowers with recent credit events (bankruptcy, foreclosure, short sale)
- ✓ Individuals with complex or non-traditional income sources
Key Benefits
Multiple Qualification Methods
Bank statements, DSCR, asset depletion, 1099, profit & loss — choose the documentation that best represents your financial strength.
Flexible Credit Requirements
Some specialized programs may consider lower credit profiles, subject to lender guidelines, down payment, documentation, reserves, and overall risk review.
Non-Traditional Income Accepted
Rental income, cryptocurrency, foreign income, investment returns, and other non-standard sources may be considered.
Recent Credit Events Considered
Some specialized programs may consider recent credit events with compensating factors, subject to lender approval and program availability.
Qualification at a Glance
General Requirements
- Varies by program type (DSCR, bank statement, asset depletion, ITIN, etc.)
- Credit scores from 500+ depending on documentation and LTV
- Down payment from 10–30% depending on risk profile
- DTI evaluated differently based on documentation method
- Reserves required (typically 3–12 months)
- Full appraisal required
Advantages
- ✓ Multiple documentation and qualification methods
- ✓ Available for all property and occupancy types
- ✓ Credit events do not permanently disqualify
- ✓ Entity and LLC vesting available
- ✓ Interest-only options on many programs
- ✓ Competitive within non-QM market
Tradeoffs to Consider
- ↔ Higher rates than conventional and government programs
- ↔ Larger down payments required
- ↔ Higher reserve requirements
- ↔ Prepayment penalties on some programs
- ↔ Not backed by Fannie Mae, Freddie Mac, or government agencies
- ↔ Fewer lenders — specialized broker access helps
Common Scenarios
Investor with 15 Properties
An experienced investor has exceeded conventional financing limits. DSCR and non-QM programs allow continued portfolio expansion with no cap on financed properties.
Buyer 1 Day Out of Bankruptcy
A borrower discharged from Chapter 7 bankruptcy needs housing immediately. Non-QM programs with no-seasoning requirements allow a purchase with 25–30% down.
Foreign National Purchasing U.S. Real Estate
A Canadian citizen wants to buy a vacation home in Florida. Foreign national non-QM programs allow the purchase with passport documentation and international credit references.
Documents Typically Needed
- Varies by program — may include bank statements, asset statements, lease agreements, CPA letters, business licenses, ITIN documentation, or foreign identity documents
- Property appraisal
- Government-issued ID
- Proof of down payment and reserves
Frequently Asked Questions
Yes. Non-QM simply means the loan doesn't meet the CFPB's specific Qualified Mortgage criteria. These are legitimate, regulated loan products offered by licensed lenders with proper underwriting.
Broker Disclosure: Scout Financial Group Inc DBA Airus Lending is a licensed mortgage broker (NMLS #2187418) and does not make loans or credit decisions. Airus Lending works with multiple wholesale lenders to help borrowers compare available loan options. Final approval depends on the lender, automated underwriting findings, documentation, state requirements, and overall borrower profile. Not all applicants will qualify.