Non Qualified Mortgage(QM) Loans: Solutions Beyond Limits
Non Qualified Mortgage(QM) loans cater to borrowers with unique financial situations, such as high-income earners or those purchasing luxury properties. These loans exceed the limits of Qualified Mortgage loans and are not purchased by Fannie Mae or Freddie Mac.
Bank Statement Loan
Description: Uses 12–24 months of personal or business bank statements instead of W-2s or tax returns to qualify income.
Best For: Self-employed borrowers, freelancers, business owners.
Key Benefit: No need to show traditional income docs—great for those with strong cash flow but complex or write-off-heavy tax returns.
DSCR Loan (Debt-Service Coverage Ratio)
Description: Qualifies investment property loans based on the property’s income, not the borrower’s personal income.
Best For: Real estate investors.
Key Benefit: Fast, documentation-light financing for rental properties—great for building or scaling a portfolio.
Asset Depletion Loan
Description: Uses one or two years of 1099 forms to verify income instead of full tax returns.
Best For: Independent contractors, gig workers (e.g., Uber drivers, sales reps).
Key Benefit: Easier income qualification for those who work on commission or as contractors.
1099-Only Loan
Description: Uses one or two years of 1099 forms to verify income instead of full tax returns.
Best For: Independent contractors, gig workers (e.g., Uber drivers, sales reps).
Key Benefit: Easier income qualification for those who work on commission or as contractors.
ITIN Loan
Description: Available to borrowers with an Individual Taxpayer Identification Number (instead of a Social Security Number).
Best For: Foreign nationals, undocumented immigrants who file U.S. taxes.
Key Benefit: Provides a path to homeownership for creditworthy individuals without legal residency or SSN.
Interest-Only Loan
Description: Allows the borrower to pay only interest for a set initial period (usually 5–10 years), before converting to full amortization.
Best For: High-income earners with fluctuating cash flow, or short-term property holders.
Key Benefit: Lower initial monthly payments and flexibility with cash flow or investment planning.
Recent Credit Event Loan
Description: Designed for borrowers who have had a recent bankruptcy, foreclosure, short sale, or major derogatory credit event.
Best For: Borrowers rebounding from credit hardship.
Key Benefit: Short waiting periods (as little as 1 day from discharge) compared to traditional mortgage guidelines.
Foreign National Loan
Description: Offers mortgage financing for non-U.S. citizens who don’t live or work in the U.S.
Best For: International investors purchasing U.S. real estate.
Key Benefit: Doesn’t require U.S. credit or income—focuses on foreign assets and credit.
No Ratio Loan
Description: Does not consider debt-to-income (DTI) ratio at all.
Best For: Borrowers with high assets or net worth but inconsistent income.
Key Benefit: Offers flexibility when income can't be easily documented but assets and credit are strong.
P&L Only Loan
Description: Uses a CPA-prepared Profit & Loss statement to document income (often with minimal or no additional bank statement support).
Best For: Self-employed borrowers with good financials but limited documentation.
Key Benefit: Simpler paperwork—especially for established businesses with clean books.