Self-employed? Investor? Retired? We specialize in creative Non-QM loans that work when traditional financing doesn’t. Find your path forward today.
Non-QM Loans: Flexible Mortgage Solutions for Unique Borrowers
Non-QM loans (Non-Qualified Mortgages) are home loans for people who don’t fit traditional rules. They help self-employed borrowers, investors, retirees, and others qualify using alternative documents like bank statements, rental income, or assets. These loans are regulated programs designed to make smart approvals possible when conventional loans say no. Back to top
Not every financial profile fits a checkbox. If your income, credit, or documentation is outside conventional limits, Non-QM loans offer a practical, common-sense path to purchase or refinance. The JD.Mortgage team at Paramount Residential Mortgage Group, Inc. structures Non-QM financing across 49 states (excluding NY) including DSCR loans, ITIN loans, Bank Statement loans, and Asset Depletion loans. Connect with a Non-QM expert
What Is a Non-QM Loan?
A Non-QM loan is a mortgage that doesn’t meet the CFPB’s technical definition of a “Qualified Mortgage.” That label doesn’t make it risky; it just means the underwriting allows alternative ways to document ability-to-repay. Instead of forcing every borrower through the same W-2 and tax-return funnel, Non-QM programs consider real cash flow, verifiable assets, or a property’s rent. Review options now
Who Should Consider a Non-QM Loan?
- Self-employed owners, freelancers, or contractors with strong cash flow but complex tax returns
- Real estate investors qualifying based on property income (including short-term rentals in some cases)
- Foreign nationals or ITIN holders purchasing U.S. property
- Retirees and asset-rich borrowers using savings and investments to qualify
- Borrowers with recent credit events who still demonstrate the ability to repay
If your profile doesn’t fit conventional guidelines but your numbers make sense, Non-QM can unlock the door. Ask a Non-QM question
How Non-QM Compares to Conventional, FHA, and VA
Conventional loans prefer W-2 income, standardized DTI caps, and seasoned credit. FHA offers flexible credit standards but still follows strict documentation rules. VA is a powerhouse for eligible veterans and service members with no MI and flexible residual-income tests. Non-QM isn’t a downgrade; it’s a different lane that trades tighter documentation for broader approval pathways, often at higher rates and down payments. Compare loan options
Popular Non-QM Loan Types
DSCR Loans (Debt-Service Coverage Ratio)
DSCR loans qualify investors on property cash flow instead of personal income. Lenders calculate a ratio of gross rent to the proposed housing payment; if the rent covers the payment (or meets a target, sometimes 1.0–1.25x), approval may be possible. Great for investors scaling portfolios without handing over tax returns. See DSCR details
ITIN Loans
ITIN loans allow borrowers without a Social Security number to buy or refinance using an Individual Taxpayer Identification Number, alternative credit, and verifiable funds. These programs can work for primary, second home, or investment properties depending on the lender’s matrix. Explore ITIN lending
Bank Statement Loans
Bank Statement loans use 12–24 months of personal or business bank statements to calculate qualifying income. Ideal for entrepreneurs, gig workers, and commission-based professionals whose tax returns understate true cash flow. Check bank statement requirements
Asset Depletion (Asset Utilization) Loans
Asset Depletion loans convert liquid assets into an income-equivalent to meet ability-to-repay. Perfect for retirees or asset-rich clients with limited monthly income. Learn asset-based qualification
Eligibility & Documentation: What Lenders Look For
Credit: Non-QM programs accept a range of scores, but pricing improves with stronger credit and deeper reserves. Some programs allow recent credit events with specified waiting periods or compensating factors. Back to top
Income: Alternative documentation replaces W-2s. That could be bank statements, CPA letters, profit-and-loss statements, asset statements, or DSCR cash-flow tests. The goal is to substantiate a stable, realistic path to repay. Discuss your documents
Down payment & reserves: Expect 10–20% down for many Non-QM products and meaningful cash reserves depending on risk layering. Investors or complex scenarios may require more. Run payment scenarios
Rates, Costs, and Terms
Non-QM rates are usually higher than conventional/agency loans because underwriting is more customized and risk tolerance differs. Points and fees vary by product, loan amount, and LTV. Many products have interest-only options, second-home and investment eligibility, and varied prepayment terms. We map costs against your short- and medium-term plans so you’re not paying for features you won’t use. Request a side-by-side comparison
Common Misconceptions About Non-QM
“Non-QM equals subprime.” No. Non-QM is fully regulated and requires documented ability-to-repay. It’s about flexible documentation, not ignoring math. Back to top
“I’ll be stuck in a high rate forever.” Not necessarily. Many borrowers use Non-QM as a bridge until tax returns or credit seasoning support a lower-cost refinance. See refinance paths
“Only investors use Non-QM.” Investors love DSCR, but self-employed buyers, retirees, and ITIN borrowers use Non-QM every day. Browse programs
The Process: Step-by-Step
- Strategy call: We identify the best lane (DSCR, ITIN, Bank Statement, Asset Depletion) based on goals and timeline. Schedule a quick consult
- Document collection: Bank statements, asset statements, lease/rent data, identification, and credit authorization as applicable. Back to top
- Pre-qualification structure: We run numbers and outline rate/down payment/reserves under different scenarios.
- Conditional approval: Underwriting reviews your file using the chosen documentation path.
- Appraisal/title/insurance: Standard collateral and compliance steps.
- Clear to close: Final conditions cleared, closing scheduled, funds disbursed.
You get transparent checkpoints and proactive communication from first call to funding. See the full mortgage process
Use Cases & Real-World Scenarios
Self-employed buyer with write-offs: Healthy revenue but low taxable income? Bank Statement qualification measures actual deposits to show real cash flow. Learn more
Investor scaling a portfolio: DSCR financing evaluates the property’s rent relative to the payment, enabling growth without personal income calculus. Explore DSCR
Retiree with strong assets: Asset Depletion converts investable funds into qualifying income. See how it qualifies
ITIN borrower: Establish credit alternatives, document funds, and purchase primary or investment property depending on program. ITIN details
Frequently Asked Questions
Are Non-QM loans safe?
Yes. They require documented ability-to-repay and follow federal and investor guidelines. Back to top
Do Non-QM loans have higher rates?
Usually higher than agency loans, reflecting more flexible underwriting. The tradeoff is access to financing now, with a potential refinance later. Refinance overview
What down payment will I need?
Commonly 10–20%, sometimes more for complex files, condos, or higher-risk profiles. Ask about minimums
Can I do interest-only?
Many Non-QM programs offer interest-only terms; suitability depends on goals and exit strategy. Back to top
Is PMI required?
Private mortgage insurance depends on LTV and product. Many Non-QM products price risk via rate and points rather than monthly MI. Compare structures
Will I need reserves?
Typically yes, especially for investors and higher LTVs. Reserves improve pricing and approval strength. Estimate payments
Do you lend in all states?
We serve 49 states, excluding New York. Back to top
Can I use Non-QM to refinance?
Yes. Cash-out and rate/term options exist across multiple Non-QM product lines. See refinance options
How fast can we close?
Turn times vary with documentation type and appraisal timelines, but Non-QM can be competitive with conventional when documents are complete. Discuss timing
What if I have a recent bankruptcy or foreclosure?
Waiting periods can be shorter than agency loans, depending on the program and compensating factors. Back to top
Are short-term rentals allowed?
Some DSCR programs allow STR income; guidelines vary by investor and market. Ask about STR eligibility
What counts as “alternative credit” for ITIN?
Examples include utility histories, rental verifications, or other on-time payment records when traditional credit is thin. See ITIN documentation
Why Work with the JD.Mortgage Team?
We’re a hybrid lender-broker platform with deep Non-QM expertise, so we can structure files across multiple investors and products to fit your scenario. You get fast, candid guidance and a clear line from pre-qualification to closing. Start a custom plan
Your Next Step
A brief conversation can determine which Non-QM lane fits best and how to optimize your approval. You don’t have to force your finances into a box that was never built for you. Back to top
Explore All Your Loan Options
Non-QM is one part of a complete menu. Explore VA, FHA, Conventional, USDA, Down Payment Assistance, Jumbo, HELOCs, Second Mortgages, Reverse Mortgages, and Construction Loans. For purchases and refis, visit Home Purchase, Refinance, or review the Mortgage Process. Contact the JD.Mortgage team