Traditional mortgages backed by organizations like Fannie Mae and Freddie Mac, or government programs like FHA, VA, and USDA, have specific requirements related to income, credit, and job stability. But what do homebuyers do if they don’t meet these criteria?
Non-Qualified Mortgage loans (Non-QM loans) can be the solution.
What is a Non-QM loan?
Non-QM loans are mortgages that offer their own set of criteria, often including more flexible income and credit requirements. These fall outside traditional criteria set by the Consumer Financial Protection Bureau (CFPB) and therefore cannot be backed by Fannie Mae, Freddie Mac, or government institutions. In exchange for expanded qualification opportunities, borrowers may need to pay a higher interest rate or make a larger down payment.
Non-Qualified Mortgage loans are designed for anyhome purchaseorrefinancethat doesn’t fit traditional guidelines. By going beyond the norm, we can help more people achieve their homeownership goals.
That includes self-employed borrowers, real estate investors, homebuyers without a Social Security number, people who recently went through a credit event, and so many more!
Flexible mortgage solutions designed for borrowers who fall outside traditional lending guidelines.
Bank Statement Loan
Allows borrowers to qualify for financing using only their bank statement deposits.
DSCR Loan (Investor Cash Flow)
Real estate investors can use their rental income to qualify for financing.
ITIN Loan
Gives borrowers without a Social Security number a way to qualify for home financing.
1099 Loan
A way for self-employed borrowers to qualify using 1099 income.
Foreign National Loan
Buyers living abroad can finance a vacation home or investment property in the U.S.
Asset Qualifier Loan
High-net-worth borrowers can qualify for financing solely using their assets.
Full Doc Loan
A financing solution that goes beyond traditional guidelines; used for unique situations.
P&L Loan
A solution for business owners to qualify using their professionally prepared P&L statements
WVOE Loan
Qualifies buyers using only a written verification of employment
Non-QM pros and cons
Understanding the advantages and trade-offs of Non-QM loans can help you decide if this flexible financing solution fits your situation.
Pros:
Flexible mortgage solutions designed for borrowers who fall outside traditional lending guidelines.
Retirees
Real estate investors
Self-employed or “gig” workers
Borrowers with a high debt-to-income ratio
Borrowers with blemishes on their credit history
Alternative documentation makes these opportunities possible.
The CFPB maintains standards for determining a borrower’s ability to repay a home loan. Typically, the following documents are used to determine if you meet requirements:
W-2s
Bank statements
Pay stubs
Tax returns
But Non-QM loans allow you to qualify outside of these typical terms using alternative documentation; like 1099s, P&L, WVOE, bank statements, and rental income.
Cons:
Since Non-QM loans don’t follow traditional guidelines, they cannot be purchased by Fannie Mae or Freddie Mac or backed by government agencies like the FHA or USDA.
This means lenders take on all the risk when issuing a Non-QM loan. To cover this risk, Non-QM loans often come with higher interest rates compared to conventional loans, which can increase your monthly payment.
Non-QM loans can also come with loan periods that exceed 30 years. While this may benefit some borrowers, it keeps you locked into your mortgage for a longer period and increases the total amount you pay for your home.
Non-QM loan requirements
The exact criteria for a Non-QM loan will vary by the program. But in most cases, Non-QM loans will offer greater financial flexibility than traditional loans.
Credit History: Even if your credit score is fair or poor, you can still meet the requirements for a Non-QM loan. Most Non-QM loans allow borrowers with a credit score of 620 to qualify, while some open the door to homeownership for individuals with credit scores as low as 500.
Debt-to-income ratio: For a conventional loan, borrowers are expected to have a debt-to-income ratio of 43% or lower. But Non-QM loans are available for individuals with a debt-to-income ratio of 50% or even higher – providing loan options to those whose debts might otherwise prevent them from achieving their homeownership dreams.
How to get a Non-QM loan
From consultation to closing, here’s what to expect when applying for Non-QM financing.
Talk to a CCM loan officer
Our loan officers have experience and expertise in Non-QM loans and will be happy to help determine which one is right for you.
Complete a loan application
At CCM, we offer a convenient online application, or you can contact our loan officers directly to help start the process.
Get approved to lock in your interest rate
We’ll help you determine if you meet the requirements for a Non-QM loan and, if you do, start a streamlined approval process that allows you to lock in an interest rate for the duration of your loan.
Receive your loan and close your home
We’ll help you set up convenient monthly payments according to your repayment schedule so you can move in with peace of mind.
Trusted by Homebuyers Across Utah
Hear directly from clients who experienced a smooth, supportive mortgage journey.
Who should consider a Non-QM loan?
What’s the difference between non-conforming and Non-QM?
Are Non-QM loans bad?
Are Non-QM loans safe?
Are jumbo loans Non-QM loans?
Are Non-QM loans conventional?
Ready to Explore Your Options?
Take the first step toward achieving your financial goals—apply now to get started!
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With over 20 years of experience, Rodrigo Ballon, backed by CrossCountry Mortgage, provides trusted mortgage solutions for homebuyers, investors, and refinancers across Utah and beyond — delivering competitive rates, clear guidance, and personalized service every step of the way.
