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Non-QM Loans

Last updated: October 2026

If your income is real but your tax return doesn't show it, a Non-QM loan lets the lender measure it another way, from bank statements, 1099s, a CPA-prepared P&L, your assets, or a property's rent. That flexibility costs more, so use it on purpose, with an exit planned.

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Do I qualify?

Key Facts

  • Non-QM (Non-Qualified Mortgage) loans qualify you with alternative documentation instead of tax returns: 12 or 24 months of bank statements, 1099s, a CPA-prepared profit and loss statement, your assets, or a written verification of employment.
  • Randy Mathis, NMLS# 1516760, has access to 100+ lenders through Lumin Lending Inc. and is licensed in 15 states.
  • Scores below 620 may be considered on select programs with lower leverage.
  • On select programs, primary-residence bank statement purchases reach 90% LTV with 740+ credit and loans up to $1,000,000, and loan amounts go up to $3,000,000 on many programs, with larger loans on select programs. Varies by lender and state; subject to credit approval and program guidelines.

What Are Non-QM Loans?

Non-QM (Non-Qualified Mortgage) loans fall outside the CFPB's qualified mortgage rules. They document income differently, and they usually cost more.

For buildings with 5 or more units, see commercial loans; to tap existing equity, a HELOC may fit better.

Who Does a Non-QM Loan Fit?

Sound finances, nonstandard paperwork. These are the files I see most.

  • The business owner with a low taxable income. After write-offs, your tax return shows a fraction of what you earn. A 12- or 24-month bank statement program looks at deposits instead.
  • The 1099 contractor. One or two years of 1099s can document the income.
  • The asset-rich retiree. Modest income, big savings. Asset-based qualifying turns balances into income on select programs.
  • The borrower rebuilding after a credit event. Non-QM waiting periods after bankruptcy or foreclosure run about 12 to 48 months, often shorter than agency loans.
  • The second-home or investment buyer. Select programs go up to 85% LTV on these properties with strong credit.

If your W-2s and tax returns support the purchase, a conventional or FHA loan will almost always cost less. I'll tell you that up front.

How Does Qualifying Work on a Non-QM Loan?

The lender still has to know you can repay. You pick the documents that prove it. Underwriting then checks your credit, debt-to-income, reserves, the property, and your residency against the table below.

Bank Statements

12 or 24 months of personal or business bank statements. Income comes from your deposits, not your tax return. Lenders typically want about 2 years of self-employment, and some require 25%+ ownership of the business.

1099 Income

Independent contractors and gig workers can qualify using 1 or 2 years of 1099s, typically with an expense factor applied instead of a full tax return review.

Profit & Loss (P&L) Only

A CPA-prepared profit and loss statement, up to 85% LTV with 720+ credit on a primary-residence purchase on select programs.

Asset-Based Qualifying

Savings, investment, and retirement balances turned into qualifying income on select programs, up to 80% LTV. A fit for retirees and high-net-worth borrowers with thin documented income.

WVOE (Written Verification of Employment)

Wage earners can qualify with a written verification of employment from the employer. No tax returns. Up to 80% LTV on select programs.

DSCR for Rental Property

For an investment property, qualify on the property's rental income rather than your personal tax returns on most programs. Full details are on the DSCR page.

Real Estate Investors

For a rental, a DSCR loan qualifies the property on its rent rather than your personal tax returns on most programs. Financed-property limits vary by lender.

Hard Money and Bridge Loans

Hard money is short-term, asset-based financing on select programs. It's secured mainly by the property and your plan for it, not your income documents. Bridge loans work the same way.

I use it when speed or the property's condition rules out a standard loan, like a fix-and-flip, a value-add purchase that needs work before it can qualify, or a short closing window. It costs more than long-term financing, so plan the exit before you close, either a sale or a refinance into a DSCR or other long-term loan once the property is stabilized.

Non-QM Program Parameters

Representative figures across the lender guidelines I reviewed.

ParameterWhat to expect
Credit scoreScores below 620 may be considered on select programs with lower leverage; the strongest leverage generally starts around 700 to 740. Varies by lender.
Max LTV, primary purchaseUp to 90% on select bank statement programs with 740+ credit and loans up to $1,000,000. Up to 85% LTV with 720+ credit on a primary-residence purchase on select P&L-only programs. Up to 80% on select asset-based and WVOE programs.
Max LTV, cash-out refinanceUp to 75% on select programs. Cash-out dollar limits vary by lender.
Second homeUp to 85% on select programs; 70% on the most conservative programs.
Investment propertyUp to 85% on a purchase on select programs with 720+ credit and loans up to $1,000,000. Bank statement or full documentation.
Loan sizeUp to $3,000,000 on many programs, with larger loans on select programs. Minimum loan amounts vary by lender, commonly $100,000 to $150,000.
Debt-to-incomeUp to 50% on select programs.
Property typesSingle-family, condos, townhomes, PUDs, and 2-4 unit properties. Non-warrantable condos on select programs.
ReservesTypically 3 to 12 months of payments, depending on loan size.
TermsFixed-rate and interest-only structures are available on select programs; terms vary by program. Interest-only is typically offered with 620 to 700+ credit depending on the lender.
PrepaymentNo single rule. Some programs prohibit prepayment penalties, investment-property programs often allow them, and several states restrict them.
Credit eventsWaiting periods of about 12 to 48 months after bankruptcy or foreclosure, depending on the program, often with a lower max LTV.

Figures aggregated and anonymized across multiple wholesale lender guidelines reviewed in October 2026. Specific limits vary by lender and state and are subject to change. Subject to credit approval and program guidelines; not all borrowers will qualify. Not an offer or commitment to lend.

Non-QM vs Conventional Loans

  • Income documentation

    Non-QM Loans:
    Alternative: bank statements, 1099s, P&L, assets, WVOE, DSCR
    Conventional Loans:
    Full documentation: W-2s, tax returns, pay stubs

  • Minimum credit score

    Non-QM Loans:
    Below 620 may be considered on select programs, with lower leverage
    Conventional Loans:
    No fixed minimum (680+ for strongest rates)

  • Down payment

    Non-QM Loans:
    10-25% typical
    Conventional Loans:
    3-20%

  • Debt-to-income ratio

    Non-QM Loans:
    Up to 50% on select programs
    Conventional Loans:
    Usually capped at 45-50%

  • Interest rates

    Non-QM Loans:
    Higher (above conventional)
    Conventional Loans:
    Lower (market standard)

  • Ideal borrower

    Non-QM Loans:
    Self-employed, investors, retirees with assets, credit events
    Conventional Loans:
    W-2 employees with standard documentation

  • Agency eligibility

    Non-QM Loans:
    Not agency-eligible
    Conventional Loans:
    Sold under conventional guidelines

  • Loan limits

    Non-QM Loans:
    Varies by lender
    Conventional Loans:
    Conforming limits apply (or jumbo)

What to Expect When You Apply

  1. A no-obligation conversation. Tell me how you earn your income and what you want to do. I'll tell you which documentation path fits, or whether a conventional loan is the better call.
  2. Gather your documents. The income documents for your path, a government ID, and statements for your down payment and reserves. Self-employed? Add proof the business exists, like a business license or CPA letter.
  3. Lender match. I place the file with the lender whose guidelines fit. Their underwriter calculates your qualifying income.
  4. Appraisal and conditions. Expect requests to explain large deposits or update a statement.
  5. Closing. You review the closing disclosure with the full terms before you sign.

The Honest Trade-Offs

  • Flexibility costs more. Rates and fees typically run higher than conventional.
  • More of your own money in the deal. Expect 10% to 25% down, with the low end reserved for strong credit and smaller loans.
  • Reserves. Lenders typically want 3 to 12 months of payments in the bank after closing, depending on loan size.
  • Prepayment penalties on some programs. Most common on investment properties; check them before you plan a refinance exit.
  • Less uniformity. Two lenders can treat the same file very differently. That's why I shop it.

Frequently Asked Questions

What is a Non-QM loan?
A Non-QM (Non-Qualified Mortgage) loan is any mortgage that falls outside the Consumer Financial Protection Bureau's qualified mortgage (QM) standards. Instead of tax returns and W-2s, the lender can document your income with bank statements, 1099s, a CPA-prepared profit and loss statement, or your assets.
Can I get a mortgage without tax returns if I'm self-employed?
Yes, on most Non-QM programs. Bank statement programs qualify you with 12 or 24 months of personal or business bank statements instead of tax returns. You can also use 1 or 2 years of 1099s, a CPA-prepared profit and loss statement on select programs, or your assets. Expect the lender to want roughly 2 years of self-employment history. Some programs require you to own at least 25% of the business.
Do Non-QM loans have higher interest rates?
Generally yes. Non-QM rates typically run higher than conventional loans because of the added flexibility. I judge it by what the loan does for you and how soon your tax returns could support a conventional refinance. I quote rates personally once I see your full scenario.
How much do I need to put down on a Non-QM loan?
Plan on 10% to 25% down for most scenarios. The 10% end is for strong files. Bank statement programs reach 90% LTV on select programs for a primary-residence purchase with 740+ credit and a loan up to $1,000,000. P&L-only programs reach up to 85% LTV with 720+ credit on a primary-residence purchase on select programs. Asset-based programs reach up to 80% LTV on select programs. Second homes and investment properties often need more equity. Lower credit, a larger loan, or a recent credit event tend to push the down payment up. Varies by lender.
What credit score do I need for a Non-QM loan?
Scores below 620 may be considered on select programs with lower leverage. The strongest leverage generally starts around 700 to 740. Your score sets your maximum LTV, your loan size limit, and whether interest-only is available. A 620 file and a 760 file can need very different down payments on the same program. Tell me your score and I'll tell you which programs fit. Subject to credit approval and program guidelines; not all borrowers will qualify.
How soon after a bankruptcy or foreclosure can I get a Non-QM loan?
Sooner than most people expect, though not overnight. A past bankruptcy or foreclosure doesn't automatically disqualify you on Non-QM programs. Waiting periods vary by program, from about 12 to 48 months. The shorter waits usually come with a lower maximum LTV, which means a bigger down payment. Agency loans typically ask for a longer wait, so Non-QM can be your way back to owning. Send me the discharge or completion date and I'll check which waiting periods you already meet.
More questions (6)
Can I get a home loan with only 1099 income?
Yes. 1099 contractors can qualify with 1 or 2 years of 1099s on Non-QM programs across my lender network, without a full tax return review. The lender typically applies an expense factor to your 1099 income instead of reading every deduction on your Schedule C. That's why this path often shows a higher qualifying income than your tax return. You'll still need a credit report, statements for your down payment and reserves, and proof the income is ongoing, like current-year payments from the same clients.
Can I qualify for a mortgage using my assets instead of income?
On select programs, yes. Asset-based qualifying (also called asset utilization or asset depletion) turns liquid assets like savings, brokerage accounts, and retirement funds into a qualifying income figure. It reaches up to 80% LTV on select programs. It fits retirees and high-net-worth borrowers whose documented income is thin next to their balance sheet. Lenders differ on which accounts count and how much must remain after closing, so I check the guidelines for your scenario before you move any money.
Are Non-QM loans safe?
They're legitimate, regulated loans made by licensed lenders. A Non-QM loan on a home you live in still has to meet the federal ability-to-repay rule. Business-purpose investor loans, such as DSCR, follow each lender's own guidelines. The trade-off is usually higher rates or fees.
What types of Non-QM loans are available?
Besides the paths above, Non-QM covers foreign national loans, ITIN loans, and hard money or bridge financing. Each has its own documentation, credit, and LTV limits. Availability varies by lender and by state.
Can I refinance out of a Non-QM loan into a conventional loan later?
Often, yes, and I plan for it on day one. Plenty of self-employed borrowers buy now with Non-QM, then refinance into a conventional loan once their tax returns support the income. Check prepayment before you sign. Prepayment penalties vary by program and by state. They're more common on investment-property loans, and some programs prohibit them entirely. If your exit is a refinance, I structure for it up front so you know the math on the way out.
Can a non-permanent resident or ITIN holder get a Non-QM loan?
Non-permanent residents with a valid visa and U.S. credit may qualify on select programs, with a maximum LTV of 75% to 80% depending on the program. ITIN lending is available on select programs, up to 85% LTV on a purchase with strong credit. Foreign national financing is available on select programs for second homes and investment properties (never a primary residence), often qualified on rental income. These vary a lot by lender, so I need your visa or ITIN status, credit history, and the property type first.

Related Loan Programs

DSCR / Investor loans

Rentals and investment properties, qualified on the property.

Learn more

Commercial

Multifamily, mixed-use, and commercial property, reviewed case by case.

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Conventional

Standard financing for a primary, second home, or investment property.

Learn more

Learn More

DSCR Loans Explained

How real estate investors qualify based on rental income, not tax returns.

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Bank Statement Loans Guide

How self-employed borrowers use bank deposits instead of tax returns to qualify.

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Self-Employed Mortgage Guide

Complete guide to mortgage options for business owners and 1099 workers.

Read article

Tell Me How You Earn

Send me your income picture and what you want to buy. I'll show you which Non-QM path fits and what it will take.

Find your optionsBook a call

Or call (949) 990-6030

Rates and program availability may vary based on the state or region in which the financed property is located. This is not a credit decision, an offer, or a commitment to lend. Program restrictions apply.

Randy Mathis NMLS# 1516760 | DRE# 02236644 | Lumin Lending Inc. NMLS# 2716106 | DRE# 02291443. Equal Housing Opportunity.