What is a Non-QM loan?
A Non-QM loan is a mortgage that doesn't meet every «Qualified Mortgage» criterion the CFPB defined after 2008 — and the difference is almost always in how income is verified. It isn't a second-tier product: it's a loan that gets underwritten by hand, looking at the borrower's actual ability to repay instead of demanding two years of W-2s and tax returns.
In every other respect it's an ordinary mortgage: 30-year term, amortizing payment, standard title, appraisal and insurance. You can use it for a primary residence, a second home or an investment property, and refinance later once your documentation changes.
Non-QM is not subprime
Subprime lending in 2006 verified nothing. A Non-QM loan verifies everything — just with different documents: bank statements instead of W-2s, liquid assets instead of pay stubs, the property's rent instead of personal income. The Ability-to-Repay rule still applies, and down payments are considerably larger.
The available programs
Non-QM isn't a single product but a family. The work is picking the one your profile qualifies best under.
Bank Statement
Income is calculated from your account deposits with an expense factor applied. Ideal if you write off aggressively and your tax return doesn't reflect what you actually earn.
12 or 24 months of statements
P&L / 1099 Only
A profit and loss statement signed by your CPA, or simply the year's 1099 forms, replaces the tax return as proof of income.
CPA-prepared P&L or 1099s
Asset Depletion
Converts your liquid assets — accounts, investments, retirement funds — into a theoretical monthly income. Built for borrowers with wealth but no salary.
Asset account statements
DSCR
For investment properties: the loan qualifies on the property's rent, not your personal income. No statements and no tax returns required.
Lease or market rent
Foreign National / ITIN
No Social Security number and no U.S. credit history. The file is built with a passport, bank references from your home country and verifiable assets.
Passport and bank references
Recent Credit Event
Recent bankruptcy, foreclosure or short sale. Where a bank demands four years of seasoning, Non-QM programs can fund far sooner.
Letter of explanation and seasoning
Who is it for?
Borrowers with more than enough capacity to pay, turned down by traditional underwriting over a matter of format
Self-employed and business owners
Strong revenue, but every deduction the law allows — so the net income on the tax return locks them out of the bank.
Foreign investors
Buyers from Latin America and Europe with no SSN and no U.S. credit, earning their income outside the country.
Portfolio investors
Already financing several properties and past the loan count conventional credit is willing to accept.
A concrete case
How income is calculated in a bank statement loan
Self-employed contractor in Miami · LLC with 3 years of operation · 720 credit score · No W-2 and a tax return showing low net income
Income calculation
On the tax return this borrower qualified nowhere. On bank statements, DTI lands well below the program limit and the deal closes.
About these numbers
Results are illustrative estimates based on Florida market averages. They are not a credit offer, a pre-approval or a lending commitment. Final terms depend on the lender, the applicant's profile and the property.
How it works
Before pulling your credit, we settle which program fits and what documentation it needs
15-minute profile
Where your income comes from, what documentation exists and which property you have in mind.
Program selection
I compare bank statement, P&L, asset depletion and DSCR, and pick the one you qualify best under.
Term sheet and application
Concrete terms in writing before moving forward. Only then do we pull credit.
Closing in 21-30 days
Manual underwriting, with the file tracked all the way to closing.
Typical Terms
Standard conditions for a Non-QM loan in Florida
Term
30 years
Fixed or interest-only option
Rate
+1 to 2 pts
Over a conventional mortgage
Documentation
12-24 months
Of statements, P&L or assets
About these numbers
Results are illustrative estimates based on Florida market averages. They are not a credit offer, a pre-approval or a lending commitment. Final terms depend on the lender, the applicant's profile and the property.
Frequently Asked Questions
What does «Non-QM» actually mean?
Qualified Mortgage (QM) is the standard the CFPB defined after the 2008 crisis for mortgages that receive automatic legal protection. A Non-QM loan falls outside that template — usually over how income is verified or the debt ratio — but it is still bound by the Ability-to-Repay rule: the lender must show you can pay.
Is the rate much higher?
It typically sits one to two points above a conventional mortgage, depending on program, LTV and credit score. The right comparison isn't against a mortgage you don't qualify for — it's against not buying at all or paying all cash. Many borrowers also refinance into conventional terms once their documentation normalizes.
Do I need to provide tax returns?
In most programs, no. Bank statement uses your statements, asset depletion uses your assets and DSCR uses the property's rent. That's the whole point of the product: the income exists — what doesn't fit is the format it's usually proven with.
Can I apply without a Social Security number?
Yes. Foreign national and ITIN programs are designed for exactly that: the file is built with a passport, a visa where applicable, bank references from your home country and verifiable assets. It's the standard path for Latin American investors buying in Florida.
Can I refinance into a conventional mortgage later?
Yes, and it's a very common exit plan. Once two years of tax returns with declared income exist, or U.S. credit history is established, refinancing into a conventional mortgage is usually straightforward. Not every program carries a prepayment penalty — we verify that before signing.
How much down payment do I need?
As a reference, between 20% and 30% of the property value, depending on program and profile. A larger down payment improves the rate and widens the lender options, so it's worth settling at the pre-qualification stage rather than mid-process.
Is your case a different one?
If the property is an investment or you live outside the United States, there's a more direct route.
Tell me where your income comes from
In a short call we identify which Non-QM program you qualify for and with what documentation. No cost and no credit pull.