What Are Non-QM Loans?

Aug 03, 2022

With many borrowers today not having traditional 9-5 jobs, qualifying for a government-backed or traditional loan can prove to be more difficult. With non-qualified mortgages (non-QM loans), the American dream is within reach for Americans with more specialized circumstances.  

Non-QM Loans Explained 

Non-QM loans are those not backed by government agencies such as FHA, VA, Fannie Mae, Freddie Mac or Ginne Mae. These loans are not overseen by the Consumer Financial Protection Bureau (CFPB) and don’t require the same type of income verification that government-backed or qualified mortgages do.  

Without those traditional forms of income verification though, how does a lender ensure that they’ve done their due diligence to properly qualify a borrower? Good question!  

  • Lenders can review personal or business bank statements to determine income for self-employed borrowers or others without traditional W-2 forms. 
  • For freelancers or independent contractors, 1099 tax forms are acceptable forms of income documentation for some non-QM loans. 
  • Small business owners can take advantage of non-QM loans by submitting their profit & loss statements prepared by a CPA or PTIN. 
  • Non-income sources like stocks, cash or retirement accounts can be taken into consideration for some non-QM loans. 

Convinced that a non-QM loan may be the loan for you? Reach out to one of our qualified loan originators today to get started.  

 

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