Best for Business owners, 1099 contractors, gig workers, investors and high-net-worth buyers who do not fit the W-2 mold.
If you own a business, you already know the problem: the same deductions that lower your tax bill also lower the income a conventional lender is allowed to count. A Non-QM loan solves that. "Non-qualified" simply means the loan sits outside the federal Qualified Mortgage rules that require tax-return income — it is still a fully underwritten, fully regulated mortgage from a licensed lender.
Instead of two years of tax returns, we document your income the way your business actually produces it. The most common paths are 12 or 24 months of business or personal bank statements, a profit-and-loss statement prepared by your CPA, 12–24 months of 1099s, or an asset-depletion calculation that turns liquid assets into qualifying income. For rental property, a DSCR loan qualifies on the property's rent rather than your personal income at all.
Non-QM rates are typically somewhat higher than conventional and down payments start around 10%, so we always run the numbers both ways. Plenty of business owners still qualify conventionally once we look closely at the returns — and when they do not, this is the program that gets the deal done.
Highlights
- Bank statement loans: qualify on 12 or 24 months of deposits — no tax returns
- P&L loans: a CPA-prepared profit-and-loss statement documents income
- 1099 loans: for contractors and gig workers with 12–24 months of 1099 income
- Asset depletion: turn liquid assets and retirement accounts into qualifying income
- DSCR loans: investment property qualifies on its rental income, no personal DTI
- Down payments from about 10%; credit scores from the low-to-mid 600s
- Primary, second-home and investment properties; jumbo loan amounts available
Things to consider
- Rates are generally higher than conventional or government loans
- Most programs want two years of self-employment (one year with strong history is sometimes allowed)
- Larger down payment and cash reserves are typically required
- Fewer federal consumer protections apply than with a Qualified Mortgage — we walk through the terms with you line by line
Program descriptions are general and for education only. Guidelines, limits and eligibility change; your mortgage advisor will confirm what applies to you. Not a commitment to lend.