Loans for Borrowers Who Do Not Fit the Standard Box
Non-QM means the loan sits outside the federal Qualified Mortgage rules. That is a regulatory classification, not a judgment about you. These are fully underwritten loans with verified ability to repay — we just verify it a different way.
This is not subprime lending. Subprime described a specific category of pre-2008 loans made without meaningful verification. Non-QM loans are documented and underwritten. What changes is the method, not the rigor.
At a glance
- Minimum credit
- 640
- Down payment
- 10% owner-occupied
- Timeline
- 21 to 30 days
- Routes
- 3
Scope. Owner-occupied Non-QM is available in California only. The business-purpose routes below — DSCR and no-ratio DSCR — are brokered nationwide. Investor and business-purpose lending nationwide. Owner-occupied home loans in California.See the three routes
The three routes, and which one fits
Each of these is a full page. The income method is what changes; everything else is underwritten normally.
Income from your business
| If this describes you | Start here |
|---|---|
| Your deposits show the real business and your tax return does not. | Bank Statement Loans — for the self-employed borrower whose deposits show the real business and whose tax return does not. A preliminary analysis of your statements is available before you formally apply. |
| Your accounts tell the story more clearly than deposits do. | Profit & Loss Loans — for the business owner whose accounts tell the story more clearly than deposits do, including a self-prepared route that most lenders do not offer. |
Income from the property
| If this describes you | Start here |
|---|---|
| The rental income from the property itself carries the file. | DSCR Loans — for investment property. DSCR is both a Non-QM income method and an investor program, which is why it appears under both — one page, one product, two ways in. Business purpose, brokered nationwide. |
Beyond the three routes, the sub-programs we place are bank statement, profit-and-loss, DSCR, no-ratio, foreign national, ITIN, asset depletion and 1099-only.
Who this fits
You are self-employed and your tax returns understate what you actually earn
You have had a bankruptcy, foreclosure, or short sale, have recovered, and conventional guidelines still say wait
You are a foreign national, or you do not have traditional U.S. credit history
You are retired with substantial assets but modest monthly income
You have several businesses or entities and your file is too complex for a volume lender
You are a 1099 contractor or you earn on commission and your income varies
Who this does not fit
You qualify conventionally. If your W-2 income and clean returns support the loan, conventional costs less. We check that first and tell you when it is the better route — see Full Documentation.
You cannot document income by any method. Non-QM is alternative documentation, not no documentation. There has to be something verifiable — deposits, a profit-and-loss statement, assets, or rental income.
You want owner-occupied financing outside California. Consumer mortgage lending is licensed state by state and this license is a California license.
How qualification works
Pick the income method that reflects your actual situation. From there the file is underwritten the normal way — credit, reserves, loan-to-value, property type and condition.
Pick the income method
- Bank statementDeposits over a set period, with an expense factor applied to allow for business costsBank Statement Loans
- Profit and lossA profit-and-loss statement for your business, covering a set periodProfit & Loss Loans
- DSCRThe rental income from the property itself. Your personal income is not used at allDSCR Loans
Then the file is underwritten normally
- Credit starts at
- 640
- Down payment starts at
- 10%
- Loan-to-value goes up to
- 90%owner-occupied80%investment property
- Seasoning after a credit event
- 2 years
- Foreign national and ITIN borrowers
- Yes, both.
owner-occupied
Sooner than conventional guidelines allow
The honest trade-offs
What it opens
Non-QM costs more than conventional and asks for a larger down payment. In exchange, it serves borrowers conventional lending simply turns away, and it covers primary residences — which DSCR and hard money do not.
- Down payment starts at
- 10% owner-occupied
What it still asks of you
One thing worth setting expectations on: "alternative documentation" does not mean less paperwork. A two-year bank statement analysis is more work for you than handing over a W-2, not less. Underwriting also takes longer, and there are fewer lenders in this space, so a file that gets declined late has fewer places to go. That is the reason to structure it correctly the first time.
- Typical timeline
- 21 to 30 days
Process and timeline
Typically 21 to 30 days, and complex self-employed files can run longer. Timelines are typical, never promised.
Before you spend anything on an appraisal
Scenario analysis
How your income is actually earned, and which of the three methods reflects it best.
Lender analysis
Non-QM lenders differ from one another far more than conventional lenders do. Placed from a panel of 20+.
Application to closing
- Application
- Documents for the chosen method
- Appraisal
- Underwriting
- Closing
Application, documents for the chosen method, appraisal, underwriting, closing.
Typical timeline21 to 30 days
Frequently Asked Questions
What does Non-QM mean?
The loan falls outside the federal Qualified Mortgage rules. It is a regulatory classification, not a judgment about you or your creditworthiness.
Is this a subprime loan?
No. Subprime described pre-2008 loans made without meaningful verification of anything. Non-QM loans are fully underwritten with verified ability to repay. What changes is the method of verification, not the rigor.
Why can't I just get a normal loan?
Usually you can, and we check that first. Non-QM exists for the cases where conventional underwriting produces the wrong answer — self-employment, a past credit event, a complex entity structure, or income that is real but does not fit the standard form.
How will you verify my income?
Through whichever method fits: bank deposits, a profit-and-loss statement, the property's rental income, or your assets. The sub-programs we place are bank statement, profit-and-loss, DSCR, no-ratio, foreign national, ITIN, asset depletion and 1099-only.
Will I need tax returns?
Generally not on bank statement, profit-and-loss, or DSCR programs.
What credit score do I need?
640.
How much down payment?
10% owner-occupied — more than conventional.
How much can I borrow against the value?
90% of value on owner-occupied, 80% on investment property.
How long after a bankruptcy, foreclosure, or short sale can I qualify?
Sooner than conventional guidelines allow — 2 years. This is one of the clearest advantages of the category.
Can I use it for the home I live in?
Yes, in California. Unlike DSCR and hard money, Non-QM covers owner-occupied property.
Can I use it outside California?
For the business-purpose routes — DSCR and no-ratio DSCR — yes, nationwide. Owner-occupied Non-QM is California only.
Can I refinance into a conventional loan later?
Often, once your profile supports it — two more years of returns, a credit event further behind you. Check for a prepayment penalty first, because that can make an early exit expensive.
Is there a prepayment penalty?
On some programs, particularly investment property. We will tell you which applies before you commit.
Is it more expensive than conventional?
Yes. You are paying for access to underwriting that will actually look at your situation.
Is it less paperwork?
Honestly, no. "Alternative documentation" means different documents, not fewer. Two years of bank statements is more work for you than handing over a W-2. We would rather set that expectation now than have you frustrated at week three.
Do you work with foreign nationals or ITIN borrowers?
Yes, both.
How long does it take?
Typically 21 to 30 days, and complex self-employed files can run longer.
What if I get declined?
There are fewer lenders in this space than in conventional, so we would rather structure the file correctly the first time than shop it around after a decline. That is most of what we do for you here.
Do you fund these yourselves?
No. We are a brokered business and place the file with the lender whose program fits it.
What happens next
Choose the evidence
If your deposits show the business better than your return does.
If your accounts tell it more clearly than your deposits do.
You are here
Non-QM Loans
Documented differently, not documented less.
Choose the property
If the property is an investment and its rent can carry the file.
The whole business-purpose family, brokered nationwide.
Worth checking first if your returns do support the payment.
Request a Scenario Analysis
Tell us how your income is actually earned. We will tell you which of the three routes reflects it, and whether conventional would serve you better.
Nothing on this page or website constitutes an offer of credit, a rate quote, or a commitment to lend. All loans are arranged through third-party lenders and are subject to full application, credit approval, income/asset verification, property appraisal, and underwriting. Terms and availability are subject to change without notice. Loankey.io is a licensed real estate broker; loans are arranged, not made. Investor and business-purpose lending nationwide. Owner-occupied home loans in California.