The Non-QM FAQ: 12 Questions, Answered

1. What does "Non-QM" mean?

Non-QM stands for non-qualified mortgage — a loan that doesn't fit the Consumer Financial Protection Bureau's "qualified mortgage" definition, usually because it uses alternative documentation (rental income, bank statements, assets) instead of the standard W-2/tax-return package. "Non-QM" describes the documentation flexibility, not the loan's legitimacy: these are full, regulated mortgage products from real lenders and investors.

2. Who is a Non-QM loan actually for?

Four profiles cover most Non-QM borrowers: real estate investors (DSCR), self-employed and 1099 earners (bank statement), asset-rich borrowers with little documented income (asset depletion), and borrowers who need speed (bridge/hard money). The common thread: conventional guidelines misprice their risk.

3. Do I need tax returns for a Non-QM loan?

For most Non-QM programs — DSCR, bank statement, 1099, asset depletion — no. That's the core value proposition. Some programs may still ask for returns in edge cases, but the flagship products are designed to work without them. Guidelines vary by program and are subject to change.

4. What credit score do I need?

Our Flexible Advantage program allows a minimum 550 credit score under its program guidelines, using bank statements or 1099s. Other programs set their own minimums, and terms generally improve with stronger credit. Minimums vary by program and are subject to change.

5. How much down payment is typical?

It varies widely: investment-property DSCR loans often start around 20–25% down, while some bank-statement programs for primary residences go lower. More down generally means better pricing and easier approval. We'll quote your exact scenario.

6. How fast can a Non-QM loan close?

About 14–21 days is typical for a complete purchase file, since there's no employer verification or IRS transcript pull. Bridge loans can move faster; complex files take longer. Anything a lender promises in 48 hours deserves scrutiny.

7. Are Non-QM interest rates higher?

Typically, yes — flexible underwriting carries a premium over conventional rates. How much higher depends on the program, your credit, down payment, and property type. We don't publish specific rates because they move constantly; ask us for current pricing on your scenario.

8. Can I refinance with a Non-QM loan?

Yes — rate-and-term refinances and cash-out refinances are standard across DSCR, bank statement, and asset-utilization programs. Investors frequently use DSCR cash-out to fund the next acquisition.

9. What property types are eligible?

Single-family homes, condos, townhomes, and 2–4 unit properties are the bread and butter. Many programs also cover condotels on a restricted basis, mixed-use, and larger multifamily — eligibility is program-specific, so describe your property when you check eligibility.

10. Can I close in an LLC or corporation?

Many DSCR and investor-focused programs allow entity vesting, which conventional loans generally don't. Personal guarantees are still typical. If asset protection matters to you, tell us upfront so we match an entity-friendly program.

11. Do Non-QM loans have prepayment penalties?

Some do, some don't. Investor products (especially DSCR) commonly offer a menu: lower rate with a prepayment penalty, or higher rate without one. Know your hold timeline before choosing — and ask us to quote both.

12. How do I start?

Sixty seconds: check your eligibility or call 949-241-9489 (NMLS #7861). A NonQM Rates specialist reviews your scenario and matches you to the right program — usually the same business day. No obligation, no hard credit pull to start.