Non-QM loans are designed for borrowers who don’t fit the typical criteria for conventional loans. This might include self-employed individuals, real estate investors, those with recent credit issues or irregular income, foreign nationals, or those seeking larger loan amounts.

QM loans follow strict guidelines set by the government to ensure borrowers have the ability to repay their loans. Non-QM loans, on the other hand, don’t adhere to these guidelines. They offer more flexibility regarding income verification, credit history, debt-to-income ratio, and property types.

• Flexibility: Non-QM loans offer flexible guidelines regarding income verification and credit history.
• Interest Rates: Rates might be higher than traditional loans due to the increased risk associated with non-standard borrowers.
• Higher Debt-to-Income Ratios: They may allow higher debt-to-income ratios compared to conventional loans.
• Unique Property Types: Non-QM loans might finance properties that don’t meet standard loan requirements, like investment properties or unique homes.

Qualification criteria for Non-QM loans vary among lenders, but generally, borrowers must demonstrate their ability to repay the loan through alternative means, such as bank statements, asset depletion, or other non-traditional documentation. A lender specializing in Non-QM loans can guide you through the specific requirements.