Non-Qualified Mortgage

Non-Qualified Mortgage

If your income or credit history falls outside the strict guidelines set by traditional mortgage loan programs, a non-QM loan may be worth considering.

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What's A Non-Qualified Mortgage?

A non-qualified mortgage (non-QM loan) doesn't conform to the consumer protection provisions of the Dodd-Frank Act. However, applicants whose incomes vary monthly or those with other unique circumstances may qualify for these types of mortgages.

For example, a lender may not offer you a qualified mortgage if you have a DTI of more than 43%. Or, if you have erratic income and don't meet the income verification requirements set out in Dodd-Frank and required of most lenders, you may not be offered a qualified mortgage.

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Difficult To Close
Non-QM Loans Are Unregulated
Sub-Prime Borrowers

Difficult To Close

Risk Factor

Non-QM loans are difficult to close and a waste of time.


Non-QM loans can be as easy to close as Agency loans. It all depends on the lender.

Non-QM Loans Are Unregulated

Risk Factor

Non-QM loans are unregulated.


It’s a regulatory requirement that every non-QM borrower provide documentary proof of their ability to repay.

Sub-Prime Borrowers

Risk Factor

Today’s non-QM borrower looks like the sub-prime borrower before the housing crisis.


The average FICO for our non-QM borrowers is 742 versus a score in the 500s back before 2008. With an average down-payment of over 20%, borrowers now have “skin in the game”.

Medical Payments Coverage

Risk Factor

A guest at your annual Fourth of July barbecue trips on the steps between your deck and the lawn fracturing his wrist when he falls against a stone retaining wall.


Medical payments coverage can cover the medical costs if a visitor is hurt on your property, regardless of liability.

Property Coverage

Risk Factor

You’ve lit several candles — which unintentionally start a small fire in your apartment.


Property coverage under your renters policy may help if personal property like a sofa and a bookcase are damaged by fire.

Who benefits from Non-QM loans?

Non-QM loans are convenient for people who have found their dream home but were refused a home loan under qualified-mortgage standards. A non-qualified mortgage may provide an interim lending solution until you meet standard mortgage guidelines and can refinance to a conventional loan.

Non-QM lenders offer options for:

Self-employed borrowers

While standard loan programs need tax documents to prove your self-employed income, non-QM lenders may offer bank statement mortgages without mandating filed tax paperwork.

Borrowers with a high net worth

Some lenders allow you to split the total cash balance in an asset account by a lender-chosen duration and use the result for qualifying income. This is known as an asset depletion loan.

Borrowers investing in multiple rental units

Non-QM loans may be a good option for investors who own more than ten financed investment properties — the limit for most conventional lenders. In addition, other non-QM lenders provide debt-service coverage ratio loans for real estate investors. 

Borrowers with recent bad credit

You may be qualified for a non-QM loan one day after completing a bankruptcy or foreclosure. However, you typically must wait two to seven years after a substantial credit event for standard loan programs.

Borrowers who are foreign nationals

A foreign national is a citizen of another country who lives in the U.S. for short periods for work or vacation. Non-QM loans for foreign nationals may not need proof of U.S. income, credit, or a Social Security number.

Borrowers who want an interest-only payment option

Sporadic income-earners could benefit from an interest-only loan that permits lower payment options during periods of the year when they earn less.

Should I get a Non-QM Loan?

A non-QM is a fine idea when you have the income to make steady, on-time loan payments but cannot get a qualifying mortgage.

Imagine that you own a contracting firm. Some months, your income is high, and others, only a little goes into your bank account. You cannot know precisely how much you will earn yearly. But you don't have trouble paying your bills, your credit score is high, and you have cash in the bank. Even though your finances are healthy, you won't be able to tick the "income verification" box needed for a qualified mortgage. That's where a non-QM comes in.

C2 Financial Corporation

We bring a customized, unique approach to mortgages. Our lending solutions use the perfect hybrid of human-driven insights and technical prowess to process loans faster and significantly reduce costs.


(818) 974-2842



10509 Vista Sorrento Pkwy. #400
San Diego, CA 92121

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