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Stacy Flynn & Trisha Richards

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If your income or credit history falls outside the stringent guidelines set by standard mortgage loan programs, a non-QM loan may be worth considering. Non-QM is short for non-qualified mortgage, and understanding how non-QM loans work may help you decide if they’re a worthwhile financing option for you.

Non-QM loans are mortgages that don’t meet the Consumer Financial Protection Bureau’s (CFPB) requirements to be considered qualified mortgages. A qualified mortgage meets the CFPB’s “ability to repay” rule, which requires that lenders vet your finances and set terms on the loan that you’re likely to be able to pay back.

Expanded Prime

The Expanded Prime loan program is ideal for the purchase or refinance of investment properties with higher loan amounts.

Qualifications

Loan Limit up to $3,000,000
Credit Scores as Low as 660
LTV up to 80% on purchase & rate/term refinances

Specifications

30-Year Fixed
Standard Full Doc & Self-Employed Bank Statement Options (12 or 24 Months)
Gift funds and seller concessions allowed
Second Home & Investment Properties Options
DTI up to 50% considered
Asset utilization can be used as income on purchase & rate/term refinances up to 80% LTV
Non-Warrantable condo guidelines will now allow up to 50% commercial space
Bridge loans as an acceptable source of funds

*Terms based on 30 year fixed first lien. 70% LTV. 7.6%% Interest Rate. 7.865% APR. $210,000 Loan Amount with 360 monthly repayment of $1040.00 per month. 700 Credit Score. Disclosed payment does not include PMI, taxes, insurance, or HOA fees. Rates as of February 9, 2023.

Non-Prime

The Non-Prime loan program is designed to allow borrowers with lower credit scores an opportunity to buy an investment property.

Qualifications

Loan Limit up to $1,500,000
Credit Scores as Low as 620
LTV up to 80% on purchase & rate/term refinances

Specifications

30-Year Fixed
Standard Full Doc & Self-Employed Bank Statement Options (12 or 24 Months)
Gift funds and seller concessions allowed
DTI up to 50% considered
1 Year profit and loss statement program

*Terms based on 30 year fixed first lien. 80% LTV. 8.3% Interest Rate. 8.279% APR. $240,000 Loan Amount with 360 monthly repayment of $1803.00 per month. 700 Credit Score. Disclosed payment does not include PMI, taxes, insurance, or HOA fees. Rates as of February 9, 2023.

DSCR Investment

Our Debt Service Coverage Ratio loan program is designed to allow borrowers to qualify using cash-flow from the investment property.

Qualifications

Loan Limit up to $2,000,000
Minimum Credit Score 660
Purchase & Refi LTV up to 80%

Specifications

30-Year Fixed
Ability to vest in name of LLC or corporation
No borrower income or employment information required
Cash-Out solutions to unlock equity for future investments
Debt service coverage ratio must be .75 on purchases with LTVs of 70% or less
Gift funds can be used after borrower has documented 10% minimum down payment of their own funds

*Terms based on 30 year fixed first lien. 75% LTV. 9.6% Interest Rate. 9.986% APR. $225,000 Loan Amount with 360 monthly repayment of $1912.00 per month. 700 Credit Score. Disclosed payment does not include PMI, taxes, insurance, or HOA fees. Rates as of February 9, 2023.