2021 Updated Non-QM Mortgages And Alternative Financing Programs

Gustan Cho Associates
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This Article Is About 2021 Updated Non-QM Mortgages And Alternative Financing Programs

2021 Updated Non-QM Mortgages And Alternative Financing Programs are in full force.

  • Non-QM loans have become increasingly popular prior to the coronavirus outbreak in February 2020
  • However, once the pandemic hit the United States, all non-QM wholesale mortgage lenders suspended their operations.
  • This included borrowers who got conditional loan approvals as well as clear to close
  • In March 2020, all non-QM loans were suspended from origination, processing, underwriting, and closing until further notice
  • Liquidity issues on the secondary mortgage markets were a major concern
  • However, there are a handful of non-QM wholesale lenders that re-opened operations
  • Not all non-QM wholesale lenders have the same lending requirements
  • Lending requirements for non-QM loans are different
  • Gustan Cho Associates has wholesale lending partnerships with almost every single non-QM wholesale lender

If there is a non-QM and/or alternative financing mortgage program in the marketplace, GCA Mortgage Group has it.

2021 Updated Non-QM Mortgages And Alternative Financing Programs Look Promising

Non-QM during covid

After the coronavirus outbreak hit the nation, many non-QM lenders went out of business within weeks of the pandemic. Others permanently closed their doors.

  • Non-QM loans were the hottest mortgage loan program prior to the COVID-19 pandemic
  • Non-QM mortgages are not hard money loans
  • They are portfolio loans with competitive mortgage rates
  • Non-QM loans are a great alternative mortgage loan program for borrowers who cannot qualify for government and conventional loans
  • Non-QM and other alternative mortgage programs are portfolio loans and have no set uniform guidelines like government and conventional loans
  • Borrowers who are shopping for non-QM loans will need to ask for the lender’s eligibility requirements depending on the mortgage program

In this article, we will discuss and cover the 2021 Updated Non-QM Mortgages And Alternative Financing Programs.

Non-QM Bank Statement Mortgages For Self-Employed Borrowers

bank statement loan

12 and 24-month bank statement mortgages are for self-employed borrowers and/or business owners.

  • Federal income tax returns are not required
  • Non-QM wholesale mortgage lenders will average the past 12 months of bank statement deposits
  • The average monthly deposit over the past 12 months is the income used for the borrower
  • Withdrawals do not matter
  • There are two different types of bank statement mortgages
  • The 12-month and 24-month bank statement mortgage loan program
  • The 12-month bank statement mortgage program requires a 20% down payment or 80% loan-to-value
  • For borrowers who want to put less than a 20% down payment or higher than an 80% loan-to-value, then they may want to consider the 24-month bank statement mortgage program
  • Gustan Cho Associates offers rate and term non-QM refinance at 90% loan-to-value with a 720 credit score
  • Homeowners can do an 80% loan-to-value cash-out refinance with a 740 credit score with non-QM loans

There is no maximum loan limit on non-QM loans. There is no private mortgage insurance required on non-QM loans.

Investor Series Non-QM Mortgages: Debt Service Coverage

Debt Service Coverage during covid

Gustan Cho Associates is affiliated with dozens of non-QM wholesale lending partnerships. GCA Mortgage Group has a national reputation for being a one-stop mortgage shop for having not just government and conventional loans with no lender overlays but having dozens of non-QM loan programs. If there is a non-QM mortgage program in today’s marketplace, Gustan Cho Associates probably already has it:

  • No limit on the number of financed properties
  • However, our non-QM wholesale investor will only finance $5 million in aggregate dollar amount
  • Any aggregate loan size higher than the $5 million aggregate dollar amount will be evaluated on a case by case scenario
  • Investor products do not require landlord/rental history
  • Vested as LLC or Corporation is acceptable
  • Purchase
  • Rate and Term Refinance up to 80% LTV with 720 credit scores
  • Cash-out refinance up to 75% LTV with 720 credit score
  • Must meet 115% of rental income to PITIA in qualifying

Non-QM and alternative mortgage loan programs are for owner-occupant, second homes, and investment property financing.

Full Doc Non-QM Mortgages Up To $4 Million Loan Amounts

Full Doc Non-QM loan

Full Doc Non-QM Mortgages:

  • 1 year of income documentation for full doc programs
  • Purchases
  • Rate and Term Refinance up to 90% LTV with 720 scores
  • Cash-out refinance up to 80% LTV with 700 credit score

Near Prime Jumbo Mortgages:

  • Purchase
  • Rate and Term 740 credit score up to 90% LTV up to $1.5 million dollar loan amount
  • 700 credit score up to 90% loan-to-value up to $1 million dollar loan amount
  • 40% DTI at 90% LTV
  • 43% debt to income ratio up to 85% loan-to-value or less
  • 80% LTV or less 6 mths reserves
  • 80-85%  loan-to-value require 9 months reserves 
  • 86-90%  loan-to-value require 12 months of reserves
  • For every additional finance property, 6 months of reserves for each other financed property

2021 Updated Non-QM Mortgages: Asset-Depletion Loans

Asset-Depletion Loans during COVID

Asset Depletion Loan Program:

  • 90 days seasoned, 100% of the value, divided by 60 months for monthly income
  • Purchase
  • Rate and Term Refinance at 80% LTV with a 680 credit score
  • Cash-out refinance up to 75% LTV with a 720  credit score
  • Must have 110% in assets of the loan amount plus reserve requirements
  • Gifts are not allowed on this mortgage loan program

Fannie Mae only – C1 conventional Agency:

  • Minimum 620 credit score
  • Must have approved findings
  • No manual underwriting
  • 95% maximum loan-to-value

Cash-out transaction cashback can be used toward 3 of the 6 months of reserves requirement, except E1:

  • 10-year Interest-Only period available (40-year total term)
  • NO credit event in the last 24 months
  • If the borrower had a credit event in the past 24-48 months, then the maximum loan-to-value is lowered to 65% LTV, and the reserve requirements are increased by 6 months
  • Non-Warrantable Condos up to 85%
  • Condotels up to 70% LTV
  • 100% gift allowed on primary home mortgage loans
  • Gift allowed on investment  property financing with the borrower putting down 5% of own funds
  • 6  months of reserves on  up to a maximum of $2 million loan amount
  • Over $2 million loan amounts require 12 months of reserves
  • 1X30 on mortgage from last 6 to 12 months
  • 0X30 for most previous 6 months
  • Up to 50% DTI, except E1 max 40-43% and C1 whatever approved eligible findings per automated underwriting system (AUS) allow
  • Transferred appraisals accepted

The minimum loan amount is $100k min loan amount. The maximum loan amount is $4,000,000. Loan amounts greater than $4 million dollars can be done in a case by case scenario.

Non-QM Mortgages One Day Out Of Foreclosure And Bankruptcy

One Day Out Of Foreclosure And Bankruptcy

Prior to the coronavirus outbreak hit the nation back in February 2020, most non-QM wholesale lenders did not have any waiting period requirements after bankruptcy and/or a housing event. However, after non-QM wholesale lenders reopened their operations, many non-QM wholesale lenders have implemented new waiting period requirements after bankruptcy, foreclosure, deed in lieu of foreclosure, short sale. However, Gustan Cho Associates has non-QM wholesale lenders that do not have any waiting period requirements after bankruptcy and/or a housing event.  The 2021 housing market is expected to be stronger than in 2020 with no correction in sight. Non-QM loans are great alternative financing solutions for owner-occupant, second homes, and investment property mortgage loans.

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