Traditional and Non-QM Mortgage Loan Programs

This article will cover traditional and non-QM mortgage programs for homebuyers and homeowners. The historically low mortgage rates fueling a booming housing market seemed like yesterday. There are more homebuyers than an inventory of homes despite rates nearing 7%. Due to the competition, many homebuyers were buying homes at higher than the list price.

Due to the new traditional and non-QM mortgage loan programs in the market, there is an abundance of qualified homebuyers that have been pre-approved.

Gustan Cho Associates offers non-QM loans one day out of bankruptcy or foreclosure with a 30% down payment. Self-employed and business owners no longer have to worry about not being able to qualify for a mortgage due to not declaring sufficient adjusted gross income on their tax returns. This article will discuss and cover the various traditional and non-QM mortgage loan programs available.

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The Strong Housing Market Despite High Inflation

The housing market has not slowed since the start of the coronavirus outbreak in February 2020. The demand for housing outnumbers the inventory of housing. This is the main reason for skyrocketing home prices. Loan officers at Gustan Cho Associates have borrowers who were pre-approved before the coronavirus outbreak in February 2020 and are still looking for a home. They have been shopping for homes for close to 18 months.

It is no doubt a seller’s market. Home sellers are getting multiple offers. Homes are not staying in the market long. Most homes will go under contract in a matter of days to a couple of weeks.

Most buyers are buying homes over list price. Inflation is soaring. Buying a home will be a great hedge against inflation. People realize mortgage rates will be going up. Whatever the economy brings or the political unrest among the Democrats and Republicans, the housing market seems unaffected. Gustan Cho Associates has launched several traditional and non-QM mortgage loan programs, which we will discuss in the following paragraphs.

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Non-QM Mortgage Loan Options For 2024

Gustan Cho Associates is a mortgage company licensed in multiple states with a national reputation for being able to do loans other mortgage lenders cannot do. Gustan Cho Associates has zero lender overlays on government and conventional loans. The factor that makes Gustan Cho Associates different than other lenders is we are mortgage bankers and correspondent lenders and can broker mortgage loans to wholesale lenders.

Gustan Cho Associates has over dozen lending partnerships with non-QM wholesale lenders. If there is a loan program in the market, you can be rest assured Gustan Cho Associates has it and can offer it.

Non-QM and specialty mortgage loan programs have abruptly stopped once the coronavirus outbreak in early 2020. However, non-QM lenders have slowly returned. Better yet, many alternative loan programs, such as non-doc home loans for primary residential homes, made a comeback. We will be discussing the various new updated traditional and non-QM mortgage loan programs that are now available in the following paragraphs.

Differece Between Traditional and Non-QM Loan Programs

Traditional and Non-QM (Non-Qualified Mortgage) loan programs are two distinct categories within the mortgage lending market, each catering to different borrower profiles and financial situations. Many renters who have not planned on buying a home are meeting their loan officers to get qualified and get pre-approved so they can start shopping for a mortgage. The housing shortage and demand of buyers are expected to continue through 2025.

Traditional Mortgage Loan Programs

Conventional mortgage loans adhere to the standards set by government-sponsored entities like Fannie Mae and Freddie Mac, meet the criteria for being insured by government agencies like the Federal Housing Administration (FHA), and are guaranteed by the Department of Veterans Affairs (VA). Traditional mortgage loan programs typically require borrowers to meet specific criteria related to credit score, income, debt-to-income ratio, and down payment.

What Are Traditional Mortgage Loan Programs

Examples of traditional mortgage loan programs include:

Conventional fixed-rate mortgages
Conventional adjustable-rate mortgages
FHA loans
VA loans
USDA loans

Non-QM Mortgage Loan Programs

Non-QM loans meet different standards than traditional mortgages, often because they fall outside of the guidelines established by Fannie Mae, Freddie Mac, FHA, VA, or other government agencies. Non-QM loans are often tailored to borrowers who may need to meet the strict requirements of traditional mortgage programs, such as self-employed individuals, those with non-traditional income sources, or those with less-than-perfect credit. Non-QM loans may offer more flexible qualification criteria, including lower credit score requirements or higher debt-to-income ratios.

What Are Non-QM Mortgage Loan Programs

Examples of non-QM mortgage loan programs include:

Bank statement loans (for self-employed borrowers)
Asset-based loans
Interest-only loans
Jumbo loans (loans exceeding the conforming loan limits set by Fannie Mae and Freddie Mac)
Alternative documentation loans (for borrowers with non-traditional income sources)

Borrowers must understand the differences between traditional and non-QM mortgage loan programs and carefully evaluate which option best suits their financial situation, goals, and risk tolerance. Additionally, borrowers should work closely with mortgage lenders or brokers who can guide and assist in navigating the mortgage application process and selecting the most suitable loan program.

Non-QM No-Income Verification Mortgage Loan Options

As America and the global markets recover from the COVID-19 coronavirus outbreak, many traditional and non-QM mortgage loan programs return in full force. Gustan Cho Associates are mortgage experts who can offer more mortgage loan programs than most banks, and other traditional financial institutions do not offer.

Gustan Cho Associates has a national reputation for not having LENDER OVERLAYS on any of our qualified mortgage programs (QM MORTGAGE).

We strive to please our clients and viewers of our newsletter and blogs so we are always on top of the new loan programs being launched in today’s marketplace. As mentioned, we are mortgage bankers, correspondent lenders, and brokers. We can broker alternative financing loan programs. We want to keep our reputation of being able to offer loans other lenders cannot.

The Suspense and Return of Non-QM Mortgages

In March 2020, we saw the mortgage markets start to panic. Lenders started to tighten their credit criteria and credit score overlays. Most NON-QM mortgage lending companies quit the business or suspended their loan programs until further notice. Numerous NON-QM mortgage outlets are now out of business.

Many NON-QM borrowers are self-employed individuals who took a major hit during the COVID-19 coronavirus outbreak, especially early on.

With what seemed to be nationwide lockdowns and local government restrictions on what Americans could and could not do. We saw many loan programs simply disappear. These programs included construction to permanent mortgage loans for doctors (and other professionals requiring additional schooling). As the weeks and months passed, non-QM and alternative loan programs returned. Many mortgage lenders even launched new loan programs.

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Traditional 90% LTV Jumbo Mortgages

Gustan Cho Associates has launched a traditional jumbo mortgage loan program requiring only a 10% down payment. The 90% LTV Jumbo Mortgage Loan Program only requires a 660 credit score. The debt-to-income ratio is capped at 50% DTI.

The 10% down payment jumbo loan program has become a very popular loan program at Gustan Cho Associates. Most jumbo loan programs require a 20% to 30% down payment.

Our 90% LTV jumbo loan program is a traditional mortgage program with full documentation requirements and easier lending guidelines. Gustan Cho Associates offers non-QM jumbo loans with credit scores down to 500 FICO. We also offer bank statement loans for self-employed borrowers with no income tax returns required.

Bank Statement Loans With No Income Tax Returns are Required

BANK STATEMENT LOANS and many loans created for investment properties. If you have been following the news, you know numerous changes throughout the mortgage market since the start of the COVID-19 coronavirus outbreak. Fannie Mae and Freddie Mac have changed their agency guidelines multiple times over this time frame.

This is to protect the American people and prevent a future housing bubble. Now that COVID-19 coronavirus outbreak vaccines are available we are starting to see the economy rebound.

Homebuyers with bankruptcy or foreclosure no longer have to wait for the three to seven-year waiting period after bankruptcy or a housing event thanks to non-QM loans. Although turmoil is predicted shortly, many mortgage programs are starting to come back out. Specifically, we would like to highlight the programs available for doctors and medical professionals, as this program just became available again!

Doctor and Medical Professional Mortgage Loans

$0 down payment jumbo loan program for doctors! That’s right. Loan programs are available for doctors with a zero-dollar down payment, even in the jumbo mortgage market. Many ask what a doctoral program is. It’s a unique program in which flexible guidelines qualify borrowers beginning a specialized profession, such as a doctor or a dentist. There are many doctor acronyms.

M.D. – Doctor of Medicine
D.O. – Doctor of Osteopathic Medicine
O.D. – Doctor of Optometry
D.P.M. – Doctor of Podiatric Medicine
D.D.S.- Doctor of Dental Surgery
D.M.D. – Doctor of Medicine in Dentistry
D.C. – Doctor of Chiropractic

These individuals may qualify for the doctor loan program. Why are these mortgage programs special? These doctor programs have the ability to exclude student loan debt from your debt to income ratio. It is no secret that medical professionals generally accumulate large student loan debt, which can make it difficult to qualify for a mortgage loan.

Physician and Dentists Mortgage Loan Programs

These programs allow up to 100% loan-to-value mortgage financing in most states. These loan programs do not have borrower-paid mortgage insurance. The mortgage insurance premiums are not paid out every month but are included in your qualifying interest rate. What really sets this program apart is the ability to qualify based on future income. Many doctors start with lower income thresholds and then maximize their earning potential a few years into their career. The doctor and medical professional mortgage loans allow medical professionals to purchase a home based on future income, which can greatly increase buying power!

Contact us to apply for physician and dentists mortgage loan programs

No-Doc Home Loans

No-doc home loans for primary homes is a new loan program launched at Gustan Cho Associates. 20% down payment and a minimum credit score of 640 FICO are required. Reserves are required on no-doc home loans. No income tax returns are needed. Only bank statements are required to determine the ability to repay their new mortgage.

Renovation Loan Programs

Renovation lending is still on hold with numerous lenders across the nation.Gustan Cho Associates can still offer FHA 203K, Freddie Mac CHOICE Renovation, and Fannie Mae HomeStyle mortgage loans. In today’s crazy market, renovating a home at the time of purchase or as a refinance is incredibly profitable. The current housing market is booming. It is next to impossible to buy a house in many areas of the country.

Many buyers are forced to settle on a less than desirable property just to get into the housing market. A renovation loan will allow these borrowers to update the property to fit their needs.

While renovation lending does not allow luxury upgrades such as installing a pool or a hot tub, it does permit many value-increasing renovations. Most clients use renovation mortgage lending to update kitchens and bathrooms or add a bedroom. As many readers may know, renovating a kitchen king costs over $30,000. Renovation mortgage lending can be your opportunity to make your dream home possible. For more questions surrounding renovation lending, please call Alex at 262-716-8151 or email alex@gustancho.com.

Comparison of Traditional and Non-QM Mortgage Loan Programs

NON-QM mortgage lending is back in full swing. Some programs are still unavailable, such as the true 5% jumbo program, but we’ve seen relaxed guidelines nationwide. Many bank statement mortgage loans disappeared completely at the start of the COVID-19 coronavirus lockdowns. They have slowly rolled back out. When bank statement mortgages were available again, most required a 30% down payment.

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Updated Bank Statement Mortgage Loans

Bank statement mortgage loans are now back to a 10% down payment minimum. This is helping thousands of borrowers nationwide get into the housing market. If you are a self-employed borrower who takes write-offs when filing your taxes to the IRS, you will want to contact Gustan Cho Associates for information on bank statement loans. We are experts in the NON-QM mortgage realm.

It is exciting when we see mortgage programs roll back out. Well, things may never get back to pre-pandemic guidelines, we are moving in the right direction.

There were talks of Fannie Mae and Freddie Mac once again becoming privatized. Since the pandemic hit, talks of privatization seemed to stop. Many lenders are offering programs specific to certain borrowers, such as new doctors. We have also seen guidelines loosening surrounding student loan debt. These are all steps in the right direction. Owning a home is still the American dream, and Gustan Cho Associates can be the mortgage team that makes this dream possible.

Best Mortgage Lenders For Bad Credit With No Overlays

We encourage you to check out our reviews and contact us today. We are available for any mortgage-related questions seven days a week and even on holidays. You can reach Alex directly at 262-716-8151. We would love to look at your application even if another lender has turned you down. Thousands of Americans are dealing with lender overlays and not true mortgage guidelines. We look forward to hearing from you and your family. Please call us to start your mortgage application today!

FAQs about Traditional and Non-QM Mortgage Loan Programs

1. What are traditional mortgage loan programs? Traditional mortgage loan programs adhere to the standards set by government-sponsored entities like Fannie Mae and Freddie Mac, are insured by government agencies like the Federal Housing Administration (FHA), and are guaranteed by the Department of Veterans Affairs (VA).
2. What are examples of traditional mortgage loan programs? Examples of traditional mortgage loan programs include conventional fixed-rate mortgages, conventional adjustable-rate mortgages, FHA loans, VA loans, and USDA loans.
3. What are non-QM mortgage loan programs? Non-QM (Non-Qualified Mortgage) loans meet standards different from traditional mortgages, often because they fall outside of the guidelines established by government entities. These loans are often tailored to borrowers needing more flexible qualification criteria, such as self-employed individuals, those with non-traditional income sources, or those with less-than-perfect credit.
4. What are examples of non-QM mortgage loan programs? Examples of non-QM mortgage loan programs include bank statement loans for self-employed borrowers, asset-based loans, interest-only loans, jumbo loans exceeding conforming loan limits, and alternative documentation loans for borrowers with non-traditional income sources.
5. What’s the difference between traditional and non-QM mortgage loan programs? Traditional mortgage loan programs adhere to strict criteria set by government-sponsored entities or agencies. In contrast, non-QM mortgage loan programs offer more flexibility in qualification criteria, catering to borrowers who may not meet traditional mortgage standards.
6. How can borrowers evaluate which mortgage program is best for them? Borrowers should carefully assess their financial situation, goals, and risk tolerance to determine whether a traditional or non-QM mortgage program is most suitable for them. You can receive guidance on selecting the most suitable loan program by consulting with mortgage lenders or brokers.
7. Are there specific mortgage programs available for certain professions? Yes, specialized mortgage programs are available for certain professions, such as doctors and medical professionals. Programs like these may provide distinct advantages, such as excluding student loan debt from the debt-to-income ratio and qualifying individuals based on their future income.
8. How can borrowers with bad credit or unique financial situations find mortgage options? Non-QM mortgage loan programs can be an option for borrowers with bad credit or unique financial situations. These programs often come with more flexible credit score requirements and qualification criteria. Working with mortgage lenders experienced in alternative financing options can help borrowers find suitable mortgage solutions.
9. Are there mortgage options available for self-employed individuals who don’t have traditional income documentation? Yes, bank statement loans are available for self-employed individuals who need traditional income documentation, such as tax returns. These loans typically require bank statements to verify income and may offer more flexible qualification criteria.
10. How can borrowers get started with applying for mortgage loans? Borrowers can start by contacting mortgage lenders or brokers who offer traditional and non-QM mortgage loan programs. They can guide the application process and assist borrowers in selecting the most appropriate loan program for their needs.