Non-QM Lending Mortgage Guidelines For Homebuyers


This ARTICLE On Non-QM Lending Mortgage Guidelines For Homebuyers Was PUBLISHED On December 20th, 2019

Non-QM Lending
Gustan Cho Associates

NON-QM mortgage lending has come back in full swing.

  • As agencies are tightening their guidelines, we are seeing more and more NON-QM loan products come out they can help thousands of Americans obtain a mortgage
  • In this blog, we will detail what a NON-QM mortgage loan means, some of the specialty NON-QM programs, and how to complete a NON-QM mortgage loan at Gustan Cho Associates

In this article, we will cover and discuss Non-QM Lending Mortgage Guidelines For Homebuyers.

What Are Non-QM Lending Mortgage Loans

What is a NON-QM loan?

  • A NON-QM mortgage loan simply means non-qualified mortgage
  • A QM MORTGAGE is anything overseen by our federal government, such as FHA, VA, USDA, FANNIE MAE, and FREDDIE MAC
  • All of those agency’s guidelines are overseen with the input from our federal government
  • With a NON-QM mortgage, it is up to the lender to create their own guidelines for qualifications
  • These guidelines are in line with agency guidelines but have their niches
  • Since NON-QM firms are lending their own money, they can make up their own lending rules

Now that you understand what a NON-QM mortgage loan is, let’s talk about instances where they are useful.

Non-QM Lending Mortgage Guidelines For Self-Employed Borrowers

What could be the guidelines for a non-QM mortgage for self-employed borrowers

NON-QM Bank statement loans:

  • Using a bank statement loan is a strong tool for many self-employed borrowers
  • If you are self-employed you will know the ongoing struggles when it is time to file your tax returns
  • Most individuals who are self-employed would utilize strategic tax write-offs to help their overall financial picture
  • As many self-employed borrowers have learned, these write-offs can hurt you when it comes time to apply for a mortgage
  • Your CPA will know more about structuring your tax returns in a way to qualify for a mortgage
  • However, if you are not getting the qualifications you need based off your tax returns, a bank statement mortgage is a great alternative
  • You may utilize 12 months or even 24 months of a business or personal bank account to calculate income
  • The underwriter will verify all business-related deposits and come up with a monthly average that will be utilized to qualify you for the mortgage
  • The general rule of thumb, they will use 50% of your deposits as monthly income
  • The other 50% is assumed to be expenses for your business
  • This is a great loan program because tax returns are not required

That’s right, they do not even need to be sent in to qualify. If you are having trouble qualifying for a loan with your tax returns. Please reach out to us today.

Non-QM Lending Mortgage Guidelines For Homebuyers With Bad Credit

NON-QM Loans after derogatory credit events:

  • NON-QM mortgage loans are also available for individuals who may have had a derogatory credit item in the recent past
  • In fact, you can be one day out of foreclosure and still qualify for a NON-QM mortgage loan
  • The closer you are to a derogatory credit event the higher your interest rate will be
  • A NON-QM mortgage will also work for late payments in the past few years
  • A standard mortgage usually will not allow mortgage late payments within the past 12 months
  • NON-QM mortgages are a great option if you do have late payments

This is a great tool to stay away from making a landlord rich and continue to be a homeowner.

Non-QM Lending With One Year Tax Returns

Which loans without QM with an annual tax refund

NON-QM ONE-year self-employed tax returns:

  • Agencies for qualified mortgages require a two-year history of tax returns for qualifications
  • There are instances where Freddie Mac will only require one year
  • However, those are few and far between
  • The general rule of thumb is you need two years of tax returns and a mortgage lender will average your income over that two-year period
  • If your income is decreasing, they will use a 12-month average
  • If your income is increasing, they will add the past two years on average those together

NON-QM offers a one-year average loan program. The most recent years of tax returns will be used. If you have a strong year with your business, it is a great opportunity to buy a home.

Qualifying For Non-QM Loans With A Lender That Can Help

The majority of mortgage lenders do not participate in NON-QM mortgage lending. The good news is we do, and we are experts in the NON-QM lending field. Applying for a NON-QM mortgage is not any different than applying for a regular mortgage. Depending on the loan program you choose will determine the documentation we need.

See a breakdown below:


  • Last 60 Days Bank Statements – to source down payment
  • Last Two Years W2’S
  • Last 30 Days Pay Stubs
  • Last Two Years Tax Returns (all pages)
  • Driver’s License

Bank Statement Loans For Self-Employed Mortgage Borrowers

What are Bank Statement Loans For Self-Employed Mortgage Borrowers

Self-employed borrowers can now qualify for bank statement mortgage loans with no income tax required. There are no maximum loan limit cap on self-employed bank statement mortgages.


  • Last 12- OR 24-Months Bank Statements – to source down payment and calculate income
  • Driver’s License

One Year Income Tax Return Non-QM Mortgage Programs


  • Last 60 Days Bank Statements – to source down payment
  • Last Years W2’S
  • Last Years Tax Return (all pages)
  • Driver’s License

Once we have the required documentation, you will reach out to Mike Gracz on 630-659-7644. You and Mike will have a one on one mortgage consultation. We will figure out which loan program is the best for you based on your qualifications. From there either Mike or one of the highly skilled loan officers on the Gustan Cho team will send you a mortgage application link. Once that link is complete, it authorizes Loan Cabin to verify your credit report. Your credit score, as well as the income and asset documentation, will determine your prequalifications.

We encourage you to reach out to us for any NON-QM mortgage needs. We are the experts. As stated above, we do many NON-QM mortgage loans and take care of our clients when it is time to refinance out of that mortgage loan. We are available seven days a week to answer any mortgage questions you or your family may have. You can reach out directly to Mike Gracz, 630-659-7644 or send an email to Owning a home and obtaining a mortgage can seem overwhelming, we will do our best to make this process go as smoothly as possible and get you into your dream home!

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