When tax returns don’t tell the story, there are other ways to document it.
“Non-QM” means a loan outside the federal Qualified Mortgage definition. It isn’t subprime by another name: these programs still verify ability to repay, but with bank statements, assets, or property cash flow instead of tax returns. They cost more. For the right borrower they’re the difference between buying and not.
- Are self-employed and write off most of your income
- Earn 1099 or commission income that returns understate
- Have substantial assets but modest taxable income
- Are a foreign national or file with an ITIN
- Had a credit event more recently than agency waiting periods allow
Six ways to document income, compared.
| Program | Who it fits | How income is shown | Typical terms | Watch for |
|---|---|---|---|---|
| Bank statement | Self-employed 2+ years | 12 or 24 months of personal or business statements; deposits less an expense factor | 10–20% down; 660+ credit common | Large irregular deposits need sourcing; expense factor can be 50% for some business types |
| 1099 income | Independent contractors, commissioned salespeople | One or two years of 1099s, sometimes with YTD earnings statement | Similar to bank statement | Declining income year over year is a problem |
| Profit & loss | Business owners with a CPA-prepared P&L | 12–24 month P&L, sometimes with a few months of statements to support it | Larger down payments common | Investor rules on who may prepare the P&L |
| Asset qualification | Retirees, high-net-worth, recently sold a business | Liquid assets divided over a set term (asset depletion) or assets covering the loan plus reserves | Often 20%+ down | Retirement accounts may be discounted; formulas vary |
| ITIN | Borrowers without a Social Security number who file taxes with an ITIN | Full docs or bank statements, depending on investor | 15–20%+ down; primary residences most common | Fewer investors; higher rates |
| Foreign national | Non-resident buyers of U.S. property | Foreign income letter or statements, foreign credit references | 25–30%+ down; often second homes or investment | Reserves, visa/entry documentation, currency conversion |
Investor guidelines differ widely and change often. Availability and exact terms through Jared’s lender to be confirmed before launch. For rental property qualified on the property’s own cash flow, see DSCR loans, which are a distinct category.
What you give up for flexibility.
Non-QM is a tool with a price tag. Jared’s job is to tell you whether a conventional path exists first.
Expect a higher rate than agency loans and sometimes higher origination costs. The gap narrows with larger down payments and stronger credit.
10% is the floor for the best bank-statement profiles; 20% or more is common. Several months of reserves are typical.
Common on investment-property Non-QM loans, usually for 1 to 5 years. Prohibited on most primary-residence loans. Read the note.
Twelve to twenty-four months of statements, every page, with deposits explained. “Stated income” as it existed before 2008 does not exist.
Many borrowers use Non-QM to buy now and refinance into conventional once two years of returns support it. Build that into the plan.
Non-warrantable condos, condotels, and unusual properties often only fit here, which is a reason some strong borrowers end up in Non-QM.
Is Non-QM the same as subprime?
Can I get a 30-year fixed?
How is bank statement income calculated?
Can I refinance out later?
Describe how you’re paid. Jared will tell you which documentation route fits.
If a conventional path exists, he’ll say so first.
- No credit pull, no obligation
- Not an application; no guarantee of approval or terms
- Rather talk? Call or text 954-649-0020
Complicated income isn’t a no. It’s a different conversation.
Jared can map your situation to the documentation that works.