Bank statement loans, DSCR loans, P&L loans, and asset-based lending — for self-employed borrowers and real estate investors who don't fit the standard mold.
A Non-QM (non-qualified mortgage) loan is any loan that does not meet the Consumer Financial Protection Bureau's (CFPB) definition of a "qualified mortgage." QM loans require standard income documentation (W-2s, tax returns), strict DTI limits, and other guidelines designed for traditional W-2 employees.
Non-QM loans use alternative documentation methods to verify a borrower's ability to repay. They are not subprime loans — they are designed for creditworthy borrowers whose income structure doesn't fit the standard W-2 mold.
Who Non-QM is designed for
Tony AI
Tony will walk you through your Non-QM scenario and show estimated options — no commitment, no credit pull.
Start my personalized rate in 60 secondsBank statement loans allow self-employed borrowers to qualify using 12 or 24 months of personal or business bank statements instead of tax returns. Because many self-employed borrowers show lower taxable income due to legitimate business deductions, their tax returns don't accurately reflect their actual cash flow.
How income is calculated
Personal bank statements
100% of deposits are counted as income. 12 or 24 months averaged.
Business bank statements
Deposits are reduced by an expense factor (typically 50%) to approximate net income. 12 or 24 months averaged.
Minimum requirements (typical)
2+ years self-employed, 620+ credit score, 10%–20% down payment depending on loan amount.
DSCR loans qualify the borrower based on the rental income of the investment property — not the borrower's personal income. The property must generate enough rent to cover the mortgage payment (principal, interest, taxes, insurance, and HOA).
DSCR formula
DSCR = Monthly Rent ÷ Monthly PITIA
PITIA = Principal + Interest + Taxes + Insurance + HOA
DSCR loans are ideal for real estate investors who own multiple properties and don't want each new acquisition to be limited by their personal income. No personal income documentation is required — the property qualifies itself.
Tony AI
Tony will walk you through your Non-QM scenario and show estimated options — no commitment, no credit pull.
Start my personalized rate in 60 secondsP&L loans use a CPA-prepared or accountant-prepared profit and loss statement to document income — without requiring full tax returns. This is useful for business owners whose tax returns show significant deductions but whose actual business profitability is strong.
CPA preparation required
Most lenders require the P&L to be prepared and signed by a licensed CPA or tax professional. Self-prepared P&L statements are generally not accepted.
Asset-based loans (also called asset depletion or asset dissipation loans) allow high-net-worth borrowers to qualify using their liquid assets instead of income. The lender divides the total eligible assets by the loan term to calculate a monthly income equivalent.
Example calculation
Non-QM loans are available to a wide range of borrowers. General requirements vary by program, but common guidelines include:
| Program | Min. Credit | Min. Down | Key Requirement |
|---|---|---|---|
| Bank Statement (12mo) | 620+ | 10% | 2yr self-employed |
| Bank Statement (24mo) | 600+ | 15% | 2yr self-employed |
| DSCR | 620+ | 20% | DSCR ≥ 1.0 |
| P&L Only | 640+ | 20% | CPA-prepared P&L |
| Asset-Based | 680+ | 20% | Liquid assets ≥ loan amount |
| Foreign National | N/A | 25%–30% | Valid passport + visa |
Tony AI
Tony will walk you through your Non-QM scenario and show estimated options — no commitment, no credit pull.
Start my personalized rate in 60 seconds