When Traditional Doesn’t Fit, We Have Options
Not every borrower fits neatly into the strict guidelines of traditional mortgage loans. If you’re self-employed, rely on commissions, have irregular income, or experienced a recent credit event, getting approved for a conventional loan can be a frustrating process. That’s where Non-QM loans come in.
At Clear Mortgage, we specialize in offering smart, alternative lending solutions for real-world borrowers. Our Non-QM (Non-Qualified Mortgage) loan programs are designed for people whose financial stories don’t align with standard lending requirements — but who are more than qualified to own a home.
What Are Non-QM Loan ?
Flexible, Alternative-Documentation Loans Beyond QM Rules
Non-QM loans are mortgage loans that don’t meet the strict criteria set by the Consumer Financial Protection Bureau for “qualified mortgages.”
However, that doesn’t mean they are risky or unreliable. In fact, Non-QM loans are built around flexibility, using alternative ways to evaluate a borrower’s ability to repay the loan.
Unlike conventional loans, Non-QM options don’t require W-2s or tax returns to qualify. Instead, lenders can review bank statements, asset documentation, or other financial indicators to verify your income and creditworthiness.
Who Are Non-QM Loans Designed For?
Ideal Borrowers: Self-Employed, Investors, and More
Non-QM loans are ideal for:
- Self-employed individuals and business owners
- Freelancers and independent contractors
- Real estate investors and landlords
- Retirees with high assets but low monthly income
- Borrowers with recent bankruptcies or credit issues
- Foreign nationals investing in U.S. property
If you’ve been turned down by traditional lenders but have the means to repay a mortgage, Non-QM lending might be the solution you’ve been waiting for.
Key Benefits of Non-QM Loans
Bank Statement Qualification
No tax returns? No problem. Many Non-QM programs allow income verification through 12 to 24 months of personal or business bank statements — perfect for entrepreneurs or freelancers with variable income.
Recent Credit Events Accepted
No tax returns? No problem. Many Non-QM programs allow income verification through 12 to 24 months of personal or business bank statements — perfect for entrepreneurs or freelancers with variable income.
Flexible Debt-to-Income Ratios
Traditional loans cap your debt-to-income (DTI) ratio at about 43%, but Non-QM lenders often allow higher ratios based on compensating factors like strong assets or higher down payments.
Interest-Only Payment Options
Some Non-QM loans offer interest-only payment periods, which can help lower your monthly payments temporarily and increase your cash flow.
Asset Utilization Programs
If you have significant assets but limited monthly income, Non-QM loans may allow you to qualify by using your liquid net worth rather than employment income alone.
Common Non-QM Loan
Programs We Offer in Houston
- Bank Statement Loans – Use deposits from business or personal accounts to qualify.
- Investor Cash Flow Loans (DSCR Loans) – No income or employment required; qualify based on rental income.
- Asset-Based Loans – Use your assets to qualify without traditional income.
- Foreign National Loans – Designed for international buyers purchasing property in the U.S.
- Recent Credit Event Loans – Options for borrowers recovering from financial hardship.
Things to Consider
Flexible Options When Conventional Loans Fall Short
Non-QM loans do tend to come with slightly higher interest rates and down payment requirements than traditional loans. However, they provide the flexibility many borrowers need to move forward when conventional options aren’t available.
You may also find that Non-QM lenders offer greater customization in loan structure, such as adjustable-rate terms, interest-only periods, and balloon options.
Frequently Asked Questions
What is a Non-QM loan and how is it different from a conventional loan?
A Non-QM (Non-Qualified Mortgage) loan is a type of mortgage that doesn’t meet the strict guidelines of traditional, qualified mortgages regulated by the Consumer Financial Protection Bureau. Unlike conventional loans, Non-QM loans use alternative documentation — like bank statements, asset verification, or rental income — to assess a borrower’s ability to repay. These loans are ideal for borrowers with unique income situations or credit challenges.
Who typically benefits from a Non-QM loan?
Non-QM loans are designed for individuals whose financial profiles don’t fit into a conventional lending box. This includes self-employed borrowers, freelancers, business owners, real estate investors, retirees with substantial assets, and even foreign nationals. If you’ve been turned down for a traditional loan due to non-standard income or a recent credit event, a Non-QM loan could be a great alternative.
Can I qualify for a Non-QM loan without showing tax returns?
Yes. One of the most attractive features of many Non-QM loan programs is the ability to qualify using 12 to 24 months of bank statements instead of tax returns. This is especially helpful for self-employed individuals or those with income that fluctuates or doesn’t appear clearly on standard tax documents.
Do Non-QM loans require a higher down payment?
Typically, yes. Non-QM loans usually require a down payment of 10% to 20%, depending on the lender and the borrower’s financial strength. However, this tradeoff allows more flexibility in other areas, such as credit score, income documentation, and recent credit history.
Are Non-QM loans safe or high-risk?
Non-QM loans are not subprime or inherently risky. They’re carefully underwritten based on a borrower’s full financial picture, just outside traditional standards. At Clear Mortgage, we work only with reputable Non-QM lenders who follow fair lending practices and offer transparent terms to ensure you’re getting a safe, sustainable loan.