Non-QM Loans

For the most up-to-date non-QM loan rates, check our current mortgage rates page. Non-QM loan rates vary based on several factors, including the specific loan type, your credit score and financial profile, down payment amount, and current housing market conditions.

Non-QM mortgage products may be more expensive than other types of home loans. Since they’re not backed by Fannie Mae or Freddie Mac and can’t be sold on the secondary mortgage market, they’re riskier investments for non-qualified mortgage lenders.

To mitigate this risk, lenders typically require higher minimum down payment amounts and interest rates that can make some non-QM loans more expensive than traditional home loans.

However, this isn’t always the case. Some non-QM products, such as DSCR loans for real estate investors, can actually offer lower interest rates than conventional investment property loans. This is due in large part to the Loan-Level Price Adjustments (LLPAs) applied to conventional financing. 

Because of their more flexible lending criteria and, in some cases, competitive pricing, non-QM loans may still be a more attractive alternative for self-employed first-time buyers, repeat buyers, real estate investors, and others who don’t fit with traditional lending guidelines.

Non-QM closing costs are generally similar to conventional loan closing costs and include the same core components: origination fees, appraisal, title, and escrow. Some non-QM programs may carry slightly higher origination fees to offset the additional underwriting complexity, but there is no category-wide premium on closing costs the way there is on interest rates. Griffin Funding is a direct-to-consumer lender with no broker markup, which keeps fees competitive across all non-QM programs.

Both fixed-rate and adjustable-rate options are available. Fixed-rate loans provide payment stability and predictability, while adjustable-rate mortgages may offer lower initial rates that can be beneficial for certain investment strategies or shorter-term ownership plans. 

If you currently have a non-QM loan and want to explore better terms, you can refinance a non-QM loan to potentially secure more favorable rates or terms.

Private mortgage insurance (PMI) is only required for conventional mortgages backed by Fannie Mae and Freddie Mac. Instead, for non-QM loans, your lender will have their own requirements in place to help them reduce their risk when borrowers make low down payments.

Like with conventional mortgage rates, non-QM rates can change daily. Non-QM loan rates can fluctuate based on market conditions, bond yields, and overall risk pricing.

Credit score requirements depend on the loan type and loan amount, but can be as low as 620 in some cases, making non-QM loans accessible to borrowers with less-than-perfect credit.

Non-QM loans don’t require traditional underwriting requirements like W-2s and pay stubs to verify your income. While there’s no longer a no-doc mortgage program available for homeowners, non-QM loans are relatively low-doc.

A few basic types of documentation you may need to get approved for a home loan include the following:

• Bank statements: Bank statements are crucial documents for non-QM mortgage loans because they help underwriters verify your income and determine whether you have the ability to repay the loan. Lenders may ask for these documents with conventional loans as well, but they’re most important for non-QM loans like bank statement loans and asset-based loans.
• Rental agreement: Rental agreements for DSCR non-QM loans verify the gross rental income you are receiving. If you do not have a rental agreement, the appraiser will provide a monthly rental income based on rental comparables in the area on form 1007.
• Proof of assets: Asset-based loans allow you to use liquid assets as income to qualify for a mortgage loan, so you’ll need to provide proof of those assets, including retirement, investment, and bank accounts.

The exact type of documentation you’ll need depends on the loan. For instance, one of the key differences between DSCR vs. conventional loans is the type of documentation required to determine a borrower’s ability to repay. DSCR loans are for investment properties and determine whether the rental income can cover the total cost of the mortgage, so there’s no income verification, but you’ll have to provide information regarding the rental income of a particular property.

Yes, Griffin Funding offers recent credit event loans, and many non-QM loan types have flexible qualification guidelines that can accommodate those who have experienced significant financial setbacks like bankruptcy or foreclosure. 

These programs are designed to help you rebuild your homeownership dreams even after major credit events, often with shorter waiting periods than conventional loans require.

Yes, you can qualify for a non-QM loan with no tax returns. For self-employed individuals, business owners, and investors, tax returns often don’t represent their true income. This is why non-QM loans allow for alternative income verification methods such as bank statements, DSCR, liquid assets, or 1099 forms.

Non-QM loans are designed for borrowers who do not fit the income, employment, or credit profile required by conventional mortgage guidelines. The primary borrower types non-QM loans are built for include self-employed individuals and business owners, real estate investors, freelancers and contractors with 1099 income, retirees with significant assets, foreign nationals purchasing US property, borrowers with recent credit events, and high-net-worth individuals whose tax returns understate their true financial position. Non-QM loans are not designed for borrowers who have trouble affording a mortgage. They are designed for borrowers who can clearly afford one but cannot prove it through conventional documentation.

Griffin Funding has specialized in non-QM lending since 2013 and has funded over $3.6 billion in loans. Every borrower works directly with a dedicated Senior Loan Officer and benefits from Griffin’s AI-driven underwriting platform, which identifies the best non-QM program for your situation before you complete a full application. Griffin operates as a direct lender with no broker middlemen, meaning your loan officer, your underwriting, and your funding all come from one company.

For first-time non-QM borrowers, a direct lender with in-house non-QM underwriting typically offers a clearer, faster, and more consistent experience than a broker. With a direct lender like Griffin Funding, you work with one team from application to closing, your loan officer has direct access to underwriting, and there are no third-party handoffs that can slow down communication or extend timelines.

At Griffin Funding, you are assigned a dedicated Senior Loan Officer for the full process. You will receive proactive updates at each milestone rather than needing to chase for status. Griffin also provides free calculators, a real-time loan tracking app (Griffin Gold), and a step-by-step process guide so you understand exactly what is happening and what comes next at every stage.

Non-QM mortgage payments are calculated the exact same way as regular mortgages. The only difference is the underwriting process which determines a borrower’s ability to repay using alternative documentation like bank statements instead of pay stubs.

Like all home loans, non-QM mortgage payments are calculated based on principal, interest, taxes, and insurance (PITI).

• Principal: The principal is the amount of the payment that’s dedicated to repaying the principal balance.
• Interest: Interest is the mortgage rate you receive when you apply for the loan. Bad credit can result in higher interest rates, which typically results in higher monthly payments and a greater cost over the life of the loan.
• Taxes: Taxes refer to real estate and property taxes assessed by local government agencies. They’re calculated each year and can be paid as part of your mortgage.
• Insurance: Property insurance payments are rolled into your mortgage payment. Non-QM loans do not require PMI.

Qualified mortgages are defined as conventional loans backed by Fannie Mae and Freddie Mac, as well as government-backed loans such as VA loans, FHA loans, and USDA loans. The CFPB has established a set of rules for QM loans to provide more stable borrowing requirements. 

Some of the key qualified mortgage requirements include:

• The “ability-to-repay” rule: Under the ability-to-repay rule, lenders must make a good-faith and reasonable effort to determine whether a borrower can afford to repay the loan. More specifically, this means a lender must inquire about and document a borrower’s income, assets, employment status, credit score, and monthly debts and expenses.
• Certain loan features are prohibited: No negative amortization, interest-only, or balloon loans are permitted.
• Limits on loan price and term: In order to be a qualified mortgage, a loan must not exceed an APR threshold that varies depending on the type and size of the loan. Additionally, the loan term cannot exceed 30 years.
• Limits on points and fees: The points and fees for a qualified mortgage exceeding $100,000 must end up being 3% or less of the total loan amount. The threshold for points and fees varies for smaller loan amounts.

These stricter regulations were established in 2014 in response to the Great Recession that lasted from 2007 to 2009, during which many borrowers defaulted on their subprime mortgages and were forced into foreclosure. This not only had a long-lasting effect on the economy, but damaged many individuals’ credit.

Hard money loans are designed for investment properties, while non-QM loans are for residential and investment properties. Hard money loans typically require higher down payments than many types of non-QM loans and tend to have exceptionally short loan terms and higher rates and fees.

You can purchase a residential or investment property with non-QM loans, including:

• Primary and secondary residences
• Vacation homes
• Investment properties
• Single-family homes
• Multi-family homes
• Townhomes & condos
• Manufactured homes
• Rural homes

Note that eligible properties may vary depending on the type of non-QM loan you use. For example, DSCR loans can only be used to purchase income-generating properties and cannot be used to buy a primary residence.

Some of the cons of non-QM loans include: 

• Less safeguards in place for borrowers
• Potential for higher interest rates
• Higher down payment requirements 
• Not offered by every lender 

Yes. Borrowers can use non-QM home loan programs for rate-and-term refinances or cash-out refinances.

Griffin Funding aims to complete the mortgage process in 30 days or less, providing efficient service while maintaining thorough underwriting standards. Our AI-driven underwriting platform helps streamline the process so that we can deliver funding within a shorter timeline.

The process for securing a non-QM mortgage is fairly straightforward and can be completed in 10 easy steps:

1. First, the loan officer will assess your situation and propose the loan options (and the rates) that are available for your circumstances.
2. Complete the loan application over the phone or through our secure online platform.
3. Lock in your rate over the phone based on the agreed-upon terms.
4. We will send the initial application and disclosures which you will need to then review and e-sign.
5. Return the requested supporting documentation.
6. Your paperwork will be submitted to underwriting.
7. The appraisal of the property and a termite inspection (if applicable) need to be performed.
8. Once the loan is approved, we will request any additional information to finalize the documentation.
9. You will review your Closing Disclosure/settlement statement with your loan officer and then you can have it signed by a notary.
10. Once everything is complete, your loan will be funded and you’re ready to move forward with purchasing or refinancing your property.

In general, the non-QM loan process is similar to conventional loans but may involve reviewing alternative documentation such as bank statements or rental income. 

Griffin Funding uses an innovative AI-driven underwriting platform for non-QM loans, which can streamline the process and more quickly connect you with the financing you need.

When choosing the best non-QM lender for self-employed borrowers, you want to work with one that understands complex income scenarios and offers flexible qualification options. In 2026, Griffin Funding stands out by providing DSCR loans, bank statement loans, 1099 loans, asset-based programs, and a variety of non-QM home equity solutions. 

We offer flexible credit guidelines, competitive loan terms, an AI-driven non-QM underwriting platform, and a team of mortgage professionals with extensive experience navigating non-QM loan programs. Griffin Funding is a trusted choice for self-employed borrowers seeking customized mortgage solutions and five-star service.

Griffin Funding can provide initial pre-approval within 24-48 hours of receiving a complete application and supporting documentation. Full underwriting approval for most non-QM programs follows within the 30-day closing window.

No. The average conventional loan takes 43 to 50 days to close. Griffin Funding targets 30 days or less for all non-QM programs, and DSCR loans have closed in as few as 6 calendar days. Non-QM loans with Griffin are not slower than conventional financing and in many cases are faster.

DSCR loans close fastest at Griffin Funding, in as few as 6 calendar days for qualified, organized borrowers. This speed is possible because DSCR loans require no personal income verification, and Griffin’s AI underwriting platform (LIA) automates the qualification process.

The single most effective way to speed up a non-QM loan is to have all documentation ready before submitting the application. 

For bank statement loans, that means 12 to 24 months of complete bank statements with no missing pages. 

For DSCR loans, that means a signed lease agreement or property information sufficient for an appraisal. Responding quickly to any follow-up requests from your loan officer also reduces the timeline significantly. 

Griffin Funding provides pre-approval in as little as 24 hours for complete applications, and borrowers who arrive organized and responsive are the ones who close in the shortest timeframes. Griffin Funding’s AI underwriting platform (LIA) also automates much of the non-QM qualification process, which reduces manual processing time compared to lenders using traditional underwriting workflows.