Alternative Financing Options
Non-QM Loans
Non-QM (Non-Qualified Mortgage) loans are flexible financing solutions designed for homebuyers who may not fit within the strict guidelines of traditional mortgage programs. Unlike standard loans, Non-QM products consider alternative forms of income and unique financial circumstances, making them ideal for self-employed individuals, business owners, real estate investors, or borrowers with non-traditional income streams.
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What is a Non-QM Loan?
Mortgage lending is a detail-oriented process, and anyone who has gone through underwriting can attest to the amount of documentation typically required. When you work with Jeremy Boillot, our experienced analysts ensure that your loan aligns with program guidelines while gathering the necessary documentation to set you up for successful and timely repayment.
For many borrowers, this level of documentation is essential for securing traditional financing. However, not every homebuyer fits neatly into the mold of a “standard” borrower.
For these clients, Non-Qualified Mortgages (Non-QM loans) provide an alternative path. These loans fall outside of the strict requirements established by the federal government and the Consumer Financial Protection Bureau (CFPB). Unlike conventional, FHA, or VA loans, Non-QM programs allow more flexibility, particularly for individuals with unique financial situations.
Some areas where Non-QM loans offer flexibility include:
Ability-to-Repay Rules – alternative income documentation such as bank statements or asset-based verification.
Credit Requirements – looser minimum credit score thresholds.
Repayment Structures – options such as interest-only payments or negative amortization.
While this flexibility can be attractive, it does come at a cost: higher interest rates, increased origination fees, and often longer closing timelines. For that reason, if you qualify for a conventional loan, it will almost always be the better choice.
That said, Non-QM loans remain a valuable solution for buyers who do not qualify for traditional options, offering them an opportunity to achieve homeownership despite unconventional financial circumstances.
When standard financing isn’t available, we recommend consulting with Jeremy Boillot’s mortgage team, who can help you carefully weigh the risks and benefits of Non-QM lending.
Who Are Non-QM Loans For?
Non-QM loans are designed for borrowers who don’t meet the traditional requirements of conventional financing but still have the financial strength to qualify through alternative means. These programs are especially useful for:
Self-Employed Borrowers – Those with significant tax write-offs or less than two years of filed returns.
High-Net-Worth Individuals – Buyers who hold large asset portfolios but may not show a steady income stream.
Real Estate Investors – Clients who prefer to qualify based on the projected cash flow of an investment property.
Non-Traditional Borrowers – Individuals with unique income sources, credit challenges, foreign residency, or other situations that make standard documentation difficult.
At Jeremy Boillot, the most common types of Non-QM loans we offer include:
Bank Statement Loans – Using business or personal bank statements instead of tax returns to verify income.
Asset Qualifier Loans – Allowing borrowers to qualify based on their assets rather than employment income.
DSCR Loans (Debt Service Coverage Ratio) – For investors, using the property’s rental income to qualify instead of personal income.
Foreign National Loans – Tailored for non-U.S. citizens who want to purchase property without meeting traditional U.S. income or credit requirements.
Interest Rates for Non-QM Loans
Because Non-QM loans carry more risk for lenders, the interest rates and fees are significantly higher compared to traditional financing. At Jeremy Boillot, our Non-QM lending partners typically offer rates in the 8–12% range, along with 1–2 points in origination fees, depending on the loan program and current market conditions.
Historically, Non-QM loan rates have remained 3–4% higher than comparable conventional or FHA loans. While this may seem steep, these programs often provide repayment flexibility—such as interest-only options or extended loan terms—that can help reduce monthly payments. Many borrowers use this type of financing as a short-term solution, with plans to refinance, sell, or pay off the loan once their financial situation allows.
Pros of Non-QM Loans
Alternative Qualifying Options
Non-QM loans through Jeremy Boillot give flexibility to clients who may not meet the strict standards of conventional, FHA, or jumbo loans but still have the ability to manage monthly mortgage payments. These programs are especially helpful for borrowers with inconsistent income, since they allow more leniency with debt-to-income ratios and credit score requirements.
Lenient Credit Guidelines
If your credit history isn’t perfect, Non-QM loans can still provide a path to homeownership. Depending on the program, minimum credit scores can start as low as 600. Additionally, Non-QM loans may still be an option if you’ve recently faced financial setbacks such as bankruptcy, foreclosure, or a short sale.
Flexible Loan Structures
Unlike traditional mortgages, Non-QM loans often come with more creative repayment options. This can include 40-year loan terms or interest-only payment plans, giving borrowers more control over managing their monthly housing costs.
Cons of Non-QM Loans
Higher Interest Rates
With guidance from Jeremy Boillot, it’s important to understand that Non-QM loans carry much higher interest rates compared to conventional, FHA, or jumbo loans. Since these loans are considered “riskier,” rates usually fall between 8–12% and often include 1–2 points in origination costs.
Longer Closing Timeline
Because Non-QM loans rely on more flexible, non-standardized guidelines, the underwriting process is more complex. Borrowers should expect a minimum of 30 days to close, compared to the 14-day closings that are possible with conventional financing.
Higher Risk of Default
Without the same government regulations that protect traditional mortgage products, Non-QM loans come with a greater risk of default if repayment becomes difficult. The history of subprime loans before the 2008 housing crisis highlights this concern. For many borrowers, Jeremy Boillot recommends considering Non-QM loans as a short-term solution—with the goal of refinancing into a conventional mortgage once eligible.
Types of Non-QM Loans
Bank Statement Only Loan
Benefits
Minimal Documentation – No tax returns required, making the process easier for self-employed borrowers or those with complex income streams.
Flexible Property Options – Available for owner-occupied homes, second homes, and investment properties.
Purchase & Refinance Friendly – Can be used for new home purchases as well as rate/term refinances, offering more financial flexibility.
With a Bank Statement Only Loan, lenders typically review 12 to 24 months of personal or business bank statements to verify income, rather than requiring tax returns. This loan type is especially helpful for entrepreneurs, freelancers, and business owners whose income may not appear consistent on paper but who can demonstrate cash flow through deposits.
Eligibility
Minimum 10% Down Payment – Buyers must contribute at least 10% of the purchase price.
Credit Scores Starting at 600 – Flexible credit requirements make this loan accessible to more borrowers.
Two Years Self-Employed – Applicants should have at least two years of self-employment history to qualify.
What is a Bank Statement Only Loan?
A Bank Statement Only Loan is designed specifically for self-employed borrowers who may not qualify for traditional mortgage programs. Instead of requiring tax returns, W-2s, or 1099s, this program allows applicants to prove their income using personal or business bank statements.
Traditional financing often fails to reflect the true profitability of a business due to tax write-offs, seasonal fluctuations, or unique income structures. With a Bank Statement Only Loan, borrowers can submit 12 to 24 months of bank statements to demonstrate consistent cash flow, making homeownership more accessible for entrepreneurs, freelancers, and small business owners.
What is an Asset Qualifier Loan?
An Asset Qualifier Loan is ideal for borrowers who may not have traditional income or employment documentation but do have significant liquid assets. Instead of verifying income, lenders review the borrower’s asset portfolio to determine their ability to repay the loan.
This program is an excellent fit for retirees, high-net-worth individuals, or buyers with substantial savings or investments. By using assets as the qualifying factor, borrowers can secure financing without the need for employment verification or tax returns.
Benefits
No income or employment verification required
Perfect for borrowers with large liquid asset holdings
Available for both purchases and refinances
Eligibility
Primary residence only
Minimum 25% down payment
At least $500,000 in assets post-closing
Six months of bank statements required, with sourcing for all large deposits
What is a DSCR Loan (Investor Cash Flow Loan)?
A DSCR Loan (Debt Service Coverage Ratio Loan) is designed for real estate investors who want to qualify for financing based solely on the rental income of the investment property. This program removes the need for traditional income or employment verification, allowing investors to leverage the cash flow of their properties to secure a loan.
It’s perfect for those who own a primary residence but are looking to expand their investment portfolio without relying on personal income to qualify.
Benefits
No income or employment verification required
Qualify based exclusively on rental income
Available for both purchases and refinances
Eligibility
Minimum 20% down payment
Credit scores starting at 700
Borrowers must own a primary residence
Available for non-owner occupied investment properties
What is a DSCR Loan?
A DSCR Loan, also known as the Investor Cash Flow Program, allows buyers to qualify based on the expected rental income from the property being purchased. Approval is determined by whether the property’s projected cash flow exceeds the monthly mortgage payment.
For borrowers with a down payment of at least 25% and a credit score of 720 or higher, the cash flow requirement is automatically waived. This program does not require income documentation, making the process faster and simpler for investors while minimizing paperwork and potential delays.
Foreign National Loan
Benefits
No income or employment verification required
Qualification based solely on rental income
Available for both purchases and refinances
Eligibility
Eligible VISA types: B-1, B-2, H-2, H-3, I, J-1, J-2, O-2, P-1, P-2
Gift funds are not permitted
Minimum 30% down payment for purchases
Borrower cannot reside or work in the United States
What is a Foreign National Loan?
A Foreign National Loan is tailored for non-U.S. citizens who want to purchase or refinance an investment property in the United States.
Qualification works much like an investor cash flow program, where eligibility is based on the property’s expected cash flow. Borrowers are not required to provide income or employment verification documents, simplifying the process and saving time.
Is a Non-QM Loan Right for You?
Mortgage financing isn’t one-size-fits-all. The best way to determine if a Non-QM loan is the right fit for your situation is to speak with one of our mortgage experts at Jeremy Boillot. Our team can review monthly payment scenarios, provide current interest rates, and answer any questions or concerns you may have, helping you make an informed decision.