Non-QM Specialist
Non-QM Loans — When Conventional Guidelines Don't Fit, We Still Can.
Qualified Mortgage (QM) guidelines — the rules governing conventional, FHA, and VA loans — were designed for W-2 employees with predictable, documented income. They exclude millions of creditworthy borrowers: business owners whose income is buried in legitimate tax deductions, investors with complex LLC structures, high-net-worth individuals living off assets, and foreign nationals without U.S. credit history.
HQ Lending specializes in Non-QM solutions that use common-sense underwriting to evaluate the full picture of a borrower's financial strength — not just a line item on a tax return.
Non-QM Programs We Offer
12 & 24-Month Bank Statement Loans
Qualify using 12 or 24 months of personal or business bank statements. We calculate income based on average monthly deposits — no tax returns required. Perfect for self-employed borrowers and business owners whose Schedule C income is reduced by legitimate business deductions. Business expense ratios of 10–50% applied depending on industry.
Asset-Based / Asset Depletion Loans
Qualify using liquid assets — savings, brokerage accounts, retirement funds (at 60–70% of value) — divided over a set depletion term (typically 84–120 months) to establish a monthly income figure. No employment, no income stream required. Ideal for retirees and high-net-worth investors living off investment portfolios.
1099 Income Loans
For independent contractors, consultants, real estate agents, and gig workers who receive 1099 income. Use 1–2 years of 1099s to document income without needing to show net profit after deductions. Straightforward path to qualification for high-earning 1099 professionals.
Investor Cash Flow / Non-QM DSCR
Same property-based cash flow qualification as standard DSCR, but with expanded credit flexibility — lower minimum scores, recent credit events allowed after seasoning, and higher LTV options on some programs. Ideal for investors who need DSCR terms but don't quite meet standard DSCR credit thresholds.
Foreign National Loans
U.S. credit history not required. Foreign nationals can qualify using overseas bank statements, international credit reports, or asset documentation. Available for investment properties in most of our 45 licensed states. ITIN or passport acceptable as identification.
Recent Credit Events (Bankruptcy, Foreclosure, Short Sale)
Non-QM programs accept borrowers 12–24 months out of bankruptcy, foreclosure, or short sale — far shorter seasoning requirements than conventional (typically 4–7 years). If you've rebuilt your financial footing, we can likely get you financed.
Frequently Asked Questions
How is income calculated on a bank statement loan?
For personal bank statements: we average the total deposits over 12 or 24 months and use that as your monthly gross income. For business bank statements: we apply an expense ratio (typically 10–50% depending on your industry) to determine net income. No tax returns, no P&L statements required — just your bank statements.
How low can my credit score be for a Non-QM loan?
Non-QM programs go as low as 580 on some products. However, lower credit scores require larger down payments (25–30%+) and result in higher rates. Most programs have a sweet spot around 640–680. A strong income story, significant assets, or a low LTV can often compensate for a weaker credit score.
Can I use a Non-QM loan for a primary residence?
Yes — Non-QM loans are available for primary residences, second homes, and investment properties. Bank statement loans and asset depletion programs are commonly used by self-employed borrowers buying their primary home. All Non-QM primary residence loans still require an Ability-to-Repay (ATR) analysis, even without traditional income docs.
Are Non-QM rates much higher than conventional?
Non-QM rates are typically 0.5–2.0% higher than conventional rates, depending on the program, loan size, credit profile, and LTV. For borrowers who can't qualify conventionally, this premium is almost always worth it — access to capital is worth the marginal rate difference. Rates improve significantly with higher credit scores and lower LTVs.
How soon after a bankruptcy or foreclosure can I qualify?
Non-QM programs typically require just 12–24 months of seasoning after a bankruptcy discharge, foreclosure completion, or short sale — compared to 4–7 years for conventional loans. Chapter 7: typically 12–24 months. Chapter 13: sometimes eligible while still in repayment. Foreclosure/Short Sale: 12–24 months depending on lender. The key is demonstrating re-established credit since the event.