Question 1

What is non-QM lending?

Accepted Answer

Non-QM lending refers to mortgage origination outside the Qualified Mortgage frameworks set by the CFPB (and other agency/secondary market definitions). It includes loans that use alternative methods to assess repayment ability.

Question 2

Is a non-QM loan a conventional loan?

Accepted Answer

Not necessarily. "Conventional" usually means loans conforming to Fannie Mae/Freddie Mac guidelines. Many non-QM loans are held in portfolio or sold to non-agency investors rather than the GSEs, so they are distinct from agency conventional loans.

Question 3

Can you refinance a non-QM loan?

Accepted Answer

Yes. Borrowers can often refinance a non-QM loan into another non-QM product or into a QM/conventional product later, for example, after demonstrating payment history or improving documentation. Product availability and refinancing terms depend on the borrower's evolving profile and investor criteria.

Question 4

Is a HELOC a non-QM loan?

Accepted Answer

A HELOC is an **open-end line of credit**, not a closed-end mortgage; the ATR/QM rule and corresponding QM/non-QM closed-end framework generally do **not** apply to HELOCs in the same way. That means HELOCs aren't categorized in the simple "QM vs non-QM" closed-end sense; be careful when discussing HELOCs as "non-QM."

Question 5

What is non-QM underwriting?

Accepted Answer

Non-QM underwriting assesses repayment ability using alternative documentation and methods: bank-statement income calculation, asset depletion drivers, DSCR calculations for rentals, manual underwriting, and more. Experienced underwriters and processors are important because much of this work is manual and program-specific.

Question 6

What credit score do you need for a non-QM loan?

Accepted Answer

Minimums vary by program; **many lenders start around 620**, while better pricing typically requires **700+**. Industry averages for non-QM borrowers were relatively high (≈776 in 2024), reflecting that many non-QM borrowers are high-credit-score borrowers with nontraditional income documentation.

Question 7

Can self-employed people get non-QM loans?

Accepted Answer

Yes, self-employed borrowers are core beneficiaries of many bank-statement and alternative documentation programs. Those programs allow qualification based on documented bank deposits or P&L statements rather than tax returns, which may understate cash flow due to deductions.

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