Learning Objectives
- Define Non-QM and distinguish it from QM agency loans
- Explain DSCR loans for investors
- Compare 12-month vs 24-month bank statement programs
- Identify asset-depletion and P&L-only programs
What 'Non-QM' Means
QM (Qualified Mortgage) rules under Dodd-Frank cap fees, prohibit certain features, and require strict ability-to-repay documentation. Non-QM loans live outside that box — they document income differently but still verify ability-to-repay.
DSCR Loans for Investors
Debt-Service-Coverage-Ratio (DSCR) loans qualify the property, not the borrower's personal income. The market rent divided by PITIA must usually be 1.00–1.25+. No tax returns, no W-2s, no DTI calc.
Bank Statement Programs
- 12 or 24 months of personal or business bank statements
- Lender averages deposits, applies an expense factor (often 50%)
- FICO usually 660+
- Down payment 10–20%
Key Takeaways
- Non-QM serves the self-employed, investors, and recent-credit-event buyers.
- DSCR loans qualify the property's cash flow, not the person.
- Expect higher rates and larger down payments than agency loans.
End-of-Module Exam
Module 15 Exam — 5 questions
Pick the best answer for each question. Pass with 80% or higher to mark this module complete.
- 1.
A DSCR loan qualifies based on:
- 2.
Bank-statement loans typically use:
- 3.
Non-QM rates are usually:
- 4.
An ideal Non-QM candidate is:
- 5.
Minimum DSCR ratio on most investor programs is:
0 of 5 answered