What Is A Non-QM Loan?

A Non-QM mortgage loan (aka "non-qualified mortgage loan" or "non-conforming mortgage loan"), is a type of loan that allows you to qualify based on alternative methods, instead of the traditional income verification required for most loans. Common examples include bank statements or using your assets as income. Due to the more flexible qualification requirements, Non-QM loans open up real estate investment and home ownership opportunities to borrowers who otherwise wouldn't qualify for mortgage financing.

When A Conventional Mortgage Isn't An Option

At Northwest Alternative Mortgage, we always connect our clients with the best possible loan that they qualify for. For over 20 years, we've been connecting borrowers in Oregon, Washington, and Idaho with the financing they need to be successful. Whether it's an FHA Loan for first-time homebuyers or a Conventional Loan at a lower rate, will never talk you into a Non-QM loan unless it's the best possible loan for you!

In the aftermath of The Great Recession that lasted from 2007 to 2009, the Consumer Financial Protection Bureau (CFPB) was forced to institute stricter requirements for conventional mortgages. These following guidelines were put in place to protect borrowers from entering loan agreements that they cannot afford to repay:

Points and fees that are 3% or less than the total loan amount
Maximum loan terms of 30 years or less
No negative amortization, interest-only, or balloon loans

Although these requirements were put in place to protect borrowers, they also made it more difficult to qualify for a traditional mortgage. Since many borrowers don't check all the boxes that banks require, purchasing your first home or investing in real estate can feel out of reach in today's market.

Benefits of Non-QM Loans

One of the advantages of Non-QM loans is that they open up a wider array of investment and home ownership opportunities for borrowers. Although these benefits are determined by your credit history, unique needs, and assets, here are few of the common features of Non-QM Loan programs we offer:

Greater underwriting flexibility
No personal income calculations are required
No job history is required (in some cases)
As little as 10% down required
No reserves required (in some cases)
Credit scores as low as 620 allowed (580 w/ compensating factors)
Low debt-service-coverage ratio (DSCR) on investment properties
Counting rental income (including Airbnb & VRBO)

Types Non-QM Loans We Offer

At Northwest Alternative Mortgage, we aren't in the business of cranking "cookie-cutter" loans to borrowers. Instead, we custom-tailor every loan we fund based on your unique situation and aspirations. Whether you're a self-employed business owner, real estate investor, veteran, or someone who's run into a dead end with big banks and brokerages, there are likely way more financing options than you're aware of. Here are a few of the most popular Non-QM loans we offer:

Call our team of lending experts at NW Alternative Mortgage today at 503-343-7999 to find out what Non-QM Loan program you qualify for!

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