Who are the Best Non-QM Lenders?

Many mortgages went into default more than ten years ago due to the borrowers’ inability to continue making mortgage payments. The spike in defaults was mostly caused by a large number of mortgages that, while they initially helped borrowers buy homes, ultimately put those homeowners in a difficult financial situation. Non-QM lenders now offer safe alternative financing solutions by modifying their services.

The Qualified Mortgage Rule was developed in 2014 by the Consumer Financial Protection Bureau (CFPB). This rule established requirements for lenders, including the need for them to confirm the borrower’s ability to pay back the mortgage and the need for them to offer mortgage options that minimize risk for both the borrower and the lender. While some borrowers may not meet the requirements or are not eligible for a qualified mortgage rule, non-QM might be preferable. However, this article will look at what non-QM is, the types of non-QM loans, who are eligible for non-QM loans, and who are the best non-QM lenders in 2022.

What is a Non-QM Loan?

Non-qualified loans, often known as non-QM loans, are more adaptable mortgage finance. Mortgages that fall short of the Consumer Financial Protection Bureau’s (CFPB) standards for qualifying mortgages are known as non-QM loans. They have less stringent financial and credit conditions. They are typically an excellent option for self-employed borrowers, some investors in rental properties, and others who don’t fulfill the criteria of traditional mortgage loans. A Non-QM loan is for those unable to fulfill the minimal standards for a qualified mortgage.

Non-QM loans could come with greater rates than qualified mortgages, interest-only or balloon payments, and a higher debt-to-income ratio. A non-QM mortgage does not follow the guidelines for lending established by the Dodd-Frank Act. These rules were established in 2014 to guarantee that borrowers could pay back their debts and to avoid the subprime mortgage crisis that occurred during the Great Recession. Non-QM loans are also available to applicants with strong credit histories, stable incomes, and seeking alternatives to the mortgage options that their bank may provide. Non-QM loans are mortgages that don’t meet the Consumer Financial Protection Bureau’s (CFPB) requirements to be considered qualified mortgages.

Types of Non-QM Loans

Non-QM lenders offer a variety of loan programs to borrowers. However, some of the loan programs non-QM lenders offer include:

• Bank statement loans
• Recent credit event loans
• Mortgages without tax returns
• Asset-based loans
• ITIN loans
• Interest only mortgages
• Super jumbo mortgages for very large
• Commercial rental property loan
• High DTI mortgages
• No-income investment loans
• Mortgages under an LLC
• Foreign national loans
• Mortgages After a Foreclosure

Who are Qualified for the Non-QM Loans?

You may qualify for a non-QM loan if you are not eligible for a qualified mortgage loan. However, you can apply for a non-QM loan under the following category.

• People who need a very large loan amount for business or home financing
• Self-employed who cannot qualify using tax returns
• Real estate investors
• Retiree
• People who have high liquid assets but low monthly income
• Those with low credit score
• Foreign nationals
• Those who need a mortgage without a two-year work history.
• Those with a high DTI ratio

What are the Pros and Cons of Non-QM Loans?

Before applying for non-QM, you need to understand the pros and cons of the loan program. A clear understanding of the advantages and disadvantages can help you make the right financial decision.

Pros of Non-QM Loans

The following are the advantages of taking non-QM loans.

• Having a job may not be a requirement
• Investment properties are allowed
• No PMI (Private Mortgage Insurance)
• Larger loan amounts are permitted
• Interest-only option available for lower payments
• The loan can be in the name of an LLC
• Multiple properties can be financed

Cons of Non-QM Loans

Before applying for a non-QM loan, some of the cons you need to consider include:

• Pre-payment penalties for investment properties
• Higher lender fees
• High-interest rate
• Higher reserves required

Who are the Best non-QM Lenders in 2022?

Non-QM loans have returned to their operation after almost going extinct due to the Coronavirus pandemic. These lending options help borrowers who have bad credit, are self-employed or are ineligible for traditional loans/qualified mortgage loans. Different lenders will provide different programs. These lenders’ rates are also not all the same. The top 10 non-QM lenders you should consider are the following:

1.    theLender

One of the real estate companies in the United States with the fastest projected growth is theLender. theLender works to give lenders a simple and efficient lending experience. theLender is committed to the expansion and achievement of clients’ investments and assists both newbie and experienced real estate investors in creating an outstanding and comprehensive diversified investment portfolio. theLender products assist investors in boosting their purchasing power and utilizing the capital in their current assets to create strong portfolios. theLender helps clients to use passive income to their advantage so that there is a chance for significant, long-term payments.

Loan programs Offered

• DSCR investor Loans
• Asset-based lending
• Minimum credit of 620
• Max LTV of 80%  
• Loan Amounts between $100,000 to $4,000,000
• Refinance loans
• Short-term rental loans
• Long-term rental loans
• Self-employed loans
• Multi-family unit loans
• Bridge & rehab loans
• Fix & flip financing

2.    Acra Lending

Acra Lending is the largest non-QM mortgage lender for wholesale and correspondent. One of the factors contributing to Acra Lending’s popularity is that its 12-month bank statement program allows up to a 90% LTV (without MI). They also give quite a deal of leeway concerning credit history, approving credit scores as low as 575. They provide various services and initiatives designed to help mortgage experts assist their clients’ investment and purchasing goals. The alternative income products that Acra specializes in include bank statements, asset depletion, and employment verification.

Acra is well-known for its ethical lending policies, cutting-edge products, and effective business operations in the mortgage market. They offer owner-occupied and non-owner-occupied fixed and variable rate mortgages (ARMs) for residential properties. Acra provides its programs and services through three main verticals: wholesale lending, retail lending, and correspondent lending, and it is authorized by the National Mortgage Licensing System (NMLS) in 39 states nationally.

Loan Programs Offered

• Jumbo loans
• 3 Month Bank Statement Loans
• Asset depletion loans
• Foreign National Mortgages
• Interest Only Mortgages
• 12-Month Bank Statement Loans
• DSCR Business Purpose Loans
• ITIN Loans
• Minimum credit of 575
• Max LTV of 90%  
• Loan Amounts between $150,000 to $3,000,000
• Max DTI of 50%

3.    Angel Oak Mortgage Solutions

Angel Oak Home Loans is a full-service lender Licensed by the Department of Financial Protection and Innovation and the department of banking and insurance. They provide borrowers with a range of traditional and unconventional (non-QM) mortgage packages suited to their particular requirements for home finance. Retail and consumer direct platforms make up Angel Oak’s housing loan.

The retail lending platform enables mortgage advisors to concentrate on acquisitions and refinances in households and communities while guiding borrowers on loan programs that best suit their particular needs. On the other hand, the direct consumer platform allows borrowers to connect directly with the available loan options.

Loan Programs Offered

• Non-Warrantable Condos
• Loan Amounts between $150,000 to $3,000,000
• Jumbo Loans
• 12-Month Bank Statement Loans
• DSCR Business Purpose Loans
• Conventional Loans
• Max DTI of 50%
• 1099 Income Loans
• Investor cash flow mortgage
• A minimum credit score of 620
• Asset Depletion
• Max LTV of 90%

4.    Carrington Mortgage

The “Carrington Flexible Advantage Series” from Carrington Mortgage provides a range of non-QM loans. In their loan program, there are options for self-employed borrowers, people with low credit cards, and people who do not have any requirements for bankruptcies, foreclosures, or short sales.

Carrington mortgage has branch offices throughout the country and runs several linked operational firms. These companies are divided into three main categories: asset management, mortgage operations, and our direct-to-consumer platform, Vylla.com. They provide mortgage services and lending solutions, assist people in buying and selling homes, and more.

Loan program offered

• Bank Statement Loans
• USDA Loans
• Max DTI of 50%
• VA Loans
• Asset Depletion
• A minimum Credit score of 550
• FHA Loans
• DSCR Mortgage Loans
• Max LTV of 90%
• Recent Housing Event Program
• Loan Limit of $2.5 Million
• Conventional Loans

5.    First National Bank of America

First National Bank of America provides a range of non-QM loan solutions, including those for self-employed customers and those with different credit concerns (such as a recent bankruptcy, foreclosure, or short sale). First National Bank of America (FNBA) is a commercial bank that offers services for individuals and small companies. While its other checking and savings products are exclusively accessible to residents of Michigan, it offers users nationwide access to its certificates of deposit (CDs) and high-yield savings account.

First National Bank of America gives customers access to some of the highest CD (certificate of deposit) rates available in the market, high-yield savings accounts, Non-QM mortgages, business loans, Self Directed IRA loans, etc.

Loan program offered

• Bank Statement Loans
• Loan limit of $1.25 Million
• Recent Housing Event
• Asset Depletion
• Max DTI of 55%
• P&L Statement Mortgage
• Max LTV of 85%
• ITIN Loans
• Minimum Credit of 600 (and no credit score)

6.    Northstar Funding

Northstar Funding provides a variety of incredibly competitive non-QM lending products. They offer stated income loans, mortgages for foreign nationals, asset depletion loans, mortgages for persons with terrible credit, and solutions for people from bankruptcy, foreclosure, or a short sale. They are FHA-approved lenders who accept applications from borrowers with credit scores as low as 500.

With the client’s help, Northstar Funding sets goals for the percentages of the portfolio that should be allocated to equity investments, fixed income investments, and cash. These are determined by the client’s capacity for risk, the time horizon for investments, and financial requirements. Northstar funding offers three categories of fixed income investments grade bonds, community loan funds, and micro or alternative lending.

Loan program offered

• Bank Statement Loans
• Jumbo Loans
• Max LTV of 90%
• Recent Housing Event
• Conventional Loans
• Max DTI of 50%
• ITIN Loans
• Loan Limit of $3 Million
• Asset Depletion
• FHA Loans
• Min Credit score of 500
• P&L Statement Mortgage

7.    ACC Mortgage

ACC Mortgage (All Credit Considered Mortgage) offers non-QM mortgage programs to self-employed borrowers and those with different kinds of credit concerns. ACC Mortgage adheres to three simple principles: quality service, a thorough financial assessment, and enhancing the borrower’s financial standing and the community.

To assist customers in achieving their financial objectives, ACC Mortgage provides loans to residential and commercial clients. ACC Mortgage loans support local economic development by promoting property ownership, employment creation, and enhancing borrowers’ financial situations. The three pillars of ACC Mortgage’s lending philosophy include benefit to the customer and the community, ability to repay, and fair value.

Loan program offered

• P&L Statement Mortgage
• Loan Limit of $1.5 Million
• Max DTI of 55%
• Recent Housing Event
• Min Credit of 620
• Bank Statement Loans
• ITIN Loans
• Asset Depletion

8.    Greenbox Loans

Greenbox Mortgage provides solutions for conventional borrowers and a range of non-QM lending products. With Greenbox Capital, small and mid-sized businesses may expand without worrying about dealing with the hassle of qualifying for small business financing from a conventional lender. They grant more small business finance than conventional lenders, frequently in as little as one business day, due to a simplified online application process, quick turnaround, and approvals based on the potential of your firm—not simply your credit rating.

Greenbox Capital provides several small business financing alternatives to meet your company, with capital ranging from $3,000 to $500,000. These include invoice factoring, merchant cash advances, online small business lines of credit, collateral business loans, and alternative small business loans.

Loan program offered

• 12-24 Month Bank Statement Loans
• Interest Only Mortgages
• Max LTV of 90%
• Asset Depletion
• ITIN Loans
• Min Credit score of 500
• Foreign National
• Max DTI of 50%
• Recent Housing Events
• Jumbo Loans
• Conventional Loans
• Loan Amounts between $150,000-$3,000,000
• FHA Loans
• VA Loans

9.    A&D Mortgage

A&D Mortgage provides a variety of non-QM loan packages, including numerous possibilities for customers that are self-employed. This covers loans with two-month, 12-month, and 24-month bank statements. Additionally, they provide a WVOE / 1099 program and a 2-year CPA P&L program.

A&D Mortgage Home purchasers with credit scores ranging from A to D are given equal loan options. A&D Mortgage is a direct lender that provides a wide range of conventional, government, and non-QM products, including bank statements, jumbo loans, and foreign National programs.

Loan program offered

• Bank Statement Loans
• Loan Limit of $1.5 Million
• Recent Housing Event
• Max DTI of 55%
• ITIN Loans
• P&L Statement Mortgage
• Max LTV of 90%
• Asset Depletion
• Min Credit score of 599

10.    Impac Mortgage

Impac Mortgage is a non-QM wholesale lender that provides both conventional and non-QM mortgage programs. The three business segments of Impac Mortgage are Mortgage Lending, Long-Term Mortgage Portfolio, and Real Estate Services.

The Mortgage Lending division holds the rights to mortgage servicing while offering mortgage lending products through the retail, wholesale, and correspondent lending channels. The remaining interests in securitization trusts are included in the segment under the Long-Term Mortgage Portfolio. The Real Estate Services segment manages the portfolio of long-term securitized mortgages and offers loss mitigation services.

Loan program offered

• Asset Depletion
• Max LTV of 85%
• Jumbo Loans
• Conventional Loans
• Max DTI of 50%
• Investor Mortgages
• VA Loans
• Loan Limit of $3 Million
• Bank Statement Loans
• Min Credit score of 660

11.    Verus Mortgage Capital

Verus Mortgage Capital is a non-QM wholesale lender that offers non-QM loan programs, like Prime Ascent Loan Program, giving borrowers the chance to be eligible through full or alternative paperwork (bank statement loans). With the support of their unique lending programs for correspondent lenders, they assist underprivileged borrowers who may not qualify for conventional loans to support businesses.

Loan program offered

• Bank Statement Loans
• Full Doc Loans
• Max LTV of 90%
• Alt Doc Loans
• A minimum Credit score of 620
• DSCR Loans
• Investor Mortgages
• Max DTI of 50%
• Loan Limit of $3 Million
• ITIN Loans

Non-QM Loan Application Steps

When applying for a non-QM loan, you must follow guidelines to help you through your application journey. They are:

• After submitting an application, a loan officer will assess your situation and present you with various options and rates.
• You must complete a loan application with the necessary details and information.
• Pick the lender and program that best suit your needs.
• Lock in your mortgage terms and rates
• Get your disclosures and application form, and ensure you read them properly before signing.
• Submit the necessary paperwork.
• The underwriting procedure starts.
• Any agreed-upon appraisals will proceed.
• Your loan is authorized.
• Send any supporting information and data the lender might need.
• Examine the agreement before signing it.
• Your non-QM loan has been funded.

Why should you Choose Aurum and Sharpe for your Non-QM Loans?

There are some local banks and credit unions that do offer non-QM loans, albeit not all lenders do. To have a safe and reliable borrowing experience, you need to keep an eye out for approved loan companies. Use a mortgage broker’s services to compare several lenders simultaneously to save time. Also, understand that certain mortgage lenders will provide better conditions than others, so you should constantly compare offers and take your time to do thorough research.

When choosing a lender, you should go for a lender that is easy to connect and work with and answer all your questions accurately, just like Aurum and Sharpe. We help our clients get the most out of their non-QM mortgage loans while developing tailored loan solutions that suit their financial state. Our team has years of expertise in their field, is easy to relate to, and can guide you through each stage of your loan acquisition. Visit our website to get started.

Mortgage Rates

Calculate Your Monthly Payment