Non-QM (Non-Qualified Mortgage)
Mortgages that fall outside Qualified Mortgage rules — typically used for self-employed, foreign-national, or investor borrowers.
Non-QM loans do not meet QM standards but still must satisfy the CFPB's ability-to-repay (ATR) rule. Lenders document repayment ability in alternative ways: bank statements, P&L statements, 1099s, asset depletion, or (for investment property) DSCR. Non-QM is the home of bank statement, P&L, 1099-only, asset qualifying, ITIN, foreign national, jumbo non-QM, and DSCR products.
Related terms
Qualified Mortgage (QM)
A category of mortgages meeting CFPB safety standards: limits on points/fees, no risky features, and a verified ability-to-repay analysis.
Ability-to-Repay (ATR)
Federal rule requiring mortgage lenders to verify a borrower's ability to repay before originating a consumer-purpose loan.
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