A Non-QM or non-qualified mortgage
A non-QM or non-qualified mortgage is a home loan that doesn’t meet the U.S. Department of Housing and Urban Development’s (HUD) QM definition. To meet HUD’s QM definition, a mortgage loan must meet the following guidelines:
- Require periodic payments without risky features
- Have terms not to exceed 30 years
- Limit upfront points and fees to no more than three percent with adjustments to facilitate smaller loans
- Be insured or guaranteed by FHA or HUD
Not all borrowers are alike, which is why Non-QM products were developed. Many credit-worthy borrowers don’t fit into the conforming loan guidelines. In response, lenders like Mortgage Equity Partners offer a wide selection of Non-QM specialty products. Our goal is to provide the best mortgage experience for our borrowers, including having the industry’s most diverse and inclusive portfolio of loan programs.
Here is a list of just some of the Non-QM loan solutions we offer:
Fix and Flip loan
Fix and Flip loans are for real estate investors profiting from the ability to purchase older derelict properties, fix them up, and either resell or rent out these properties for passive income. Borrowers with any level of investor experience can apply for these loans. They are suitable for non-owner-occupied single-family and multi-family (up to four-unit) property types. Purchase loans will go up to 85% of the cost of the property, and construction loan amounts will go up to 100% of the cost. In addition, Fix and Flip loans offer a 12-month term with interest-only payments, so the investor will have a low monthly payment as they fix up the property.
Bank Statement loan
A Bank Statement loan, also known as a stated income loan, is typically used by a self-employed borrower looking to purchase a home. With this type of loan, you qualify for a mortgage based on your bank statements instead of tax returns or W2s. This loan is beneficial for borrowers with inconsistent incomes month over month. Bank Statement loans are a Non-QM product and are considered riskier than most traditional loans. Bank Statement loans offer some flexibility for self-employed borrowers, but they can have more strict qualifying guidelines.
1099 as Income loan
1099 as Income loan is an option for self-employed borrowers who are 1099 workers. Many freelancers, contractors, gig economy workers, or other self-employed borrowers who file using W-9s have difficulty qualifying for a traditional mortgage. A 1099 loan helps many self-employed 1099 earners achieve homeownership.
Asset depletion loan
An Asset Depletion loan is a non-QM loan that allows borrowers to use their assets to qualify for a mortgage instead of employment income. Assets are used as collateral for paying back the loan. Money market accounts, checking or savings accounts, certificates of deposit, retirement accounts, or investment accounts. Borrowers who can benefit from Asset Depletion Mortgages include those who are self-employed with insufficient traditional, verifiable income, retirees with insufficient verifiable fixed income, or individuals with many assets in the US.
ITIN/ Foreign National loan program
ITIN/ Foreign National loan program is a lending option for non-residents in the United States looking to purchase a home, whether for an investment or to use as a home when visiting.
Foreign Nationals face unique challenges when attempting to buy property. Our Foreign National loan program allows non-residents to get a mortgage without a social security number, green card, or visa. Additionally, they are not required to have a FICO score to provide proof of credit. Instead, Foreign National borrowers can demonstrate creditworthiness through other means or submit a credit report from their country of origin. Foreign National loans are also known as ITIN or non-permanent resident alien loans. These programs allow non-citizens to purchase property without the traditional documentation required.