A good fit if…
- You’re self-employed and write-offs make your tax returns look thin
- You’re paid on 1099s as a contractor, consultant or real estate agent
- You have significant savings or investments but irregular income
- Your situation is simply unusual, and standard programs keep saying no
What “non-QM” means
A qualified mortgage (QM) follows a federal set of rules that most conventional, FHA and VA loans are built around. Non-QM loans sit outside those rules, which lets lenders accept different kinds of proof for your income.
These aren’t the no-documentation loans of the past. Lenders still verify that you can repay; they just look at bank deposits, 1099s, a P&L or your assets instead of insisting on tax returns.
Bank statement loans
A bank statement loan calculates income from your deposits:
- You provide 12 or 24 months of personal or business bank statements.
- The lender totals qualifying deposits and, for business accounts, applies an expense factor (or uses a CPA-prepared expense ratio).
- That average becomes your qualifying monthly income.
1099-only loans
If you’re paid on 1099s, some lenders will qualify you from the 1099 forms themselves instead of your full tax returns. It’s a good fit for contractors, consultants and real estate agents whose deductions shrink their taxable income.
P&L-only loans
Some programs qualify you using a profit-and-loss statement prepared by a CPA, enrolled agent or licensed tax preparer, along with proof that the business exists. Certain lenders also ask for a few months of bank statements to support the numbers.
Asset-based loans
With asset-based (or asset depletion) qualifying, the lender looks at your eligible savings, investments and retirement accounts and converts them into a monthly qualifying income. It works well for retirees, people between ventures and high-net-worth borrowers whose income doesn’t reflect what they have.
Investors: DSCR loans
Buying a rental? A DSCR loan qualifies you on the property’s rent instead of your personal income. See DSCR loans for how it works.
How Pete approaches non-QM
Pete starts by checking whether your tax returns already qualify you for a conventional, FHA or VA loan, because if they do, that’s usually the better deal. When they don’t, he compares non-QM programs across more than 150 wholesale lenders, since guidelines and pricing vary a lot from one lender to the next. Many borrowers use a non-QM loan to buy now and refinance later, once their returns tell the full story.
Run the numbers
Common questions
Is non-QM the same as subprime?
No. Non-QM simply means the loan falls outside the standard qualified-mortgage rules. Many non-QM borrowers have strong credit and plenty of income; it’s just documented differently.
Which is better, a bank statement loan or a 1099-only loan?
It depends on how you’re paid and how your deposits look. Pete will run both and show you the qualifying income each one produces.
Do bank statement loans work for real estate agents?
Yes. Commission income with good deposits is a classic fit, especially for agents with large business write-offs.
Can I refinance out of a non-QM loan later?
Yes. Many borrowers refinance into a conventional loan once their tax returns support it.
This page is general information, not a loan offer, rate quote or commitment to lend. Program guidelines, loan limits and assistance programs change; figures shown are as of 2026. Eligibility, down payment and terms depend on your credit, income, property and the program. Ask Pete for current details.