What is a Non-QM Loan?
“QM” stands for “Qualified Mortgage”—a category of loans that meet specific federal guidelines designed to ensure borrowers can repay their loans. Non-QM loans fall outside these guidelines, offering flexibility for borrowers whose situations don’t fit traditional boxes.
In Nebraska, these loans are frequently used in Lincoln and Omaha by business owners and real estate investors. They’re designed for creditworthy borrowers who have non-traditional income documentation, unique employment situations, or other circumstances that don’t align with standard qualification methods.
Common examples include self-employed borrowers who show less income on tax returns than they actually earn, real estate investors, and individuals with significant assets but limited W-2 income.
Potential Benefits of Non-QM Loans
Conventional loans offer versatility across many borrower profiles.
Alternative income documentation
Allows income evaluation using non-traditional methods.
Self-employed friendly options
Designed for borrowers who do not receive W-2 income.
Flexible underwriting approach
Considers overall financial strength rather than rigid rules.
Investment property availability
Many programs support non-owner-occupied properties.
Who Might Consider a Non-QM Loan?
NON-QM loans may fit borrowers with unique financial profiles.
- Self-employed business owners
- Borrowers with variable income
- Real estate investors
- Buyers outside standard guidelines
Things to Consider
NON-QM loans differ from traditional mortgage programs.
- Higher costs may apply
- Larger down payments may be required
- Program availability varies
- Not all scenarios qualify
- Eligibility for loan programs depends on your specific financial situation, credit profile, and property details. This information is for educational purposes only and does not constitute a commitment to lend.
Who uses NON-QM loans in Nebraska?
These loans are commonly used by self-employed borrowers and investors in Lincoln and Omaha.
Can NON-QM loans be used for investment properties?
Yes. Many NON-QM programs are designed for investors.
How do NON-QM loans differ from conventional loans?
NON-QM loans allow alternative documentation, while conventional loans require standard verification.
Are NON-QM loans riskier?
They are underwritten differently but still require ability-to-repay review.