Non-QM Loans For Homebuyers Who Cannot Qualify For Conforming Loans
Non-QM Loans are nonconforming home mortgage loan programs benefiting homebuyers and real estate investors who cannot qualify and/or use a traditional home loan. Non-QM mortgages are not hard money loans. Mortgage rates may be slightly higher than government and/or conventional loans. Hard money loans are illegal on residential mortgages due to their high fees and costs. Mortgage borrowers who do not qualify on government and/or conventional loans can benefit from using Non-QM loans. There are many different types of Non-QM mortgage programs.
Traditional Mortgages Versus Non-QM Loan Programs
We will go over the basic non-QM loan programs that are very popular at Capital Lending Network, Inc. Homebuyers possible who can not qualify for FHA, VA, USDA, and Conventional loans can now qualify for non-QM loans. Down payment requirements are higher and mortgage rates are higher on non-QM loans than on conforming mortgages. Capital Lending Network, Inc. now offers no-doc mortgages with a 20% down payment. No-doc mortgages are alternative loan programs where income tax returns or income documentation is not required.
In this article, we will discuss and cover qualifying with Non-QM Loans For Homebuyers Who Cannot Qualify For Conforming Loans.
Traditional Conforming Versus Non-QM Loans
Lenders halted in offering non-traditional nonconforming home mortgages after the 2008 housing meltdown and economic crisis. Traditional conforming loans are government and conventional loans. There are three government-backed loans: FHA, VA, USDA. Government loans are for primary owner-occupant home financing only. Conventional loans allow for primary owner-occupant home financing, second homes, and investment property loans. Non-QM loan programs allow for primary owner-occupant homes, second homes, and investment property financing that do not have to conform to government and/or conventional loan agency guidelines. Conventional loans are not government-backed loans. However, lenders require conventional loans to conform to Fannie Mae and/or Freddie Mac Agency Mortgage Guidelines. This is why conventional loans are often referred to as conforming loans. Non-conforming loans are portfolio loans. Each lender will set its own lending requirements.
The Role Of Fannie Mae And Freddie Mac
Fannie Mae and Freddie Mac are the two government-sponsored enterprises (GSE) mortgage giants that are the two largest buyers of mortgages from lenders. The role of Fannie Mae and Freddie Mac is to provide liquidity in the mortgage markets by purchasing mortgages funded by lenders. Lenders need to sell the mortgage they fund through their warehouse line of credit in order to pay it down so they can originate and fund more loans. Fannie Mae and Freddie Mac will not purchase mortgages that do not conform to their agency mortgage guidelines.
Government and conventional loans have set agency mortgage guidelines which many disqualify many borrowers. Non-QM loans are alternative mortgage loan programs. These loans are not backed by any government agency. They are portfolio loans. Many non-QM mortgage lenders either keep the loans they fund in-house or they may sell packaged mortgages to large financial institutions or hedge funds. Non-QM mortgages are now back and in full force. Today’s non-QM loans are in no way like the subprime mortgages that was the cause of the 2008 financial crisis. Today’s non-QM mortgages are fully regulated like government and conventional loans and were launched with consumer protection in mind as well as to protect investors that purchase mortgages on the secondary mortgage bond market. Capital Lending Network, Inc. offers over dozens of non-QM mortgage loan programs. Some of our popular non-QM loan programs are no-documentation mortgages, 12 months bank statement mortgages, asset depletion loans, P and L mortgages, and many other non-QM loans benefiting those who do not qualify for government and/or conventional loans. No-doc loans used to be the most popular loan program prior to the 2008 financial crisis. It has now come back to the marketplace.
What Are Non-QM Loans
Borrowers who cannot qualify for government and/or conventional loans often ask about non-conforming loan programs they may qualify for. The answer is Non-QM mortgages. So what are non-QM mortgage loans?
Alex Carlucci of Capital Lending Network, Inc. is one of the nation’s top loan originators of Non-QM mortgages. Alex Carlucci defines a non-QM loan as follows:
A Non-Qualified Mortgage (Non-QM loan) is any home mortgage not complying with the Consumer Financial Protection Bureau’s existing rules on Qualified Mortgages (QM). Usually this type of alternative mortgage loan accommodates people who are not able to prove they are capable of making the mortgage payments. Just because it is a Non-QM mortgage loan does not necessarily mean high risk or subprime mortgage risk. In many cases these Non-QM mortgage loans require a high FICO score but simply do not check all the boxes associated with a QM loan. The main difference between the two types of mortgage loans is that Non-QM loans for mortgages are protected by the lender against any type of lawsuit should you become unable to afford the mortgage loan.
Non-QM mortgages are one of the most popular loan programs at Capital Lending Network, Inc.
Type Of Borrowers Who Benefit From Non-QM Mortgages
Borrowers who benefit from our non-QM loan programs at Capital Lending Network, Inc. are the following types of borrowers:
- Homebuyers who are self-employed and do not meet the debt to income ratio requirements due to the massive unreimbursed business expenses
- Homebuyers with a prior bankruptcy and/or foreclosure who have reestablished themselves but do not meet the minimum waiting period requirements after bankruptcy and/or a housing event
- Homebuyers who recently sold their home but cannot qualify for a government and/or conventional loan due to having late mortgage payments in the previous 12 months on their previous mortgage
- Retirees, self-employed, entrepreneurs, and wealthy individuals who have assets but no traditional income and/or regular job
- High-end homebuyers who cannot qualify for traditional jumbo loans
Lending Network, Inc. has lending partnerships with dozens of wholesale Non-QM investors. We are mortgage bankers, correspondent lenders, and has the ability to broker through our wholesale lending partners with non-QM financial institutions and offer various types of non-QM mortgage programs.
Most Popular Non-QM Mortgage Loan Programs At CLN Mortgage Group
There are dozens of different non-QM loan programs offered at Capital Lending Network, Inc. We will just list a few very popular non-QM loan programs in this article. Feel free to contact us at CLN Mortgage Group if you have a unique situation and see if we can help you qualify for a mortgage with one of our non-QM loan programs.
The following are the most popular non-QM mortgage loan programs Capital Lending Network, Inc. offers:
- No-doc mortgages with 20% down payment
- One day out of foreclosure and bankruptcy mortgage loans where there are no waiting period requirements after bankruptcy and/or a housing event
- No-Doc Mortgages on residential primary owner-occupant homes, second homes, and investment properties
- P and L mortgage programs
- 12-month bank statement mortgage loan program with no income tax returns required
- 90% Loan-To-Value Traditional jumbo loans with a 10% down payment, debt to income ratio up to a 50% DTI and credit scores down to a 660 FICO
- Non-QM jumbo loans with credit scores down to 620 FICO
- Late mortgage payments in the past 12 months
- Asset-depletion mortgage loan program
- P and L Only Investment Property Loan Program
- Fix and Flip loans for real estate investors
- Blanket line of credit for investment properties
To qualify and/or see what other types of non-QM mortgage loan programs we offer, please contact us at Capital Lending Network, Inc. at 800-900-8569 or text us for a faster response. Or email us at firstname.lastname@example.org . The team at Capital Lending Network, Inc. is available 7 days a week, evenings, weekends, and holidays.