Non-QM Loans
Non-Qualified Mortgage loans for borrowers who don't meet standard agency guidelines. Asset depletion, 1099-only, and other alternative income documentation accepted.
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Non-QM Loan Options in Michigan
Non-QM (non-qualified mortgage) loans are mortgage products that do not meet the Consumer Financial Protection Bureau's definition of a "qualified mortgage" — typically because they use alternative income documentation, have higher DTI ratios, or serve borrowers with recent credit events. Non-QM loans fill the gap between conventional financing and no financing at all for borrowers whose situations do not fit the standard mold.
What Makes a Loan Non-QM?
A qualified mortgage (QM) must meet specific ability-to-repay standards set by the CFPB, including DTI limits, documentation requirements, and loan feature restrictions. Non-QM loans deviate from one or more of these standards — for example, by using bank statements instead of tax returns for income verification, allowing higher DTI ratios, or serving borrowers with a recent bankruptcy or foreclosure. Non-QM does not mean high-risk or predatory — it simply means the loan does not fit the conventional agency box.
Common Non-QM Borrower Profiles
Non-QM loans serve a wide range of borrowers in Michigan, including: self-employed individuals whose tax returns understate their income; real estate investors using DSCR qualification; borrowers who experienced a bankruptcy, foreclosure, or short sale within the past 1-4 years; high-net-worth individuals using asset depletion to qualify; and foreign nationals purchasing U.S. property. The common thread is that these borrowers have the ability to repay but cannot document it in the way conventional lenders require.
Asset Depletion Loans
An asset depletion loan (also called asset dissipation) allows borrowers with significant liquid assets but limited income to qualify for a mortgage by converting their assets into a calculated monthly income stream. For example, a retired borrower with $2 million in investment accounts but minimal W-2 income can use those assets to qualify — the lender divides the asset balance by the loan term (e.g., 360 months for a 30-year loan) to arrive at a monthly qualifying income. This is particularly useful for retirees and high-net-worth individuals in Michigan who are asset-rich but income-light.
Frequently Asked Questions
Who is a non-QM loan for?
Non-QM loans are for borrowers who have the ability to repay but cannot document it through conventional means — including self-employed individuals, real estate investors, borrowers with recent credit events, and high-net-worth individuals with limited income but significant assets.
How soon after a bankruptcy can I get a non-QM loan?
Non-QM lenders typically require a waiting period of 1-4 years after a bankruptcy discharge, depending on the program and the borrower's overall profile. This is significantly shorter than the 2-4 year waiting period required by conventional lenders.
Are non-QM rates higher?
Yes. Non-QM loans carry a rate premium compared to conventional loans — typically 0.5 to 2 percentage points higher, depending on the specific program and risk factors. The premium reflects the non-standard nature of the documentation or borrower profile.
What is an asset depletion loan?
An asset depletion loan allows borrowers with significant liquid assets but limited income to qualify by converting their assets into a calculated monthly income stream. The lender divides the asset balance by the loan term to arrive at qualifying income. It is particularly useful for retirees and high-net-worth individuals.
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