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When your tax returns don’t tell the story
Southern California runs on self-employed people, and the standard mortgage was not built for them. Non-QM loans qualify you on what actually comes in, or on what the property earns, instead of a tax return written to minimize income.
Bank statement loans
For: business owners, contractors, agents, consultants, anyone whose tax returns understate what they earn.
How it qualifies: 12 or 24 months of business or personal bank statements. Deposits are averaged, with an expense factor for business accounts.
What you’ll need: the statements, a business license or CPA letter showing two years of self-employment, and the usual credit and asset documentation.
Good to know: rates and down payments run higher than conventional, so we check whether conventional works first. Often it doesn’t, and this is the loan that gets the house.
DSCR loans
For: investors buying or refinancing rental property, including ADU and small multifamily.
How it qualifies: on the property’s rent versus its payment, the debt-service coverage ratio. No personal income verification, no tax returns, no employment check.
What you’ll need: a lease or a market rent appraisal, reserves, and credit. Many programs allow closing in an LLC.
Good to know: the cleaner the ratio, the better the pricing. We’ll tell you what the property needs to rent for before you make an offer.
Asset depletion
For: retirees and others with significant assets and little reportable income.
How it qualifies: liquid assets are converted into a monthly income figure over the loan term.
Recent credit events
For: borrowers a year or two out from a bankruptcy, foreclosure or short sale who are otherwise solid.
How it qualifies: shorter waiting periods than agency loans, priced for the added risk.
Why a broker matters here
Most non-QM programs are only available through brokers. A retail bank has one set of guidelines; if you don’t fit, the answer is no. We work with multiple non-QM lenders, each with different rules on statements, reserves, credit events and property types. When one says no, we usually know who says yes.
The honest trade-off: non-QM money costs more than agency money. We’ll always run the conventional and FHA options first, and only move to non-QM when they don’t work or when the non-QM structure is genuinely the better deal for you.
Turned down somewhere else?
A conventional denial is often just a documentation mismatch, not a credit problem. Send us the denial reason and the basics and we’ll tell you within a day whether there’s a path.
Send the basics