Alternative Loan Programs
Alternative Loan Programs
Not every borrower fits neatly into a conventional or government loan box, and that's where alternative loan programs come in. Alternative loans, sometimes called non-QM loans, verify income and assets in different ways, such as bank statements, rental income, 1099s, or personal assets, instead of relying only on tax returns and W-2s. Whether you're self-employed, a real estate investor, or buying with an ITIN, we compare options across our network of lenders to find a program that fits how you actually earn and hold your money.
Designed for self-employed borrowers, bank statement loans let you qualify using personal or business bank deposits instead of tax returns, a common solution for business owners whose tax write-offs make their income look lower than it actually is.
Key Requirements & Features
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Minimum credit score: Typically 620+ (varies by lender)
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Down payment: Usually 10-20%, depending on credit and loan amount
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Income documentation: 12-24 months of personal or business bank statements, in place of tax returns or W-2s
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Property types: Primary residences, second homes, and investment properties may all qualify
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Best for: Self-employed borrowers, small business owners, and 1099 contractors whose tax returns don't reflect their full earning power
DSCR (Debt Service Coverage Ratio) loans are designed for real estate investors and qualify based on the property's rental income rather than your personal income, meaning no tax returns or personal income verification required.
Key Requirements & Features
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Minimum credit score: Typically 620+ (varies by lender)
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Down payment: Usually 20-25%
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Qualification: Based on the property's rental income covering (or exceeding) the mortgage payment, rather than personal income or employment history
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Property types: Investment properties only, not available for primary residences
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Best for: Real estate investors building or expanding a rental portfolio, especially those who are self-employed or have multiple properties that complicate traditional income qualification
Not the best fit if: you have straightforward W-2 income and strong tax returns, or you're purchasing a primary residence for personal use, in those cases, a conventional or FHA loan likely offers better rates and terms. In those cases, our conventional or FHA loan programs may be a better fit
What is a non-QM loan?
A non-QM (non-qualified mortgage) loan is a mortgage that doesn't follow the standard documentation rules used for conventional and government loans. It lets lenders look at income and assets in other ways, which helps self-employed borrowers, investors and others who don't fit a traditional box.
Who are alternative loans for?
They're a good fit for self-employed borrowers, business owners, 1099 contractors, real estate investors, borrowers with an ITIN, and anyone whose tax returns don't reflect their full earning power.
Do alternative loans have higher rates than conventional loans?
Alternative loans often carry higher rates when you go through a single lender. Because we compare options across our network of lenders, we're frequently able to find rates that are competitive with conventional pricing. We'll show you real numbers so you can compare for yourself.
How do I get started?
As a licensed Arizona mortgage broker, we compare alternative loan options across our network of lenders, reach out for a free consultation to talk through your situation.
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