Non-QM (non-qualified mortgage) refers to loans that don't meet the Consumer Financial Protection Bureau's Qualified Mortgage rule, which Fannie Mae and Freddie Mac follow. Non-QM is not subprime — it's full underwriting with alternative documentation methods.
Common Non-QM products include bank statement loans (qualify on deposits, not tax returns), DSCR loans (qualify on property cash flow), asset-depletion loans (qualify on net worth), 1099 loans, and ITIN loans for borrowers without Social Security Numbers.
Pricing is typically 0.5%–1.5% above conventional. Down payments are 10–25%. Reserve requirements are usually higher. In exchange, you get qualification flexibility no conforming product can match.