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Happy Mortgages

Loan programs, explained

What each program is, who it tends to fit, what it usually asks for, and where it gets hard. Jargon gets explained the first time it shows up.

The scope today

Currently originating non-QM financing for investment and second-home properties. Program availability depends on credit approval, underwriting, and property eligibility. Nothing here is an offer of terms.

First, the term

What non‑QM means

Non-QM means non-qualified mortgage. Under federal consumer-mortgage rules, a Qualified Mortgage meets criteria around loan features, costs and underwriting. The label describes the loan, not whether a person is qualified to borrow.

A non-QM label alone does not tell you how income will be documented or whether a loan fits. Ask about the specific requirements and terms. Property use also matters: business-purpose credit is generally outside these federal consumer-mortgage rules.

Read the non-QM field guide

Bank statement

Twelve or twenty-four months of deposits, read as what they are.

Instead of asking what you reported on your tax returns, a bank statement loan asks what actually came in. Twelve or twenty-four months of business or personal statements, and the deposits are the income.

Who it tends to fit: Business owners, contractors, agents and consultants whose returns show less income than the business really earns — usually because a good accountant did their job.
What it usually asks for: Complete statements, every page, every month, nothing cropped. A business that is real on paper: a license, a listing, or a letter from your accountant. And a source for any large deposit that doesn’t look like revenue.
Worth knowing: Each program has its own rules about how much of a deposit counts as income, how long the business needs to have existed, and what you bring to the table. Those rules differ by lender, and they change.

Today: investment and second-home properties

Self-employed & 1099

Schedule C income understood instead of penalized.

Programs built for income that arrives through your own business or on 1099s. They qualify you on a profit and loss statement, or on the 1099s themselves, rather than on the bottom line of a tax return.

Who it tends to fit: Independent contractors, commissioned professionals, and owners whose deductions shrink the income a conventional lender can use.
What it usually asks for: The 1099s, or a profit and loss prepared or reviewed by your accountant or tax preparer — usually with bank statements that tell the same story.
Worth knowing: The write-offs that lower your tax bill also lower the income a conventional lender can use. Sometimes the answer is a different program; sometimes it’s planning next year’s return. None of this is tax advice — your accountant owns that conversation.

Today: investment and second-home properties

Asset depletion

The portfolio does the qualifying. You keep the positions.

Instead of a paycheck, the program looks at eligible savings and investment accounts and turns them into an income figure the loan can be measured against.

Who it tends to fit: People living on what they’ve built rather than what they earn: retirees, early retirees, and anyone whose balance sheet is strong while their income is irregular.
What it usually asks for: Recent statements for each account, showing who owns it and that the money is there and reachable.
Worth knowing: Which accounts count, and how much of each, varies by program. Retirement and investment accounts are often weighed differently from cash.

Today: investment and second-home properties

DSCR

The property’s own cashflow carries the file.

DSCR stands for debt service coverage ratio. Strip the jargon and it’s one question: does the rent cover the payment? For an investment property, some programs qualify the loan on that question alone.

Who it tends to fit: Investors buying or refinancing rentals — including those growing a portfolio, and those whose own income is complicated.
What it usually asks for: A lease or an appraiser’s rent survey, credit, reserves (cash left after closing), a property that appraises, and — if you hold it in an LLC — the entity documents.
Worth knowing: It’s for a rental, full stop. Using it for a home you plan to live in is the kind of shortcut that ends badly for everyone, and I won’t structure it.

Today: investment and second-home properties

Jumbo

Large balances that need structuring, not sorting.

A jumbo loan is larger than the conforming loan limit — the ceiling on loans Fannie Mae and Freddie Mac will buy — so each investor underwrites it to its own guidelines instead.

Who it tends to fit: Buyers and owners of higher-priced investment properties and second homes.
What it usually asks for: More documentation than a smaller loan, reserves after closing, and a full appraisal. Some investors ask for a second one.
Worth knowing: Guidelines vary widely from one investor to the next, so the same file can read very differently depending on where it goes.

Today: investment and second-home properties

Foreign national & ITIN

No Social Security number, still a real borrower.

Related programs for borrowers outside the usual paperwork. Foreign national loans are for buyers who aren’t U.S. citizens or residents. ITIN loans are for people who file U.S. taxes with an Individual Taxpayer Identification Number instead of a Social Security number.

Who it tends to fit: International investors buying here, and taxpayers without a Social Security number who are building a U.S. property history.
What it usually asks for: A passport, a visa or an ITIN letter; proof of income and of the money for closing, which may come from outside the U.S.; and, where there’s no U.S. credit history, other ways of showing how you’ve paid your bills.
Worth knowing: Documents from abroad may need translating or certifying, and the money for closing needs a clear paper trail. Start the paperwork early.

Today: investment and second-home properties

Terms, plainly

A little less jargon

DSCR: Debt service coverage ratio: how a rental’s income compares with its full payment, taxes and insurance included.
Profit and loss: A summary of what a business brought in and spent over a period. Often shortened to P&L.
1099: The tax form an independent contractor receives instead of a W-2.
ITIN: An Individual Taxpayer Identification Number, issued by the IRS to people who file taxes without a Social Security number.
Reserves: Money left in your accounts after closing.
Conforming loan limit: The largest loan Fannie Mae and Freddie Mac will buy. Above it, a loan is jumbo.
Underwriting: The lender’s review of the whole file — income, assets, credit, and the property.
Letter from your accountant: A short letter confirming the business exists and how long you’ve run it. Some programs ask for one.

Search the full mortgage glossary

Not sure which one describes you?

That’s normal, and it’s my job rather than yours. Send the outline — no documents, no credit pull — and you’ll hear which way it points and where it gets hard.

Write in (704) 737-4567 — Amina