Non-QM (non-qualified mortgage)
Short for non-qualified mortgage. A home loan that falls outside the underwriting guidelines set by Fannie Mae and Freddie Mac—and therefore can't be sold to them. Non-QM lenders qualify borrowers using alternative income documentation such as bank statements, rental income (DSCR), or asset depletion instead of standard W-2s and tax returns. They aren't subprime loans; they simply use a different qualifying framework. Because lenders hold more risk, rates are typically higher than conventional loans. Learn about DSCR loans →