Conventional if you can document income traditionally and qualify (cheapest). Non-QM if you can't but can still prove you'll pay. Then, within non-QM: deposits → bank statement, rental income → DSCR, assets → asset qualifier, 1099s → 1099 loan. See Eligibility.
On this page
Non-QM vs conventional, jumbo & government
| Feature | Non-QM | Conventional | Jumbo | Govt (FHA/VA) |
|---|---|---|---|---|
| Income proof | Deposits/rents/assets | Tax returns, W-2 | Full docs | Full docs |
| Tax returns? | Usually no | Yes | Yes | Yes |
| Rate | +0.5–2% | Lowest | Near conforming | Low |
| Mortgage insurance | None | PMI <20% | Varies | MIP/fee |
| Best for | Non-box income | W-2, docs fit | Luxury, docs fit | Low down / vets |
The rule: if you can qualify conventional/jumbo/government with standard docs, that's usually cheaper — use it. Non-QM earns its premium precisely when those doors are closed by how you earn, not by your creditworthiness.
The non-QM programs side by side
| Program | Qualifies on | Best for | Occupancy |
|---|---|---|---|
| Bank Statement | 12–24 mo deposits | Self-employed w/ write-offs | Primary/2nd/inv |
| DSCR | Property rent (PITIA) | Investors, portfolios | Investment only |
| Asset Qualifier | Liquid assets ÷ term | Retirees, high-net-worth | Primary/2nd/inv |
| 1099 | 1–2 yrs of 1099s | Contractors, gig | Primary/2nd/inv |
| P&L | CPA P&L | Established self-employed | Primary/2nd/inv |
| ITIN | ITIN + income proof | No-SSN borrowers | Primary/2nd/inv |
| Foreign National | Foreign income/assets | Non-resident buyers | 2nd/investment |
The decision framework
Work top to bottom — the first match is usually your answer:
Can you qualify conventionally?
Standard docs, income fits, DTI works → conventional (or jumbo if large). Cheapest. Stop here if yes.
Are you buying an investment property?
Qualify on the rent, not yourself → DSCR. LLC vesting, no property cap.
Are you self-employed with strong deposits?
Write-offs shrink taxable income → bank statement (or P&L).
Asset-rich, income-light?
Wealth in accounts → asset qualifier.
Paid on 1099s, or no SSN, or foreign?
1099, ITIN, or foreign national respectively.
Non-QM comparison FAQs
Non-QM or conventional?
Conventional if your income documents traditionally and qualifies (cheaper). Non-QM if it doesn't but you can still prove you'll pay.
Best for the self-employed?
Usually bank statement — qualifies on deposits, not net taxable income.
Best for investors?
DSCR — qualifies on the property's rent, LLC vesting, no property cap.
Assets but little income?
Asset qualifier — converts liquid assets into qualifying income.
How do I choose?
Start with how you earn; we match the program and confirm conventional isn't cheaper first.
Reviewed by the licensing team at Save Financial, a California-licensed mortgage brokerage (NMLS #377740, DRE #01875766) founded in 2009 and serving all 58 counties from offices in Newport Beach and Marina del Rey.