Sacramento has a large self-employed population - restaurant owners in Midtown, contractors across the metro, real estate investors building rental portfolios. Many of these buyers don't fit traditional W-2 income documentation. Non-QM (non-qualified mortgage) programs exist for exactly this scenario.
Self-employed Sacramento borrowers whose tax-return income (after legitimate deductions) doesn't reflect their actual cash flow. Real estate investors who want to qualify on rental income rather than personal income. Asset-rich, income-light borrowers (retirees, business owners with significant assets). Recent credit-event borrowers (post-foreclosure or bankruptcy seasoning shorter than QM requires).
Bank statement Non-QM loans calculate income from 12 or 24 months of business or personal bank statements. 24-month programs typically price better than 12-month because they show more income stability. Sacramento buyers often choose 12-month when income is recent or growing, 24-month when income is steady.
DSCR (Debt-Service Coverage Ratio) loans qualify Sacramento investor properties on the rental income alone, not personal income. A DSCR of 1.0 means rent equals mortgage payment; 1.2 means rent exceeds payment by 20%. Typical: 20-25% down, 660-680+ credit. No employment verification.
P&L Only programs use a CPA-prepared profit and loss statement instead of bank statements. Asset-depletion programs use the borrower's liquid assets divided by a number of months to create a calculated income. Both are higher-LTV-tier Non-QM products.
Non-QM pricing typically runs 0.5-1.5% above conforming QM rates, depending on documentation type, credit, LTV, and property occupancy. Down payments typically start at 10-15% for primary, 20-25% for investment.
Choosing a 12-month bank statement program when 24-month would price better. Ignoring DSCR for investment properties when it would qualify easier than personal-income Non-QM. Not modeling the refinance exit when rates change. Picking the wrong asset-depletion calculation period.
Non-Conforming means above the FHFA conforming limit (jumbo). Non-QM means non-qualified-mortgage - using alternative documentation. A loan can be both Non-Conforming AND Non-QM (jumbo bank statement) or one without the other.
Yes. Most Non-QM programs allow primary, second home, and investment. Pricing and LTV vary by occupancy.
Most Non-QM programs start at 620-660. Best pricing typically at 700+. Some programs go lower with compensating factors.
Typically 0.5-1.5% above conforming QM. The premium reflects the alternative documentation and higher risk profile.
Yes, if your tax-return income, credit, and equity position later qualify under QM guidelines. Many borrowers use Non-QM as a bridge until they can qualify conventional.
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Disclaimer: This page is for educational purposes only and is not a commitment to lend or guarantee of approval. Loan programs, rates, terms, eligibility, and program availability are subject to change and depend on credit, income, assets, property, occupancy, location, and underwriting. Not all borrowers will qualify. Individual results vary. Equal Housing Opportunity. PRMG Mortgage. NMLS #75243. Ken Clark Jr. NMLS #225375. Licensed in 49 states, excluding New York.