Non-QM loans are the reason a growing number of lenders have stopped asking what your tax return says you earn. I have been buying real estate in Savannah since 2004. I financed deals through 2008, through COVID, and through the 2024–25 short-term rental consolidation. So when a lender tells me something is new, I check the fine print and usually find a repackaged version of something that already existed.
This is not that.
A local lender I work with, Gabe Santin at Guild Mortgage, walked me through a shelf of alternative-documentation programs I had not seen assembled this way before. His office is here in Savannah and he is licensed in multiple states, so he sees what actually clears underwriting across markets rather than what a rate sheet claims. What he showed me is worth your attention if you are self-employed, commission-based, or an investor who takes every legitimate deduction available.
What non-QM loans actually are
A qualified mortgage, or QM, follows a federal documentation standard built around W-2 pay stubs and tax returns. Non-QM loans sit outside that box on purpose. The lender still verifies your ability to repay. However, it verifies that ability with a different set of documents: bank deposits, gross 1099 income, a CPA-prepared profit and loss statement, liquid assets, or the rent the property itself collects.
In other words, non-QM does not mean unqualified. It means differently qualified.
The problem was never your income. It was your documentation.
Here is the situation I see constantly with business owners and investors. You run a profitable operation. You have real cash flow, real reserves, and a real balance sheet. Then your CPA does exactly what you pay them to do, and your Schedule C shows a fraction of what actually moved through your accounts.
Conventional underwriting reads that number and says no.
That is not a judgment about your finances. It is an artifact of a standard built for employees. Non-QM loans exist because a meaningful slice of creditworthy borrowers is invisible to that standard. Lenders have finally decided that slice is worth competing for.
You are not shopping for a rate. You are shopping for an underwriting formula. That sentence is the entire point of this article. Hold onto it.
Five non-QM loans, side by side
Now the part that matters. Here is how each program actually calculates the number.
1. Asset depletion (asset utilization)
This is the one I find most interesting, because it changes the question. Instead of asking how much you earn, the lender asks how much you have. Then it converts eligible liquid assets into a hypothetical monthly income.
The divisor is the whole ballgame. One current NASB program divides eligible assets by 84 months:
Meanwhile, A&D Mortgage currently advertises a 60-month divisor on the same math:
Same money. Same borrower. A roughly 40 percent difference in what you qualify for, driven entirely by a number in a guideline document.
Now compare that to the conventional version. Fannie Mae does have an employment-related-assets provision, and it is dramatically tighter. Per the Fannie Mae Selling Guide section B3-3.4-06, the lender divides net documented assets by the amortization term in months. That is 360 on a 30-year loan, after subtracting any early withdrawal penalty plus the funds used for down payment, closing costs, and reserves. Fannie’s own worked example turns a $500,000 IRA into $972.22 per month of qualifying income.
Run our $1.2 million through that formula and you get roughly $3,333 per month, before the required subtractions. Against $20,000 on a 60-month divisor, that is not a rounding difference. That is a different loan approval.
The conventional version also caps at 70 percent LTV, or 80 percent if the asset owner is at least 62 at closing. Furthermore, it is limited to principal residences and second homes on purchases and limited cash-out refinances.
Two other things are worth knowing about the non-QM version:
- The assets generally do not have to be spent, liquidated, or pledged to the lender. Mbanc, for example, states specifically that the assets remain invested. They document capacity to repay. They are not collateral you hand over.
- Expect haircuts by account type. Checking and savings commonly count at 100 percent. Stocks and mutual funds often count around 70 percent, and retirement accounts frequently land near 70 percent as well. NASB, for instance, publishes 70 percent on stocks, options, and mutual funds. Formulas vary by lender, and they vary a lot.
Who this is built for: the borrower who deliberately keeps taxable income low but holds significant liquidity across brokerage accounts, CDs, and retirement assets. If that describes you, you have been leaving qualifying capacity on the table.
2. The 1099-only non-QM loan
Are you a real estate agent, a commissioned salesperson, a consultant, or an independent contractor? Read this one twice.
Conventional underwriting takes your income after Schedule C deductions. By contrast, some of these programs qualify you on the gross number printed on the 1099. Several lenders currently advertise using approximately 90 percent of gross 1099 income.
$180,000 ÷ 12 = $15,000 per month of qualifying income
Suppose your tax return showed $90,000 of taxable income after expenses. Conventional underwriting hands you about $7,500 per month. Same year, same work, roughly double the qualifying income — because of which line the lender reads.
Some programs work with a single year of 1099 history. Mbanc says it can accept one or two years, and NASB currently offers a 1099-NEC program without conventional tax-return documentation. Requirements vary, so ask directly rather than assume.
3. The bank statement loan
This is the most established of the non-QM loans, and it comes in two materially different versions that people constantly confuse.
Personal bank statement. If your self-employment income lands in your personal account, qualifying income can be close to the average of eligible deposits over 12 or 24 months. One current program calculates it exactly this way:
Business bank statement. Here the lender correctly recognizes that business deposits are gross revenue, not personal income. Therefore it applies an expense factor:
That expense factor is the single most negotiable number in this entire category. Some lenders reduce it when a CPA or qualified third party documents that the business genuinely runs leaner than the default assumption. A 50 percent factor versus a 30 percent factor on the same deposits is a five-figure swing in monthly qualifying income. If you shop one thing between lenders, shop this.
Programs commonly allow 12 or 24 months of statements with no tax returns used for income qualification. In some cases they reach roughly 90 percent LTV for very strong owner-occupied borrowers. Investment-property LTVs are meaningfully less generous.
4. The P&L-only loan
This one gets less discussion, and it belongs on the list. Some non-QM lenders qualify a self-employed borrower from a profit-and-loss statement prepared by a CPA or tax preparer. No tax returns. No 12 to 24 months of bank statements. Georgia wholesale lenders are actively advertising P&L-only programs alongside 1099, bank statement, DSCR, and asset-utilization loans.
For a business owner whose books are clean and whose deposit patterns are lumpy or seasonal, this route can outrun the bank statement version.
5. DSCR: still where I start on a rental
For an investment property, my default is still DSCR. There is no reason to drag your personal income into the file when the property qualifies on its own rents. It is cleaner, it is faster, and it keeps your personal documentation available for the next loan. Run the rents through our property ROI calculator before you talk to anybody about financing.
The other non-QM loans get interesting when DSCR does not work, when the numbers do not favor it, or when you are buying a primary residence or second home. DSCR is not on the table at all for those.
The catch with non-QM loans
These are not magic loans. Non-QM lenders price for the flexibility, and they collect it through some combination of a higher interest rate, a larger down payment, bigger reserve requirements, a stronger credit profile, and lender fees or points.
They are also far less standardized than Fannie and Freddie underwriting. NASB currently shows figures in this range:
- Bank statement: 700 FICO, as little as 10 percent down in certain scenarios
- 1099: 700 FICO, 20 percent down
- Asset depletion: 700 FICO, 20 percent down, with published loan minimums and maximums
- DSCR: 700 FICO, 20 percent down
Those are one lender’s guidelines. They are not industry standards, and treating them as such is how people waste a month on the wrong application.
A 7.5 percent loan that recognizes $20,000 a month of income is worth more than a 6.75 percent loan that tells you that you do not qualify. Rate matters. Rate matters second.
How I would sequence non-QM loans on a deal
For an investment property: start with DSCR. If that does not work or does not pencil, compare 1099 against bank statement against P&L against asset utilization. Take whichever produces the highest qualifying income at acceptable pricing.
For a primary residence or second home: DSCR is out. The comparison then runs P&L, bank statement, 1099, and asset depletion, and this is where the divisor and expense-factor differences between lenders decide the outcome.
The work is not picking the product. The work is running your actual numbers through four or five formulas and seeing which one your financial life fits best. That is a conversation with one of the local Savannah lenders who carries more than one of these programs. It is not a rate quote.
What non-QM loans tell me about this market
Lenders build products like these when they want volume and the standard box is not producing it. Competition has moved from the rate sheet to the guideline document. That shift favors exactly the kind of borrower most likely to be reading this: a business owner or investor with real assets, real cash flow, and a tax return engineered to be unimpressive.
I am one of those borrowers. I write off everything I am legitimately entitled to write off, and I have no intention of changing that to please an underwriter. It is useful to watch the industry finally build around people who think this way instead of penalizing them for it.
One caution from someone who has watched a full cycle. Easier qualification is not permission to overleverage. I am debt-averse by choice, and I have watched overleveraged investors hand back portfolios in downturns while the disciplined ones kept buying. Qualifying for more is not the same as borrowing more. Run the deal on cash flow, not on the size of the approval. If you are still deciding where to put the money, start with whether Savannah is a good market for what you are trying to do.
Non-QM loans FAQ
What is a non-QM loan?
A non-QM loan is a mortgage that does not meet the Qualified Mortgage documentation standard. Most often that is because the lender qualifies the borrower using something other than taxable income from a tax return: bank deposits, gross 1099 income, a CPA-prepared profit and loss statement, liquid assets, or the rental income of the property itself.
How does an asset depletion mortgage calculate income?
The lender totals eligible liquid assets, applies haircuts by account type, then divides the result by a set number of months. That produces a monthly qualifying income figure. Divisors vary widely by lender. One current program uses 84 months and another advertises 60 months, while the conventional Fannie Mae version divides by the full amortization term instead, which produces a far smaller number.
Can a self-employed borrower get a mortgage without tax returns?
Yes. Several current program types qualify self-employed borrowers without using tax returns for income. Those include bank statement loans based on 12 to 24 months of deposits, 1099 loans based on gross 1099 income, and P&L loans based on a CPA-prepared profit and loss statement. Guidelines, credit minimums, down payment requirements, and pricing vary by lender.
Should an investor use a DSCR loan or another non-QM loan?
For a pure rental acquisition, DSCR is usually the first comparison. The property qualifies on its own rental income and the borrower’s personal documentation stays out of the file. Other non-QM loans become more relevant when DSCR does not work, or when the purchase is a primary residence or second home, where DSCR is not available.
Are non-QM loans available in Georgia?
Yes. Georgia wholesale and retail lenders actively place bank statement, 1099, P&L, asset depletion, and DSCR programs on Savannah-area property. Availability still depends on the lender, the borrower, the property type, and the state, so confirm current terms before you write an offer.
Where to go from here
For the loan products themselves — which programs he can actually place, current divisors, expense factors, pricing, and what your file would qualify for — talk to Gabe Santin at Guild Mortgage. He is the one who put these non-QM loans on my radar.
For the real estate itself — what to buy in Savannah, what it will actually rent for, and whether the deal survives underwriting before you finance it — that is my side of the table. Reach out anytime, whether you are buying your first Savannah property or your fifteenth. You can also call (912) 600-2893.
Financing gets you to the closing table. The deal determines whether that was a good idea. Bring me the second question and I will help you answer it honestly, including when the answer is no.
About the author
Julie Gates is a licensed Georgia real estate broker and has been investing in the Savannah, GA market since 2004, through the 2008 downturn, COVID, and the 2024–25 short-term rental consolidation. Her personal portfolio spans single-family, multifamily, commercial, and self-storage assets across roughly 85 doors. She leads Team 912, an all-investor real estate team in Savannah where every member carries their own portfolio, and operates Sid Was Here, which manages more than 100 properties and has hosted over 50,000 guest bookings across short-term, long-term, and commercial assets. She is a contributor to the BiggerPockets book The 30-Day Stay (2023), a Forbes Business Council member, and a Goldman Sachs 10,000 Small Businesses alumna.
Sources referenced in this article include current published program information from NASB, A&D Mortgage, Mbanc, CrossCountry Mortgage, Total Quality Lending, Cake Mortgage, and the Fannie Mae Selling Guide section B3-3.4-06 on employment-related assets as qualifying income (effective March 4, 2026). Lender guidelines change frequently, so verify current terms directly with the lender.
This article is general market commentary based on the author’s experience as an investor and broker. It is not lending, legal, tax, or financial advice, and no loan approval, rate, term, or qualification outcome is promised or implied. Loan product availability, guidelines, and pricing vary by lender, borrower, property, and state, and are subject to change. Consult a licensed mortgage professional regarding your specific situation and your CPA regarding tax matters.
