Non-QM loans, short for Non-Qualified Mortgage loans, are types of mortgages that don’t meet the strict standards set by government agencies like Fannie Mae and Freddie Mac.

These loans are designed for borrowers who might not qualify for traditional mortgages due to factors like self-employment, fluctuating income, credit criteria or a high debt-to-income ratio.

In simpler terms, non-QM loans provide options for people who don’t fit into the typical mortgage lending criteria.

Lenders offering non-QM loans are willing to take on a bit more risk by considering alternative factors when assessing a borrower’s eligibility, making homeownership accessible to a broader range of individuals.