Alternative Mortgage Loans Your Bank Doesn’t Offer

When it comes to financing real estate, not everyone fits the mold of a traditional mortgage. Fortunately, there are loan programs designed specifically to meet the needs of investors, self-employed professionals, and borrowers with nontraditional income. Known as Non-QM (non-qualified mortgage) loans, these alternative mortgage loans open doors to homeownership and investment opportunities that might otherwise feel out of reach. 

At MBA Mortgage, we work with a wide range of Non-QM programs. Here’s a quick look at some of the most popular options and why borrowers are turning to them.

What Are Non-QM Loans?

Non-QM loans are simply mortgage programs that don’t follow the standard Fannie Mae or Freddie Mac guidelines. Instead, they use more flexible ways to evaluate a borrower’s ability to repay. That could mean looking at bank deposits instead of tax returns, or judging a rental property by its cash flow instead of the borrower’s income.

These programs are appealing because they’re designed for real-world situations — especially for real estate investors, self-employed borrowers, and independent contractors who may not qualify through traditional underwriting.

DSCR Loans: Built for Investors

Why they’re appealing: Approval is based on the property’s income, not your personal income.

For investors, DSCR (Debt Service Coverage Ratio) loans are one of the most powerful tools available. If the property’s rental income covers its expenses, you can qualify — even if your tax returns show little income due to write-offs. This makes DSCR financing especially attractive for investors building larger rental portfolios.

Bank Statement Loans: Flexibility for the Self-Employed

Why they’re appealing: Your actual cash flow is used to qualify, not your taxable income.

Entrepreneurs, freelancers, and business owners often face challenges with conventional loans because tax deductions lower their reported income. Bank statement loans solve this by using 12–24 months of deposits to determine qualifying income — giving a more accurate picture of financial strength.

1099 Loans: For Independent Contractors

Why they’re appealing: Lenders accept 1099 income directly, without requiring W-2s or full tax returns.

Commission-based professionals, gig workers, and contractors who receive 1099s can benefit from these programs. By recognizing contract income as stable and reliable, 1099 loans create a simpler path to financing.

Other Non-QM Options

Non-QM is a broad category, with solutions for many unique situations. Some programs allow you to qualify based on assets, others offer higher loan amounts outside conventional limits, and some provide interest-only payment options. These alternative mortgage loans give borrowers flexibility when their finances don’t fit neatly into a standard box.

Key Takeaways

• DSCR loans help investors qualify based on property income.
• Bank statement loans work for self-employed borrowers with strong cash flow.
• 1099 loans create opportunities for contractors and commission earners.
• Other Non-QM products add flexibility for unique financial profiles.

Final Thoughts

Whether you’re scaling an investment portfolio or navigating homeownership with nontraditional income, there are mortgage options available beyond the standard W-2 and tax return approach. At MBA Mortgage, we specialize in guiding clients through these alternative financing programs and helping you choose the one that fits your goals best.

Want to see more ways to finance your next home or investment property? Explore more of our loan options here.

Contact us today to explore Non-QM and investment property loan solutions that can make your next purchase possible.