Non-QM loans expand financing for investors and self-employed buyers excluded from conventional boxes, offering flexible underwriting based on assets, bank statements, or rental income rather than rigid DTI and tax returns—perfect for scaling in the Colorado housing market’s balanced phase. With 15+ years in Denver real estate and thousands of transactions, I’ve placed clients into non-QM options for Littleton real estate rentals and Highlands Ranch flips, where traditional loans fall short amid metro growth and HOA complexities.
What Makes Non-QM Different
Unlike Fannie/Freddie’s strict 43% DTI caps, non-QM lenders assess “alternative” docs: 12-24 months bank statements (avg. 75% deposits as income), asset depletion (liquid reserves / 360), or DSCR (property cash flow covers 1.0-1.25x debt). Rates run 0.5-2% higher (7-9% now), terms 5-30 years. No MI required over 80% LTV, but expect 1-2% origination.
Ideal for 1099 earners, foreign nationals, or recent job changers common in Denver real estate tech booms.
Common Non-QM Programs
- Bank Statement Loans: Self-employed prove income via deposits; 10-20% down.
- Asset-Based: Retirees tap securities; qualifies $1M portfolio for $500K loan.
- DSCR: Investment properties standalone—rents justify, personal income irrelevant.
- ITIN/Foreign National: No SSN needed; higher rates, 30-40% down.
Colorado edge: multi-unit DSCRs shine near DTC, where $3K rents cover $800K triplex PITI.
Denver-Specific Insights
In Highlands Ranch real estate, HOAs ($300+/mo) inflate reserves—non-QM’s flexibility navigates this without 12-month pits. Littleton real estate investors use them for BRRRR cycles, pulling equity post-rehab sans seasoning. 2026 forecasts of softening sales favor borrowers; lock before inventory rises.
Program Comparison Table
Practical Advice from Closings
Shop 3-5 lenders; non-QM isn’t commoditized—rates vary 1%. Pre-qualify with asset proofs ready; Colorado’s 3-day objection period demands clean apps. Layer with LLCs for liability; audit rental comps via Rentometer. Avoid over-leverage—aim 1.25x coverage. I’ve guided dozens this way, turning transactions into enduring client friendships.
Stack non-QM with seller credits for rehabs. Time for rate dips; monitor MBS weekly.
If you’d like honest guidance, market insight, or a no-pressure conversation about non-QM options and your situation, reach out—I’m here. Visit www.MileHighHomeGroup.net to search properties, explore Denver, learn more about me and connect.
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