Which Groups are Getting the Most Non-QM Home Loans?

According to recent statistics, mortgage loan originations are still about 20% below pre-pandemic production levels despite continuing to grow since 2020. In 2024, loan origination overall grew about 20%, with the non-QM market taking up a massive 5% of those loans.

This shift shows that more consumers are looking for alternative lending options, especially when it comes to massive purchases like a home. In 2020, only about 3% of all mortgage loans were non-QM. In 2024, these non-QM loan originations were up 10% compared to 2019 levels.

By the end of 2025, industry experts foresee that non-QM production will expand by around 30%.

Non-QM growth is reflective of greater shifts that are continuing to impact society. For one, around one in ten working adults is now classified as self-employed. That means about 15 million Americans have non-traditional streams of income. Earning a 1099 income makes it more difficult to prove to a lender that you have a steady, reliable source of consistent income because you aren’t getting consistent paychecks. Due to this fact, self-employed individuals, even those who earn substantial incomes, may struggle to obtain a mortgage.

According to industry experts, another factor driving non-QM home loan growth is that many real estate investors are looking for debt-service coverage ratio (DSCR) loans to finance their purchases rather than paying in cash. These types of loans qualify borrowers based on the property’s rental income instead of a borrower’s personal income. These types of non-QM home loans are preferable for investors because they allow them to leverage capital to earn a profit faster. When investors pay cash for a property, it ties up a lot of capital into a single asset.

Statistically speaking, there are five main groups that continue to drive non-QM home loan growth including:

• Self-employed individuals
• Real estate investors
• Asset rich households
• Foreign nationals
• Credit-event “come back”

Non-QM home loans are also often sought out by individuals with unique income streams. Another great feature of non-QM loans is that lenders can tailor their loans to meet the needs of applicants, which is far more attractive than lenders who set strict standards and then want borrowers to meet those standards.

One interesting thing to note is that non-QM borrowers had an average FICO score of 776 in 2024, which is similar to the average FICO score of conventional mortgage borrowers. This fact proves that non-QM borrowers are not necessarily “riskier” than traditional mortgage borrowers.

For 2026, industry experts expect non-QM loan originations to continue to blossom even further. They expect double-digit non-QM growth throughout the year.

Are You Looking for a Non-QM Home Loan?

Non-QM Home Loans bridges the gap for consumers who want to get a home loan but don’t meet traditional eligibility requirements. Our team specializes in providing solutions and answers to facilitate consumer’s home ownership dreams.

Are you interested in getting started? Use our interactive menu now to get a better idea of our options based on your specific needs.