# Non-QM loan

> A non-QM loan is a mortgage that doesn’t meet the Qualified Mortgage rules, such as a bank-statement or interest-only loan. Who uses them and why.

URL: https://mortgage-math-us.com/glossary/non-qm-loan/  
Last reviewed: 2026-10-29 · By the MortgageMath US Editorial team

## Quick answer

**A non-QM loan** is a mortgage that doesn’t meet the [Qualified Mortgage](https://mortgage-math-us.com/glossary/qualified-mortgage/) standards — because of a feature, its price or how income is documented — so the lender doesn’t get QM legal protection. A non-QM consumer loan secured by a home must still satisfy the [ability-to-repay rule](https://mortgage-math-us.com/glossary/ability-to-repay/).

## Key facts

| Fact | Value | Source | As of |
|---|---|---|---|
| Longest term a QM can have | 30 years | [CFPB](https://www.consumerfinance.gov/ask-cfpb/what-is-a-qualified-mortgage-en-1789/) | Jan 7, 2025 |
| QM points-and-fees cap (larger loans) | 3% | [CFPB, Federal Register 90 FR 57890](https://www.federalregister.gov/documents/2025/12/15/2025-22773/truth-in-lending-regulation-z-annual-threshold-adjustments-credit-cards-hoepa-and-qualified) | 2026 threshold |

## Common kinds

- **Bank-statement loans** for self-employed borrowers, where income is worked out from deposits rather than tax returns. The lender still has to verify it with reliable third-party records.
- **[Interest-only loans](https://mortgage-math-us.com/glossary/interest-only-loan/)** and loans with terms longer than 30 years.
- **Loans with high points and fees**, above 3% of the loan on larger loans, or priced too far above average rates.
- **Asset-based loans** that qualify you on savings and investments.

Investor loans such as [DSCR loans](https://mortgage-math-us.com/glossary/dscr-loan/) are often sold under the non-QM label, but a loan for a rental you won’t live in is business-purpose credit outside these consumer rules altogether.

## What it means for you

Non-QM isn’t a warning label: plenty of non-QM loans are sound. But no Fannie Mae, Freddie Mac or government standard sets the terms, so rates, down payments and fees vary widely between lenders and are often higher than on a conventional loan. Compare several Loan Estimates line by line. The [interest-only mortgages guide](https://mortgage-math-us.com/loan-types/interest-only-mortgages/) and [mortgages for the self-employed](https://mortgage-math-us.com/blog/mortgages-for-the-self-employed/) cover two common cases.

## Sources

- [CFPB](https://www.consumerfinance.gov/ask-cfpb/what-is-a-qualified-mortgage-en-1789/) — Longest term allowed on a Qualified Mortgage (Jan 7, 2025)
- [CFPB, Federal Register 90 FR 57890](https://www.federalregister.gov/documents/2025/12/15/2025-22773/truth-in-lending-regulation-z-annual-threshold-adjustments-credit-cards-hoepa-and-qualified) — Qualified Mortgage points-and-fees cap (loans of $137,958 or more) (2026 threshold)
- [CFPB: What is a Qualified Mortgage?](https://www.consumerfinance.gov/ask-cfpb/what-is-a-qualified-mortgage-en-1789/)
- [CFPB: What is the ability-to-repay rule?](https://www.consumerfinance.gov/ask-cfpb/what-is-the-ability-to-repay-rule-en-1787/)

_General information, not financial advice._