Please find the latest NQM Guideline updates!
This set of guidelines is applicable to all submissions starting from 11/03/2025. You may find updated guidelines here.
Non-QM Program Changes
Prepayment Penalties:
Added AK to states where prepayment penalties are not allowed.
CLTV Rules: Clarified that Quitclaim Deed with no value conveyed within 12 months = max CLTV 65%.
Tradeline Requirements: Wording updated to “active within 12 months” instead of “remained open.”
Income & Employment:
Added prohibition on ownership structure changes during loan life.
Clarified documentation for self-employed borrowers: min two (2) year employment history is required.
Form 1005 no longer eligible as standalone for standard income documentation.
Business Bank Statements and P&L: Minimum expense ratio 10%
DSCR:
Leases to borrower-owned companies prohibited.
Auto Lease Payments: Now requires 12 months proof if paid by another party/business account (previously 6 months).
Business Debt: Documentation increased from 6 months to 12 months canceled checks or drafts.
Condominium Review:
Increased presale requirement from 25% → 50%.
HOA delinquency threshold tightened from 20% → 15%.
Reserve funding increased from 8% → 10%.
Litigation rules expanded; more detailed conditions for eligibility.
Condotel Review:
CLTV Restructured; now requires min FICO 660 (previously 680).
Increased project financing cap from 15% → 20% of units.
First-Time Homebuyer:
DSCR minimum raised from 0.75 → 1; short-term rentals now not allowed.
Added CLTV cap for bank statement loans (max 80%).
Payment shock limit for P&L documentation capped at 100%.
