A Non-QM (Qualified Mortgage) loan is a type of mortgage that does not meet the standards set by the Consumer Financial Protection Bureau’s (CFPB) Qualified Mortgage rule. This means that Non-QM loans do not meet certain requirements related to the borrower’s ability to repay, debt-to-income ratio, and other standard underwriting criteria.

Non-QM loans are often used for borrowers who may not meet the strict requirements of conventional loans, such as self-employed individuals, those with non-traditional income sources, or borrowers with past credit issues. These loans are often more flexible in their underwriting guidelines but may come with higher interest rates or additional requirements to mitigate the lender’s risk.