by the Consumer Financial Protection Bureau (CFPB) for conventional mortgages, often referred to as Qualified Mortgages (QM). The primary difference between Non-QM loans and conventional loans lies in how the borrower is underwritten. In all cases the lender is required to demonstrate that the borrower has the ability to repay. Non-QM Loans are typically suited for borrowers who are self- employed, business owners, gig workers, those for whom commissions are a significant (or all) of their earnings, investors, foreign nationals, immigrants with ITINS and retirees with moderate current earned income but significant assets. Conventional loans require specific documentation of income, assets, and employment history typically as reflected inW-2 forms, pay stubs, filed tax returns, and other financial records. Non-QM loans may offer alternative documentation options such as the use of bank statements, asset-based income verification, profit & loss statements or other alternative proof of income and/or assets.
USDA Loan Program
A United States Department of Agriculture (USDA) home loan is a zero-down payment mortgage for eligible rural and suburban homebuyers. USDA loans are issued through the USDA Rural Development Guaranteed Housing Loan Program. Properties that are purchased with a USDA loan must be located in an approved rural area. Rural areas are generally defined as a region outside of a major city with fewer than 35,000 residents. Rural areas also can consist of open countryside with population densities less than 500 people per square mile and places with fewer than 2,500 people. USDA loans are intended for the purchase of primary residences
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