Non-QM Community Loan

  5/9/2023 1:01:07 AM      AAA Capital Investment, Inc.

What is the Non-QM Community Loan

Non-QM Community loan is often cheaper and easier to obtain than traditional bank loans because their lending standards are more relaxed, the loan amounts are relatively small, and interest rates are typically more favorable.

Program Highlights

Occupancy: Primary Home, Seconary Home

Loan Purpose: Purchase, Rate/Term Refinance, Cash Out Refinance

1) No Job & Income Required

2) No DTI Ratio 

3) 30 Days Seasoning Bank Statement

4) Max. LTV/CLTV 80%

5) Loan Amount $100k- $3.0 millions

6) Min. Fico 680

7) Min. 12 Months PITIA Reserves

★1/6 ARM(30 Yrs Term): 4.500 margin, caps2/2/5, Index =30 Days Avg SOFR, Floor = Margin, Max loan amount $2,500,000. Interest Only not permitted. Max LTV/CLTV 75%/75%.
★5/6 ARM(30 Yrs Term) or 5/6 ARM IO(30 Yrs Term) :4.500 margin, caps2/2/5, Index =30 Days Avg SOFR,Floor = Start Rate.
★7/6 ARM(30 Yrs Term) or 7/6 ARM IO(30 Yrs Term) :4.500 margin, caps5/2/5, Index =30 Days Avg SOFR,Floor = Start Rate.
★10/6 ARM(30 Yrs Term) or 10/6 ARM(30 Yrs Term) IO :4.500 margin, caps5/2/5, Index =30 Days Avg SOFR,Floor = Start Rate.
★30 Yrs FRM or 30 Yrs FRM IO.
★Interest Only(IO):Interest Only (IO) Period 10 Yrs + Amortization Term 20 Yrs (Maturity: 30 Yrs), All Interest Only transactions are capped at 75% max LTV/CLTV

Property Type ★SFR, PUD, Townhome, Detached Condo (max 80% LTV), Attached Condo (max 70% LTV) Non-Warrantable Condominiums (max 65% LTV), 2-4 Unit, Modular & Rural Homes.
★US Citizen: Must have a valid SSN.
★Permanent Resident Alien:Must have a valid SSN and green card.
★Non-Permanent Resident Alien (with US credit): Must have a valid SSN and the borrower's current visa must meet lender requirements and have a minimum of one year remaining prior to expiration. Visa types allowed: E-1,E-2, E-3, EB-5, G-1 through G-5, H-1B, L-1, NATO,O-1, R-1, & TN NAFTA.

★Sourced and seasoned for 30 days bank statement.
★Must provide source of funds for any recent large deposits. A large deposit is defined as 10% or more of the loan amount.
★Business funds are acceptable, must show proof of ownership. Business funds used to qualify are calculated based on the borrower’s percentage of ownership in the company. For example if a borrower owns 25% of the business then only 25% of the available balance of the account would be allowed to qualify.
★Gift funds are acceptable for 100% or a portion of the down payment, principal pay down & closing costs.
★Gifts of equity are not permitted
★Assets held in foreign accounts may not be used as a source of funds to close or for reserves. These funds must be transferred to a U.S. banking institution account in the Borrower’s name and seasoned at least thirty (30) days prior to closing.
★Cryptocurrency is not permitted.
★Follow grid above for the subject property.
★If the borrower owns additional financed properties in addition to the subject property the reserves must be calculated and documented as follows: 1.5% of the aggregate UPB of all mortgages tied to the additional financed properties.
★Cash out can be used towards the reserves requirement.
★100% value of stocks, bonds, mutual funds, 401k, retirement accounts and deferred compensation are acceptable sources of reserves.
★Gift funds are not acceptable for reserves.

★Standard two (2) tradelines reporting for 12+ months or one (1) tradeline reporting for 24+ months with activity in the last 90 days.At least one borrower must meet the tradeline requirement.
★First Time Home Buyers are allowed to apply a 12 month recent and satisfactory VOR towards the tradeline requirement.

Credit Event
★Mortgage History:0 x 30 x 12.
★Recent Forbearance: 12 months seasoning required after borrower exits forbearance plan.
★Foreclosure Seasoning :12 months
★Short Sale/DIL Seasoning:12 months
★BK Seasoning:Settled/Discharged
Job & Income
★Not required.
★Loan amounts over $1,500,000 automatically require two appraisals. Every appraisal requires a Desk Review. Properties with a condition rating of C5 or C6 or a quality rating of Q6 are not acceptable.
★Properties located within a Declining Market as defined by the appraiser require a 5% reduction to the max LTV/CLTV offered (refer to grid above).
★Purchase Transactions – LTV equals the lesser of the purchase price or appraised value.
★Refinance Transactions – If seasoned ownership is 12 months or greater, current appraised value is used. If the seasoned ownership is less than 12 months, use lesser of original purchase price or current appraised value.

Revocable Trust / Inter-Vivos
★A completed Trust and / or Trust Certification. At least one borrower on the transaction must be the Trustor (Settlor) and a Trustee.
Power of Attorney
★Acceptable for rate/term refinance, no cash out and purchases per Fannie Mae requirements.
★Must be “specific” and reference the loan transaction.
★POA needs to be notarized prior to and within 60 days of note date.
State Specific Restrictions
★California: Interest Only prohibited for FICOs below 660;
★Illinois: Allowed provided payment is based on fully indexed rate
★Ohio: Interest Only prohibited on Adjustable-Rate (ARM) loans
★Texas: Interest Only prohibited. Texas 50 (a)(6) not permitted.

★Compliance with all applicable federal and state regulations
★No Section 32 of Regulation Z or state high cost. "Total borrower paid points and fees up to 5%"

Other Requirements
★Qualifying Rate:7/6 ARM & 10/6 ARM & 30 Yrs FRM = Note Rate; 1/6 ARM & 5/6 ARM = Greater of Note Rate or Fully Indexed Rate.
★Prepayment Penalty:Not allowed.
★Balloon Payment:Not allowed.
★Impound account must be Required.
★VOM required on refinance transactions only.If Primary is owned free and clear, no VOM is required.
★Max Financed Properties:Maximum 20 financed properties including subject property.
★Subordinate Financing:Max 80% CLTV. Secondary financing must be institutional. Seller carrybacks are not permitted.
★Seller credit not to exceed 6% on purchase transactions.
★Homeowner Education is required.

If you have any questions about Non-QM Community Loan program, 

Please email to or call us: 1 (877) 789-8816.

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