Non-QM Loans in New Jersey: Which Program Fits You

What a non-QM loan is

QM stands for Qualified Mortgage. The CFPB describes it as a loan with less risky features and protections that make it more likely you can afford the loan. Government-backed loans (FHA, USDA and VA) count as qualified. Conventional loans backed by Fannie Mae and Freddie Mac, and jumbo loans, must meet special requirements to count.

The federal rule, 12 CFR 1026.43, spells those requirements out. A general qualified mortgage has:

• Regular, substantially equal payments that do not raise the principal balance, defer principal or end in a balloon payment.
• A loan term of 30 years or less.
• Points and fees within the rule's cap: 3 percent of the total loan amount on loans of $100,000 or more (indexed for inflation).
• Underwritten using the maximum interest rate that may apply during the first five years, with payments that repay the loan.
• Income or assets, debts, alimony, child support and the debt-to-income ratio or residual income considered, with the income or assets and the debts verified through third-party records.
• An APR that does not exceed the average prime offer rate by 2.25 or more percentage points on a first-lien loan of $110,260 or more (indexed for inflation); other loan sizes and liens have their own margins.

A non-QM loan is any mortgage that steps outside that list. In CMG Financial’s words, “the most common type of non-QM borrower is one with different income documentation than a W-2”: deposits instead of returns, rent instead of a paycheck, assets instead of a salary.

Non-QM still means proof of income

For the home loans it covers, qualified or not, the ability-to-repay rule requires the lender to verify the income or assets it relies on with third-party records that give “reasonably reliable evidence.” The rule names eight kinds of records:

1. Tax returns filed with the IRS or a state.
2. IRS Form W-2s or similar wage forms.
3. Payroll statements, including military Leave and Earnings Statements.
4. Financial institution records.
5. Records from the employer, or a third party that got them from the employer.
6. Government agency records of benefit or entitlement income.
7. Receipts from check cashing services.
8. Receipts from funds transfer services.

A full-documentation loan leans on the first two. A bank statement loan leans on the fourth. The difference between them is which record proves the income. A DSCR loan is a different case: CMG qualifies it on the rental income of the property, with no employment or income verification.

CMG Home Loans’ non-QM programs

CMG’s loan programs page lists four non-QM solutions: DSCR, bank statement programs (12 and 24 month), ITIN and asset depletion. A 2023 CMG Financial post adds a 1099 program and describes what each file needs. Jimmy Joseph is a loan officer with CMG Home Loans in Paramus; ask him which programs fit your file.

Program list from learnaboutcmg.com, read November 3, 2026; file details from CMG Financial’s June 15, 2023 post. Programs and guidelines change; Jimmy confirms the current version for your file.

Which program fits you

Start from how you earn, not from the loan name.

Why tax returns undercount self-employed buyers

A full-documentation loan reads your returns. Fannie Mae’s guide treats anyone with a 25% or greater ownership interest in a business as self-employed and asks for the past two years of federal returns. One year can do if the business has existed for five years and you have held 25% or more of it for five straight years.

The catch is deductions. A full-documentation lender starts from the net profit on your Schedule C, so most write-offs lower the income it can count. Fannie Mae’s Schedule C guide does make the lender add back five recurring items: depreciation, depletion, business use of a home, amortization and casualty losses. A good year for taxes can still be a weak year for a mortgage, and non-QM programs exist for that gap.

What a non-QM loan costs you

Flexibility is priced in. CMG Financial’s post for small business owners says its bank statement products may have higher interest rates, more points, or more fees than other products that require full documentation. It also says those loans typically ask for a higher down payment, often 10% to 20%.

So the order of operations matters. If your returns already qualify you for the home you want, a conventional, FHA or VA loan is usually the cheaper route. Non-QM is for when they fall short. Jimmy can run both from one set of documents and show you the difference before you choose. This page does not quote rates.

What to bring, by program

From CMG’s own descriptions. Jimmy confirms the current list for your file.

• Bank statement: 12 months of personal or business statements (CMG’s 2025 post says to be ready with 12 to 24), plus a letter from a CPA, enrolled agent or licensed tax preparer verifying that you are self-employed.
• 1099: the past two years of 1099s. No W-2s, and no expense deductions from the past two years are needed.
• DSCR: the rental income on the property you are buying or refinancing. CMG says no employment or income verification is needed on this program.
• ITIN and asset depletion: CMG lists both programs but does not publish their document lists. Bring your ITIN letter, or your most recent asset statements, and Jimmy will tell you what else the file needs.

How it works with Jimmy

1. A short call or the form above. Your town, how you earn and your price range.
2. Both routes reviewed. The full-documentation route and the non-QM route, from the same documents.
3. The program that fits. Bank statement, 1099, DSCR, ITIN or asset depletion, with its document list, if CMG’s guidelines and your file allow it.
4. Application and underwriting through CMG. Jimmy is a loan officer with CMG Home Loans in Paramus; the secure application below goes to CMG.

Frequently asked questions

Related guides

• Bank Statement Loans NJ→The 12/24-month income math, the expense factor and an income estimator.
• Self-Employed Mortgages NJ→Every self-employed route: tax returns, 1099, P&L and bank statements.
• Real Estate Investor Loans NJ→DSCR loans that qualify on the rental's cash flow.
• Asset Depletion Mortgage NJ→Qualify with savings and investments instead of income.

Sources

• CMG Home Loans, Loan Programs (Non-QM Solutions: DSCR, bank statement programs, ITIN, asset depletion), read November 3, 2026
• CMG Financial, "No W-2 Forms? No Problem. We Can Still Help You Buy a Home!," June 15, 2023
• CMG Financial, "Building Your Future: The Top Home Loans for Small Business Owners," March 13, 2025
• CMG Home Loans, Jimmy Joseph, Paramus branch and licensing
• Consumer Financial Protection Bureau, What is a Qualified Mortgage?
• 12 CFR 1026.43, Minimum standards for transactions secured by a dwelling (ability to repay and qualified mortgage)
• Fannie Mae Selling Guide B3-3.5-01, Underwriting Factors and Documentation for a Self-Employed Borrower
• Fannie Mae Selling Guide B3-3.6-03, Income or Loss Reported on IRS Form 1040, Schedule C (recurring items added back)

Equal Housing Opportunity. Jimmy Joseph, MBA is a loan officer, NMLS #1577754, with CMG Mortgage, Inc., dba CMG Home Loans, NMLS #1820. Branch NMLS #2477715. NMLS #1577754 | Verify current licensing in NMLS Consumer Access. Program guidelines, credit score minimums, down payments and loan amounts change without notice and depend on the property and the full file. This page is information, not a commitment to lend or an offer of credit, and does not quote rates. Tax questions belong with a tax adviser.