Non-QM Mortgage Guide: Texas 2026
Complete guide to Non-QM mortgages in Texas. Compare DSCR, bank statement, asset depletion, and 1099 loan programs from 120+ licensed lenders.
NonQM Lending Team
Expert Contributor
The Complete Non-QM Mortgage Guide for Texas Borrowers: 2026
Non-QM (Non-Qualified Mortgage) loans have transformed how Texas borrowers access homeownership and investment financing. If traditional lenders have turned you down because of self-employment income, credit history, or unconventional financial circumstances, Non-QM programs provide proven alternatives backed by 120+ licensed lenders across Texas.
This guide covers every Non-QM loan type available in Texas, who qualifies, current rates, and how to choose the right program for your situation.
What Are Non-QM Loans?
Non-QM loans are mortgage products that do not meet the Consumer Financial Protection Bureau's (CFPB) Qualified Mortgage standards. This does not mean they are risky or subprime. It means they use alternative methods to verify a borrower's ability to repay, such as bank statements, asset documentation, or property cash flow instead of traditional W-2 income and tax returns.
Non-QM Loan Programs Available in Texas
1. Bank Statement Loans **Best for**: Self-employed borrowers, business owners, freelancers
Use 12 or 24 months of bank statements to qualify instead of tax returns. Ideal for Texas's large self-employed workforce in energy, technology, and healthcare.
- Credit score: 620+ minimum
- Down payment: 10-25%
- Loan amounts: Up to $3M+
- [Learn more about bank statement loans](/programs/bank-statement)
2. DSCR Loans (Investor Cash Flow) **Best for**: Real estate investors, landlords, property portfolio builders
Qualify based on the rental property's income, not your personal income. No employment verification, no tax returns, no W-2s.
- DSCR ratio: 1.0-1.20 minimum
- Down payment: 15-25%
- Property types: SFR, 2-4 units, condos
- [Learn more about DSCR loans](/programs/dscr)
3. Asset Depletion Loans **Best for**: Retirees, high-net-worth individuals, those with significant savings
Qualify using liquid assets (stocks, bonds, retirement accounts, savings) divided over the loan term to create a qualifying income stream.
- Minimum assets: Typically $500,000+
- Down payment: 20-30%
- Loan amounts: Up to $5M+
- [Learn more about asset depletion loans](/programs/asset-depletion)
4. 1099 Income Loans **Best for**: Independent contractors, freelancers, gig economy workers
Use your 1099 tax forms to qualify instead of full tax returns. Simpler documentation for borrowers with consistent contract income.
- 1-2 years of 1099s required
- Credit score: 660+ minimum
- Down payment: 10-20%
5. Foreign National Loans **Best for**: Non-US citizens investing in Texas real estate
Available for foreign nationals and non-permanent residents purchasing investment or vacation properties in Texas.
- No US credit history required
- Down payment: 25-30%
- Loan amounts: $100K-$3M
6. Recent Credit Event Loans **Best for**: Borrowers recovering from bankruptcy, foreclosure, or short sale
Programs with shorter seasoning periods (as little as 1 day from discharge) for borrowers rebuilding their credit.
- Credit score: 620+ minimum
- Down payment: 20-30%
- Compensating factors may be required
Texas Non-QM Loan Comparison
| Program | Min Credit | Down Payment | Income Proof | Best For |
|---|---|---|---|---|
| Bank Statement | 620 | 10-25% | Bank deposits | Self-employed |
| DSCR | 620 | 15-25% | Property rent | Investors |
| Asset Depletion | 680 | 20-30% | Liquid assets | Retirees/HNW |
| 1099 Income | 660 | 10-20% | 1099 forms | Contractors |
| Foreign National | None | 25-30% | Foreign docs | Non-US buyers |
| Recent Credit Event | 620 | 20-30% | Varies | Credit recovery |
Texas Non-QM Market Overview
Texas is a fast-growing market with no state income tax and strong rental demand across multiple metros. Key market statistics:
- Median home price: $301,000
- Licensed Non-QM lenders: 120+
- Most popular programs: DSCR loans and 1099 income programs
- Average rental yield: Strong across Houston, Dallas, San Antonio
Case Study: Austin Non-QM Success Story
- Borrower Profile:
- Location: Austin, TX
- Loan Amount: $550,000
- Program: Bank Statement
- Situation: tech startup founder with $22K/month in deposits
- Result: Approved and closed within 30 days
Traditional lenders declined this borrower because their income documentation did not fit conventional underwriting guidelines. The Non-QM program recognized their true financial strength and provided the financing they needed.
How to Choose the Right Non-QM Program in Texas
Follow these steps to find the best Non-QM loan for your situation:
- Identify your income type — W-2, self-employed, investment income, or assets
- Check your credit score — This determines which programs are available and at what rates
- Calculate your down payment — More down payment means better rates and more options
- Determine the property type — Primary residence, investment, or vacation home
- Compare at least 3 lenders — Rates and terms vary significantly between lenders
- Get pre-qualified — A pre-qualification letter strengthens your offer
Texas Non-QM Rates: What to Expect in 2026
Non-QM rates in Texas typically run 0.50-2.00% higher than conventional rates, depending on the program and borrower profile. Current ranges:
| Program | Rate Range | Factors Affecting Rate |
|---|---|---|
| Bank Statement | 7.25-9.50% | Credit score, LTV, statement period |
| DSCR | 7.25-9.50% | DSCR ratio, credit score, LTV |
| Asset Depletion | 7.00-8.50% | Asset amount, LTV, credit score |
| 1099 Income | 7.50-9.00% | Income stability, credit score |
| Foreign National | 8.00-10.00% | Down payment, property type |
Getting Started with Non-QM Loans in Texas
Our network connects you with 120+ licensed Non-QM lenders across Texas. Get matched with lenders who specialize in your specific situation.
[Get Pre-Qualified](/get-started) | [Find Texas Lenders](/locations/texas) | [Compare All Programs](/programs)
Frequently Asked Questions
Are Non-QM loans safe in Texas? Yes. Non-QM loans in Texas are fully regulated mortgage products offered by licensed lenders. They follow all federal and state lending laws, including the Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA). The term "Non-QM" simply means they use alternative income verification methods rather than the standard W-2/tax return approach.
What is the minimum credit score for Non-QM loans in Texas? Most Non-QM programs in Texas require a minimum credit score of 620-660. Asset depletion loans may require 680+. The higher your credit score, the better your rate and terms. Borrowers with 740+ scores typically receive the best available Non-QM rates, often within 0.50-0.75% of conventional rates.
How long does it take to close a Non-QM loan in Texas? Non-QM loans in Texas typically close in 21-35 days, comparable to conventional loans. DSCR loans often close faster (21-25 days) because they require less documentation. Bank statement and asset depletion loans may take slightly longer (25-35 days) due to the income calculation process.
Can I get a Non-QM loan for a primary residence in Texas? Yes. While DSCR loans are limited to investment properties, most other Non-QM programs (bank statement, asset depletion, 1099, recent credit event) are available for primary residences, second homes, and investment properties in Texas.
Do Non-QM loans have prepayment penalties in Texas? Some Non-QM loans in Texas include prepayment penalties, typically for the first 1-3 years. Investment property DSCR loans commonly have a 3-year prepayment penalty. Primary residence Non-QM loans may or may not have prepayment penalties depending on the lender and program. Always confirm the prepayment terms before closing.
How do Non-QM rates compare to conventional rates in Texas? Non-QM rates in Texas are typically 0.50-2.00% higher than conventional mortgage rates. The exact premium depends on the program type, credit score, LTV, and property type. Borrowers with strong credit (740+) and significant down payments (25%+) can often secure Non-QM rates within 0.50-0.75% of conventional rates.
Can I refinance from a Non-QM loan to a conventional loan later? Yes. Many Texas borrowers use Non-QM loans as a bridge to conventional financing. Once your income documentation, credit score, or financial situation improves, you can refinance into a conventional loan with potentially lower rates. There is no restriction on refinancing from Non-QM to conventional.
Explore Texas Non-QM Resources
Texas Location Hub
Visit our [Texas Non-QM Lending page](/locations/texas) for a comprehensive overview of Non-QM mortgage options across the state, including lender directories, market statistics, and program comparisons.
Texas City Guides
Explore Non-QM lending options in specific Texas markets:
- [Houston Non-QM Lenders](/locations/texas/houston) — Local lender directory, market data, and neighborhood insights
- [Dallas Non-QM Lenders](/locations/texas/dallas) — Local lender directory, market data, and neighborhood insights
- [Austin Non-QM Lenders](/locations/texas/austin) — Local lender directory, market data, and neighborhood insights
Related Texas Articles
- [Best DSCR Lenders in Texas 2026](/blog/best-dscr-lenders-texas-2026)
- [Bank Statement Loans in Texas 2026](/blog/bank-statement-loans-texas-2026)
Loan Program Details
- [All Non-QM Loan Programs](/programs) — Browse all available programs
- [Non-QM vs Conventional Loans](/blog/non-qm-vs-conventional-loans) — Side-by-side comparison
- [Get Pre-Approved](/get-started) — Start your application today