$785,000
Median Home Price
$650,000
Avg. Loan Amount
85+
Licensed Lenders
12+
Major Markets
California Real Estate Market
Why Non-QM loans are popular in California
Highest home prices in the nation require flexible income documentation
Large self-employed population benefits from bank statement loans
Strong rental market makes DSCR loans popular for investors
Tech industry professionals often have complex income structures
Foreign national buyers active in coastal markets
Jumbo Non-QM loans available up to $3M+ in high-cost areas
Non-QM vs Conventional in California
See how Non-QM mortgage options compare to conventional loans for California borrowers
| Feature | Non-QM Loans | Conventional |
|---|---|---|
| Interest Rates | 6.5% - 8.5% | 6.25% - 7.0% |
| Min. Credit Score | 580-620 | 620-680 |
| Max DTI Ratio | Up to 50-55% | Up to 43-45% |
| Down Payment | 10-25% | 3-20% |
| Income Documentation | Bank Statements, 1099, P&L, Assets | W-2, Tax Returns, Pay Stubs |
| Max Loan Amount | Up to $5M | $1,149,825 |
| Closing Time | 21-30 days | 30-45 days |
| PMI Required | No (typically 10%+ down) | Yes (if < 20% down) |
* Rates and terms are approximate and vary by lender, credit profile, and property type. Data reflects typical California market conditions as of 2026.
Popular Non-QM Programs in California
These loan programs are especially popular among California borrowers
Top California Markets We Serve
Non-QM lending available throughout California
California Lending Regulations
California is regulated by the Department of Financial Protection and Innovation (DFPI). All mortgage lenders must be licensed under the California Financing Law (CFL) or the California Residential Mortgage Lending Act (CRMLA). Non-QM loans must comply with state usury laws and disclosure requirements.
California Non-QM Loan FAQs
Common questions about Non-QM loans in California
What are the loan limits for Non-QM loans in California?
Non-QM loans in California can go up to $3 million or more depending on the lender. High-cost areas like San Francisco, Los Angeles, and San Diego often have higher limits available.
Can I get a Non-QM loan for an investment property in California?
Yes! DSCR loans are very popular for California investment properties. You can qualify based on the property's rental income rather than your personal income, making it easier to scale your portfolio.
What credit score do I need for a Non-QM loan in California?
Most California Non-QM lenders require a minimum credit score of 620-660, though some programs are available down to 580. Higher credit scores typically get better rates.
Are Non-QM loans available for California condos?
Yes, Non-QM loans are available for condos in California, including non-warrantable condos that don't meet Fannie Mae or Freddie Mac guidelines. This is common in urban areas like San Francisco and LA.
How long does it take to close a Non-QM loan in California?
Non-QM loans in California typically close in 21-30 days, though some lenders offer expedited closings in 14-21 days for well-qualified borrowers with complete documentation.
What are current Non-QM mortgage rates in California?
Non-QM mortgage rates in California typically run 0.5-1.25% higher than conventional rates. As of 2026, expect rates between 6.5% and 9.5% depending on the program, credit score, and down payment. Bank statement loans and DSCR loans in Los Angeles and San Francisco tend to have competitive pricing due to higher lender competition.
What income documentation alternatives are accepted for Non-QM loans in California?
Non-QM lenders in California accept several alternative income documentation methods: 12 or 24 months of bank statements (personal or business), 1099 forms, profit and loss statements prepared by a CPA, asset depletion calculations, and rental income from DSCR analysis. This flexibility makes homeownership accessible for self-employed borrowers, freelancers, and investors throughout California.
What property types qualify for Non-QM financing in California?
Non-QM loans in California cover a wide range of property types including single-family homes, condos (including non-warrantable), townhomes, 2-4 unit properties, and some commercial mixed-use properties. Investment properties, vacation homes, and primary residences all qualify. In markets like Los Angeles and San Francisco, multi-unit properties are especially popular for DSCR loans.
What is the minimum down payment for a Non-QM loan in California?
Most Non-QM programs in California require a minimum down payment of 10-20%, though some lenders offer options as low as 10% for primary residences with strong compensating factors. DSCR loans for investment properties typically require 20-25% down. With the median home price in California around $780,000, this means a down payment starting at approximately $117,000 to $156,000.
Can I refinance into a Non-QM loan in California?
Yes, Non-QM refinancing is available in California for both rate-and-term and cash-out refinancing. Cash-out refinances allow up to 75-80% LTV in most cases. This is particularly popular among California homeowners who want to tap equity without providing traditional income documentation, or investors looking to pull equity from rental properties in Los Angeles or San Francisco to fund additional purchases.
How do DSCR loans work for California investment properties?
DSCR (Debt Service Coverage Ratio) loans in California qualify borrowers based on the rental income of the property rather than personal income. The property's monthly rental income must typically cover 1.0x to 1.25x the monthly mortgage payment (PITI). No employment verification, tax returns, or W-2s are required. This makes DSCR loans ideal for scaling a rental portfolio in California's growing markets.
What happens if I have a recent bankruptcy or foreclosure in California?
Non-QM lenders in California offer programs for borrowers with recent credit events. Many programs allow financing just 1-2 years after a bankruptcy discharge (compared to 4-7 years for conventional loans) and 2-3 years after a foreclosure. Expect to provide a larger down payment (typically 20-25%) and accept a slightly higher interest rate, but homeownership is still achievable.
Are Non-QM loans available for foreign nationals buying property in California?
Yes, several Non-QM lenders in California offer foreign national loan programs. These loans do not require a U.S. Social Security number, credit history, or visa. Foreign nationals can purchase investment properties or vacation homes in California with as little as 25-30% down. Popular areas for foreign national buyers include Los Angeles and San Francisco.
What is the maximum loan amount for Non-QM loans in California?
Non-QM loan amounts in California typically range from $100,000 to $3 million, with some lenders offering up to $5 million for jumbo Non-QM programs. There are no conforming loan limits to worry about since Non-QM loans are not sold to Fannie Mae or Freddie Mac. High-value properties in Los Angeles and San Francisco can be financed with these higher limits.
How does a bank statement loan work for self-employed borrowers in California?
Bank statement loans in California allow self-employed borrowers to qualify using 12 or 24 months of personal or business bank statements instead of tax returns. The lender calculates your income by averaging deposits over the statement period, typically using 50-100% of deposits for business accounts and 100% for personal accounts. This is ideal for California business owners who maximize tax deductions.
What are the DTI requirements for Non-QM loans in California?
Non-QM loans in California generally allow higher debt-to-income (DTI) ratios than conventional loans. Most programs accept DTI ratios up to 50%, and some lenders go as high as 55% with compensating factors such as a larger down payment, significant reserves, or a higher credit score. DSCR loans do not use personal DTI at all, focusing instead on the property's cash flow.
Do I need reserves to qualify for a Non-QM loan in California?
Most Non-QM lenders in California require 3-12 months of mortgage payment reserves in liquid assets after closing. The exact requirement depends on the loan program, property type, and credit profile. Investment property loans and jumbo Non-QM loans typically require more reserves (6-12 months), while primary residence loans may require as few as 3-6 months.
How does Non-QM lending compare to conventional mortgages in California?
Non-QM loans in California differ from conventional mortgages in several key ways: they accept alternative income documentation (bank statements, 1099s, asset depletion), allow lower credit scores (as low as 580 vs. 620+ for conventional), permit higher DTI ratios (up to 50-55%), and have no conforming loan limits. The trade-off is slightly higher interest rates (0.5-1.25% above conventional) and larger down payment requirements (typically 10-25% vs. 3-5% for conventional).
California Non-QM Lending Articles
In-depth guides and market analysis for California borrowers and investors
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