$340,000
Median Home Price
$385,000
Avg. Loan Amount
72+
Licensed Lenders
12+
Major Markets
Texas Real Estate Market
Why Non-QM loans are popular in Texas
No state income tax attracts high-income professionals and businesses
Rapidly growing metros like Austin and Dallas drive investor demand
Strong oil & gas industry creates unique income documentation needs
Large Hispanic population benefits from ITIN lending programs
Cash-out refinance popular for business owners
Investment property market thriving in major metros
Non-QM vs Conventional in Texas
See how Non-QM mortgage options compare to conventional loans for Texas 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 | $766,550 |
| Closing Time | 21-28 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 Texas market conditions as of 2026.
Popular Non-QM Programs in Texas
These loan programs are especially popular among Texas borrowers
Top Texas Markets We Serve
Non-QM lending available throughout Texas
Texas Lending Regulations
Texas is regulated by the Department of Savings and Mortgage Lending (DSML). Texas has unique homestead laws that affect cash-out refinances on primary residences (limited to 80% LTV). All mortgage companies must be licensed under the Texas Finance Code.
Texas Non-QM Loan FAQs
Common questions about Non-QM loans in Texas
What are Texas's unique lending rules I should know about?
Texas has homestead protection laws that limit cash-out refinances on primary residences to 80% LTV. This applies to all loan types, including Non-QM. Investment properties are not subject to this restriction.
Can I get a Non-QM loan for a rental property in Texas?
Absolutely! DSCR loans are extremely popular in Texas for investment properties. You can qualify based on the property's rental income, and Texas's strong rental markets in Houston, Dallas, and Austin make these loans very attractive.
Are Non-QM loans available in rural Texas areas?
Yes, Non-QM loans are available throughout Texas, including rural areas. Some lenders may have minimum population requirements, but most major metros and surrounding counties are well-served.
What down payment do I need for a Non-QM loan in Texas?
Down payment requirements vary by program. Bank statement loans typically require 10-20% down, DSCR loans usually require 20-25% down, and some programs offer options as low as 10% for qualified borrowers.
How does Texas's no income tax affect my loan qualification?
Texas's lack of state income tax can actually help your qualification by increasing your net income. For bank statement loans, your deposits may show higher amounts compared to states with income tax withholding.
What are current Non-QM mortgage rates in Texas?
Non-QM mortgage rates in Texas 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 Houston and Dallas tend to have competitive pricing due to higher lender competition.
What income documentation alternatives are accepted for Non-QM loans in Texas?
Non-QM lenders in Texas 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 Texas.
What property types qualify for Non-QM financing in Texas?
Non-QM loans in Texas 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 Houston and Dallas, multi-unit properties are especially popular for DSCR loans.
What is the minimum down payment for a Non-QM loan in Texas?
Most Non-QM programs in Texas 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 Texas around $330,000, this means a down payment starting at approximately $49,500 to $66,000.
Can I refinance into a Non-QM loan in Texas?
Yes, Non-QM refinancing is available in Texas 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 Texas homeowners who want to tap equity without providing traditional income documentation, or investors looking to pull equity from rental properties in Houston or Dallas to fund additional purchases.
How do DSCR loans work for Texas investment properties?
DSCR (Debt Service Coverage Ratio) loans in Texas 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 Texas's growing markets.
What happens if I have a recent bankruptcy or foreclosure in Texas?
Non-QM lenders in Texas 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 Texas?
Yes, several Non-QM lenders in Texas 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 Texas with as little as 25-30% down. Popular areas for foreign national buyers include Houston and Dallas.
What is the maximum loan amount for Non-QM loans in Texas?
Non-QM loan amounts in Texas 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 Houston and Dallas can be financed with these higher limits.
How does a bank statement loan work for self-employed borrowers in Texas?
Bank statement loans in Texas 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 Texas business owners who maximize tax deductions.
What are the DTI requirements for Non-QM loans in Texas?
Non-QM loans in Texas 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 Texas?
Most Non-QM lenders in Texas 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 Texas?
Non-QM loans in Texas 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).
Texas Non-QM Lending Articles
In-depth guides and market analysis for Texas borrowers and investors
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