Loan programs

Standard conventional / QM

Full documentation: typically two years of W-2s or tax returns, paystubs, and asset statements. Qualifying metric is DTI. Conforming loan limits apply unless the file is jumbo. PMI is common above 80% LTV on owner-occupied purchases. Prepayment penalties are not a feature of standard QM consumer mortgages.

Arizona-style bank-statement Non-QM (and other states)

Built for self-employed borrowers whose tax returns do not show the cash flow the business actually produces. Investors commonly use 12 or 24 months of personal or business deposits, apply an expense factor, and still run a DTI. Expect higher rates than conforming, larger down payments (often 20–25%), and more reserves. Owner-occupied consumer Non-QM generally cannot carry a prepayment penalty.

Example comparison figures used in an Arizona worksheet (illustrative only): 5% down conventional vs. 20% bank-statement vs. 25% DSCR, with Non-QM rate spreads often in a 0.50%–1.50% range over a conforming baseline — actual pricing is file-specific.

DSCR investor Non-QM

Qualification is property cash flow: gross rent divided by PITIA (Debt Service Coverage Ratio). Personal income may not be used. Entity vesting (LLC/trust) is often allowed. Prepayment schedules of 1–5 years are common on investor loans where state law permits them. Reserves are typically heavier (often 6–12 months).

Asset depletion / utilization

Liquid assets are divided by a term (or a published factor) to create a monthly qualifying figure. Used when income documents are thin but assets are strong. Still subject to credit, LTV, and reserve overlays.