Current Trends in Non-QM Lending for Real Estate Investors in 2024

Ryan Dumpert
Jul 1, 2025
4 min read

As we move through 2024, real estate investors are navigating a dynamic lending landscape shaped by economic shifts, evolving regulations, and changing borrower needs. Traditional mortgage loans can often present challenges for self-employed individuals and property investors, whose financial profiles don’t always align with the stringent requirements of qualified mortgages (QMs). This is where non-qualified mortgage (non-QM) loans come into play, offering flexible financing solutions tailored to diverse financial situations. Here’s a look at the top trends shaping non-QM lending this year and how savvy real estate investors can benefit.

1. Rising Demand for DSCR Loans Among Rental Property Investors

The Debt-Service Coverage Ratio (DSCR) loan is becoming a favored option for real estate investors in 2024. Rather than relying on personal income, DSCR loans allow investors to qualify based on the rental income generated by the property. With the rise of the rental market and higher demand for short-term rental properties, investors are looking for loan products that prioritize rental income over W-2s or tax returns.

Key Benefit: DSCR loans enable investors to scale their rental portfolios efficiently, leveraging rental income as the main qualifying factor.
Pro Tip: If you’re an investor with strong rental income but fluctuating personal earnings, DSCR loans may be an ideal fit for securing additional properties in high-demand areas.

2. Increased Popularity of Interest-Only Loans for Cash Flow Optimization

Interest-only loans are gaining traction among investors looking to maximize their monthly cash flow. By paying only the interest for an initial period, borrowers can allocate more resources to property upgrades, portfolio expansion, or other investments. In 2024, more lenders are offering these loans within the non-QM space, making them an attractive option for cash flow-conscious investors.

Key Benefit: Interest-only loans provide flexibility in the early years of ownership, allowing investors to make the most of their capital.
Pro Tip: Consider an interest-only loan if you’re focused on boosting cash flow early on, especially in markets where property appreciation is strong and potential resale values are high.

3. The Shift Towards Bank Statement Loans for Self-Employed Borrowers

The rise of the gig economy and the growing number of self-employed individuals are driving interest in bank statement loans. Unlike traditional mortgages, which rely on tax returns and W-2s, bank statement loans qualify borrowers based on bank deposits. This approach better reflects the actual cash flow of self-employed borrowers, who often have income that varies month to month.

Key Benefit: Bank statement loans offer a practical financing solution for self-employed investors whose reported income may not meet traditional lending requirements.
Pro Tip: If you’re self-employed or run a business with seasonal income, a bank statement loan can be your gateway to real estate investment without the rigid requirements of traditional mortgages.

4. Growing Appeal of Asset-Based Loans for High-Net-Worth Investors

Asset-based loans, which allow borrowers to qualify based on their liquid assets rather than income, are increasingly popular among high-net-worth individuals looking to invest in real estate. These loans are ideal for those with substantial assets but inconsistent or unconventional income streams. In 2024, more non-QM lenders are catering to this demographic, offering asset-based loans with competitive terms.

Key Benefit: Asset-based loans offer flexibility for investors who can leverage their wealth without being constrained by income documentation.
Pro Tip: If you have significant savings or investments but lack a steady paycheck, asset-based loans can enable you to capitalize on real estate opportunities without traditional income verification.

5. Increased Access to Fix-and-Flip Loans Amid Market Demand for Renovated Properties

With a growing number of buyers and renters seeking updated properties, fix-and-flip loans are experiencing heightened interest. These short-term, high-LTV loans are designed for investors aiming to purchase, renovate, and resell properties for profit. In 2024, the trend towards fix-and-flip investing is driven by demand for turnkey properties and rising home values in many areas.

Key Benefit: Fix-and-flip loans provide immediate capital for investors, allowing them to quickly enter and exit markets with high demand.
Pro Tip: If you’re an investor with a knack for renovations, consider fix-and-flip loans to take advantage of shorter timelines and higher returns in today’s market.

6. Stated Income Loans for Investors with Complex Financial Profiles

Stated income loans are making a comeback as an option for investors who may have difficulty documenting income in conventional ways. This loan type allows borrowers to qualify based on their stated income without the need for traditional documentation like tax returns. In 2024, stated income loans are particularly appealing to investors with complex financial profiles or multiple income sources.

Key Benefit: Stated income loans simplify the qualification process for investors who face barriers with standard income verification.
Pro Tip: If your income is derived from diverse sources, a stated income loan can streamline your financing process and provide the flexibility to seize investment opportunities.

The Future of Non-QM Lending in 2024 and Beyond

The growth of non-QM lending is set to continue as more investors seek flexible, tailored financing options. Non-QM loans, with their range of products and adaptable requirements, are an invaluable resource for real estate investors aiming to expand their portfolios and maximize cash flow. At Lending Path Advisors, we understand the unique financial situations of today’s investors and offer expertise in navigating the non-QM lending landscape to help you find the right financing solutions.

Whether you're looking to leverage rental income with a DSCR loan, capitalize on your assets with an asset-based loan, or explore other options in the non-QM sphere, our team is here to help you make informed, strategic decisions. Reach out today to learn more about how non-QM loans can fit your investment strategy.

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