As a mortgage loan officer in the non-QM space, you know your clients rarely fit the conventional box. Self-employed borrowers, investors, and foreign nationals all bring unique challenges. One of the most powerful levers you control is the down payment. The way you structure it impacts risk, approval speed, and pricing — and when managed effectively, it creates smoother approvals, faster closings, and stronger broker relationships.

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Down Payments in the Non-QM World

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In non-QM, the down payment isn’t just cash upfront. It’s a risk-management tool that impacts every stage of the loan:

  • Lower loan-to-value (LTV) =lower risk for funders
  • Better negotiating power on rates, fees, and conditions
  • Fewer compensating factors when credit or documentation is limited

Traditionally, Non-QM loans lean on higher down payments. But with Lendz, you can also integrate DPA ( Down Payment Assistance) strategies in certain cases to make deals work without weakening the file.

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Typical Down Payment Ranges in Non-QM — Focused on Core Programs

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Non-QM Program Max LTV (Min Down Payment) Key Notes
Bank Statement Up to 90% LTV (~10–20% down) Business or personal statements accepted; expense factor or CPA letter options available. Strong reserves improve approval confidence.
DSCR (1–4 units) Up to 80% LTV (~20% down) Investment property financing; rental income must support debt coverage. Higher down payments may be needed if income is unseasoned or DSCR is weaker.
Foreign National Up to 80% LTV (~20% down) No U.S. credit required; reserves and documentation flexibility are required. Higher DP expectations for higher-risk countries or limited documentation.
P&L Only (Self-Employed) Up to 85% LTV (~15–25% down) Uses 1–2 years P&L statements in place of tax returns. Higher down payments offset reduced income verification and risk exposure.

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Why Down Payments Matter for Loan Officers

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  1. Expand borrower pool: Setting clear expectations on DP requirements reduces fallout and builds trust.
  2. Improve optics for underwriting: Stronger down payments reduce lender hesitation and friction.
  3. Build client loyalty: Borrowers close faster and brokers return when you guide them through DP strategy effectively

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Where DPA Fits In

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In certain cases, Down Payment Assistance can be layered into non-QM deals, giving you flexibility to structure files that might otherwise fall short:

  • Some programs allow up to 50% of the required down payment to be covered with DPA (conditions apply).
  • DPA works best as a bridge tool for borrowers who have strong credit and reserves but limited liquidity.
  • Always confirm program eligibility upfront, since not every non-QM product allows DPA.

Here’s where it gets especially powerful:

  • For owner-occupied loans, the 80% LTV tier isn’t necessarily the cheapest rate bucket, but it delivers the biggest improvement from the higher LTV ranges (85–90%). That’s where pricing finally normalizes and stops being punitive.
  • For DSCR loans, the same is true at 75% LTV. That tier brings the largest rate improvement over the higher buckets, which is why investors fight to structure deals that land there.

With DPA, borrowers who don’t have enough cash to reach those thresholds on their own can still get there — unlocking better terms and giving you, the broker, a competitive advantage.

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Strategies for Loan Officers

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  • Confirm lender rules early: Align borrower expectations with program requirements.
  • Position DPA as supplemental: Borrowers still need to bring their own funds; assistance is not a replacement.
  • Leverage assets and equity: Combine seasoned reserves or property equity with DP to strengthen files.
  • Educate borrowers: Show how DP size impacts pricing, approval certainty, and underwriting speed.

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Sales Conversation Tips

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Use these lines with brokers or clients to keep the DP/DPA discussion clear:

  • “A stronger down payment means fewer underwriting conditions and better pricing."
  • “If you’re short on liquidity, DPA could bridge the gap to meet the required threshold."
  • “At 20% vs. 30% down, here’s how your rate, LTV, and approval certainty shift — let’s run the scenarios."
  • “Hitting 80% LTV for owner-occupied or 75% LTV for DSCR is where you’ll see the biggest pricing improvement."

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Key Takeaways

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  • Non-QM loans often require higher down payments — ranging from 10% up to 25% depending on the program.
  • With Lendz, borrowers can go as high as 90% LTV in the right scenarios, giving you flexibility.
  • The largest pricing improvements happen at 80% LTV for owner-occupied loans and 75% for DSCR. Hitting those marks is where the deal shifts.
  • DPA can cover part of the down payment in select programs, expanding options for qualified borrowers.
  • Loan officers who master DP and DPA strategy deliver faster approvals, fewer surprises, and stronger broker relationships.