A Non-Qualified Mortgage (Non-QM) is a residential mortgage loan that does not meet the strict criteria of a “Qualified Mortgage (QM)”, but remains fully legal and regulated under U.S. federal law.

Non-QM loans are designed to serve borrowers whose financial profiles do not fit traditional banking models, while still respecting consumer protection rules.

Yes. Absolutely.

Non-QM loans are explicitly permitted under:

• the Dodd-Frank Act,

• the Ability-to-Repay (ATR) Rule,

• and the Consumer Financial Protection Bureau (CFPB) framework.

They are widely used by licensed lenders, private institutions, and alternative mortgage providers across the U.S.

A Qualified Mortgage (QM) follows very strict bank rules. It usually requires W-2 income, tax returns, a strong credit score, and standard employment history.

A Non-Qualified Mortgage (Non-QM) is also fully regulated and protects borrowers, but it allows more flexible evaluation. Income can be verified through bank statements or cash flow instead of traditional pay stubs, and credit requirements are more adaptable.

Both QM and Non-QM loans offer strong consumer protection and are legal under U.S. law.

Non-QM does not mean subprime or predatory — it simply means more flexible, while remaining responsible and regulated.

No.

Non-QM loans are not subprime loans.
They differ fundamentally from pre-2008 subprime lending because:

• They require documented ability to repay

• They prohibit deceptive loan structures

• They are subject to federal and state oversight

• They include clear disclosures and borrower protections

Sterling Private Capital structures its alternative residential mortgage loans to comply with:

• Ability-to-Repay (ATR) requirements

• Equal Credit Opportunity Act (ECOA)

• Fair Housing Act

• Truth in Lending Act (TILA)

• Applicable state-level lending laws

Each loan undergoes:

• documented income and asset review,

• collateral valuation,

• payment sustainability analysis.

Non-QM underwriting allows alternative but verifiable documentation, such as:

• 12–24 months bank statements

• Self-employment cash flow analysis

• Rental income

• Asset-based income

• Combined income sources

 All documentation must support the borrower’s ability to repay.

Yes.

While Non-QM loans are not subject to the same caps as QM loans, they remain governed by:

• state usury laws,

• high-cost mortgage thresholds (HOEPA),

• federal disclosure requirements.

Sterling Private Capital operates within ethical cooperative rate ranges (6.2% – 8.8%), well below typical hard-money lending.

Yes. Non-QM borrowers are protected by:

• Mandatory loan disclosures

• Prohibition of deceptive terms

• Right to clear explanation of risks

• Fair servicing standards

• Anti-discrimination laws

Sterling Private Capital adds additional cooperative protections, including:

• refinancing pathways,

• foreclosure-prevention focus,

• transparent servicing.

Yes.

Non-QM loans can be:

• refinanced internally,

• refinanced into QM loans later,

• or transitioned to lower cooperative rates once stability is achieved.

This transition model is central to Sterling Private Capital’s mission.

Yes.

Non-QM loans are commonly used for:

• primary residences,

• first-time homebuyers,

• self-employed homeowners,

• borrowers recovering from financial hardship.

They are not limited to investors.

No.

Sterling Private Capital is not a bank and is not federally insured.
It is a private lending cooperative facilitating alternative residential mortgages through private capital — within a regulated legal framework.

Non-QM loans are appropriate for borrowers who:

• are self-employed or entrepreneurs,

• have non-traditional income,

• experienced foreclosure or credit disruption,

• were declined by traditional banks despite real repayment capacity.

Sterling Private Capital is structured to:

• avoid automatic servicing escalation,

• prioritize restructuring over foreclosure,

• offer internal refinancing solutions,

• maintain direct human oversight.

Foreclosure is a last resort, not a business model.

Sterling Private Capital provides alternative residential mortgage solutions in compliance with applicable U.S. federal and state laws.

All loans are subject to underwriting, documentation, and legal review.
Submission of an application does not constitute loan approval.