US non-QM mortgages reach 10% of total originations

Non-QM lending reached $239 billion in 2025, accounting for approximately 10% of all U.S. mortgage originations by dollar volume. Data from Griffin Funding, based on Polygon Research's HMDA analysis, indicates that this trend is continuing, with non-QM surpassing 10% of monthly rate-lock volume as of July 2026.

The growth persists despite a 2021 rule change by the Consumer Financial Protection Bureau that removed Appendix Q, a rigid income-documentation requirement within the Qualified Mortgage rule. Current standards still rely heavily on tax returns to verify income, which often creates barriers for the roughly 16.5 million self-employed Americans, real estate investors, and retirees whose financial profiles do not align with traditional underwriting.

A primary driver for the shift toward private-market documentation programs is the documentation gap in conventional underwriting. Lenders typically calculate qualifying income after business deductions are applied. Consequently, aggressive tax write-offs that lower a borrower's tax liability also lower the income recognized by lenders, making high-earning self-employed individuals appear unable to afford homes despite having sufficient cash flow.