The house is in Paradise Valley, or up against the McDowells, or on the water at the Scottsdale waterfront. The price is normal for this market and entirely abnormal for a tax return with a full set of legitimate deductions on it.
And the bank that has held your business accounts for eleven years just told you what your net income was.
Non-QM jumbo exists for precisely this borrower, and it goes considerably higher than most people assume.
How high it actually goes
From CMG Financial's Non-QM Sharp Series guidelines (NMLS #1820, revised 09/21/2026), maximum loan size by tier:
- Sharp Expanded: $3,500,000, maximum 90% loan-to-value
- Sharp Premium: $3,000,000, maximum 90% loan-to-value
- Sharp Standard: $2,000,000, maximum 85% loan-to-value
All three carry a minimum FICO of 660, and across the series mortgage insurance is not required on any loan, regardless of loan-to-value.
That last point is doing a lot of work at this price point. On a conventional or agency jumbo above eighty percent leverage you would be paying mortgage insurance on a very large balance. Here you are not, up to ninety percent.
Which tier you are in is set by housing event history and mortgage lates, not by your preference: Expanded needs 48 months or more clean and 0x30x12, Premium needs 36 months or more and 1x30x12, Standard needs 24 months or more with 2x30x12 and 1x60x24.
The constraint is the ratio, not the cap
Very few self-employed jumbo files fail because the loan amount was too large. They fail on debt-to-income.
The ceilings:
- Expanded: up to 55%, but only with a FICO of 700 or greater, a maximum 80% loan-to-value, primary residence only, no first time homebuyers, and 1.5x residual income
- Premium: up to 50%
- Standard: up to 45%
Read the Expanded conditions carefully, because 55% is the number people quote and it comes attached to four restrictions. In particular, reaching 55% caps your leverage at 80%. You cannot have the highest ratio and the highest leverage on the same file.
That trade shapes the structure. A borrower needing 55% debt-to-income is bringing twenty percent down whether they planned to or not.
The residual income requirement
The 1.5x residual income condition on the Expanded tier at 55% ratio, and the residual requirement generally, work off a table:
Residual income equals gross qualifying income less monthly debt as included in the debt-to-income ratio. If the loan is a higher priced mortgage loan, or if the debt-to-income ratio exceeds 43%, minimum monthly residual income is required: $1,500 for a one person household, $2,500 for two, plus $150 for each additional household member.
Note the trigger. Any file above 43% debt-to-income carries a residual income test, not just the ones at the top of the range. On a jumbo file with a large payment and a large household, that test is real and it should be run early.
Reserves at this size
- Expanded: 6 months minimum
- Premium: 3 months
- Standard: 3 months
Six months of a jumbo housing payment is a substantial documented sum, and it is in addition to your down payment and closing costs.
On a refinance there is relief: cash-out can be used as reserves on all three tiers. On a purchase there is not, so the cash requirement should be calculated before you are writing offers rather than after.
Interest only, where it fits
Expanded: interest only eligible, minimum 700 FICO, maximum 85% loan-to-value. Premium: interest only eligible, minimum 700 FICO, maximum 80% loan-to-value. Standard: interest only not permissible.
Interest only is genuinely useful for a business owner with seasonal or lumpy income, because it lowers the required monthly outlay and lets you pay principal when cash allows rather than on a fixed schedule.
Two cautions. It qualifies differently, with the coverage and ratio math run on the interest only payment where the program allows it, and the amortizing term at the end of the interest only period is shorter, so the payment step-up is real. Know what the payment becomes, not just what it starts at.
Documentation is where the purchasing power is
At this price point, the difference between documentation routes is the difference between houses.
Bank statements, twelve or twenty-four consecutive months. Business statements take an expense factor by type and headcount: 15%, 30% or 50% for a service business, 25%, 50% or 85% for a product business, then multiplied by your documented ownership percentage. Personal statements take no expense factor.
Third-party prepared P&L, with depreciation, depletion, amortization, casualty losses and other non-recurring expenses added back, validated against statements within plus or minus 10% of total qualified deposits. Prepared by a CPA, tax attorney, enrolled agent, CTEC member or PTIN holder who filed your last two years of business returns and is unrelated to you. Borrower prepared P&Ls are never permitted.
Third-party prepared expense ratio, floored at 15%, unavailable if you filed your own business returns.
Streamline documentation, one year of business and personal returns plus K1s and a year to date P&L.
Asset depletion or asset qualifier, if you have the portfolio for it.
On the Standard tier, the P&L, expense ratio, asset and WVOE routes are not eligible. If falling to Standard removes the route your business needs, and you are within a couple of months of the next tier, waiting is the better financial decision.
Property realities at this price
Declining markets carry a 5% loan-to-value reduction. At three million dollars that is a hundred and fifty thousand dollars of down payment appearing late in the process. Structure with margin.
Non-warrantable condos are capped at 75% loan-to-value and combined loan-to-value with no cash-out. Luxury condominium projects with substantial commercial space or high investor concentration are common in this market and they are exactly the projects that fail warrantability.
Order of operations
- Establish your tier from housing history. It sets your ceiling on everything.
- Run all available documentation routes and take the highest defensible income.
- Calculate debt-to-income against the tier ceiling, and run the residual income test if you are above 43%.
- Decide leverage with the ratio trade in view, since 55% caps you at 80% loan-to-value.
- Document reserves at the tier requirement before you write an offer.
- Check the property for project and market adjustments before the appraisal, not after.
Common questions
How large can a self-employed non-QM loan be? $3.5 million on the Expanded tier, $3.0 million on Premium and $2.0 million on Standard, with maximum leverage of 90%, 90% and 85% respectively.
Is there mortgage insurance on a non-QM jumbo? No. Mortgage insurance is not required on any loan in the series, regardless of loan-to-value, which is a real advantage over agency financing above eighty percent.
What is the maximum debt-to-income on a jumbo non-QM loan? Up to 55% on Expanded, but only with a 700 or greater FICO, a maximum 80% loan-to-value, primary residence only, no first time homebuyers and 1.5x residual income. Premium allows up to 50% and Standard up to 45%.
What is the residual income requirement? For a higher priced mortgage loan or any file above 43% debt-to-income: $1,500 monthly residual for a one person household, $2,500 for two, plus $150 for each additional member.
Can I get an interest only jumbo? On Expanded to 85% loan-to-value and Premium to 80%, both requiring a minimum 700 FICO. Interest only is not permissible on the Standard tier.
How many reserves do I need on a jumbo purchase? Six months on Expanded, three months on Premium and Standard. On a refinance, cash-out proceeds can be used as reserves.
Related reading
- Self-employed and business owner home loans, the full index for this topic
- One Late Payment: How Housing History Moves You Between Non-QM Tiers
- The Expense Factor Table: Why Your Industry Decides Your Qualifying Income
- Self-Employed Cash-Out Refinance: Pulling Equity Without Two Years of Returns
Why bring this file to us
- We size the file against the ratio ceiling, not the loan cap. Self-employed jumbo files fail on debt-to-income far more often than on loan amount.
- We plan the reserve requirement early, because six months of a jumbo payment is a serious number and it is documented, not estimated.
- We run every documentation route, since at this price point the gap between the best and worst route is measured in hundreds of thousands of dollars of purchasing power.
- Broker model. Multiple investors rather than one bank's shelf, which is what a file like this needs when the first answer is no.
- You talk to the principal. Ricky Khamis is President of EPiQ Lending and a Certified Mortgage Planner, NMLS #173141, originating mortgages since 1999. Direct line: (480) 999-9842.
EPiQ Lending is NMLS #1936984, at 7975 N. Hayden Road, Suite A-101 in Scottsdale. Verify all of it before you trust any of it: Ricky's EPiQ Lending profile, the Scottsdale branch, and the license itself at NMLS Consumer Access. Hold every lender to that standard, including us.
Tell me the price point and how your business documents, and I will tell you whether the constraint is the loan size or the ratio. It is almost always the ratio.
Program figures in this post come from the CMG Financial (NMLS #1820) guideline set named above, as published on the revision date given. CMG Financial is the parent company of EPiQ Lending. These figures describe one investor's program at one point in time. Other investors price and underwrite the same borrower differently, guidelines change without notice, and nothing here is an offer of any specific program or terms. Confirm current eligibility on your own file before you plan around any of it.
Equal Housing Opportunity. This is general information, not a commitment to lend or an offer to extend credit. Rates, terms, and program guidelines change and depend on credit approval, property appraisal, income and asset verification, and other qualifying factors. Not all applicants will qualify. Non-QM, asset-based and business purpose financing carry different pricing, terms and consumer protections than agency financing. Consult your tax advisor regarding the tax treatment of any income or distribution strategy.
Find out which documentation option qualifies you for the most
Bank statements, a third-party P&L and full documentation routinely produce very different qualifying income from the same business. Tell me the shape of yours and I will run all three.
