A major new option is coming to the non-QM space for those in need a mortgage that falls outside the traditional credit box.
PennyMac Financial Services, Inc. (NYSE: PFSI) is rolling out a suite of non-qualified mortgage (non-QM) products via its Correspondent Group, set to launch on September 22nd, 2025.
These innovative offerings are designed to open doors for borrowers who don’t fit the more rigid criteria of today’s conventional loans.
At the same time, Pennymac will provide the financial backing to smaller non-QM lenders so can make loans to a more diverse group of borrowers.
This could greatly expand the reach of non-QM lending, which has already seen explosive growth over the past decade.
A Look at Pennymac’s New Non-QM Products
- Full Documentation: Qualify with standard docs like W-2s, pay stubs, and tax returns
- Streamlined (12 Months): Use just 12 months of income for a faster process
- Bank Statement: Verify income with 12–24 months of bank statements, ideal for self-employed borrowers
- Asset Depletion: Qualify using liquid or investment assets, great for retirees
- Asset Qualifier: Prove repayment ability with assets like savings or stocks
- 1099: Use 1099s to qualify (for freelancers or contract workers)
- Verbal Verification of Employment (VVOE)
- Options for non-permanent residents
- Focus will be on A+, A, A- borrowers (no subprime)
Pennymac’s Correspondent Group is rolling out a solid lineup of non-QM loans tailored to meet the needs of a diverse set of borrowers.
This includes debt service coverage ratio loans (DSCR), which are popular with real estate investors because they take into account the cash flow generated by the property rather than the borrower’s personal income.
They will be focusing on so-called A+, A, and A- credit tiers, meaning creditworthy borrowers who don’t qualify for QM loans for one reason or another.
That means it’s not another form of subprime, but rather a gap in the market where they see a need that can be filled by a large lender like themselves.
Alex Boand, Chief Correspondent Production Officer at PennyMac Correspondent Group, said, “Our non-QM offerings are about unlocking opportunities for our Pennymac Correspondent clients and the borrowers they serve.”
“The non-QM space continues to grow, and we’re excited to offer a competitive, high-quality product line to meet demand among our clients.”
Beyond DSCR, they will also offer non-QM options that use full documentation, Streamlined doc (12 Months), and bank statements, ideal for self-employed borrowers.
This allows borrowers to submit between 12–24 months of bank statements to demonstrate qualifying income.
Those who have plenty of assets and unsteady income can take advantage of their asset depletion, a good solution for retirees or wealth-based borrowers who can qualify based on liquid or investment assets.
In addition, their Asset Qualifier program uses asset-based calculations to determine repayment ability.
There are also options for independent contractors or freelancers who rely upon 1099 income, along with Verbal Verification of Employment for non-traditional employment scenarios.
“These solutions are built to meet the real needs of today’s diverse borrower base,” says Nick Pabarcus, Managing Director and Non-QM Sales Leader at PennyMac.
“Whether someone is a self-employed professional using bank statements or an investor relying on Debt Service Coverage Ratio, our Non-QM suite provides flexible, well-structured options.”
Pennymac Is Already One of the Nation’s Biggest Mortgage Players
PennyMac Financial Services is one of the largest mortgage companies in the United States, working primarily via the correspondent channel.
However, they also operate a wholesale lending division for mortgage broker partners and a retail, direct-to-consumer platform that is growing steadily as well.
The company said it originated $134 billion in home loans last year and has $700 billion in serviced loans as of June 30th, 2025, making it one of the country’s largest loan servicers.
To that end, Pennymac expects to retain loan servicing on all non-QM products.
Initially, they will roll out non-QM offerings to delegated correspondent sellers on a best-effort basis.
And non-QM products will be made available through Pennymac TPO (their wholesale channel) beginning in the fourth quarter of 2025.
Founded in 2008, Pennymac employs more than 4,400 workers nationwide and looks to become a leader in the non-QM space.