Our Underwriting Methodology

In-house underwriting

Total Quality Lending is a direct lender. Every loan we originate is underwritten by our own underwriters against our own published guidelines. We are not a mortgage broker — files are not shopped between wholesale lenders, and there is no third-party AUS ping-pong between submission and approval.

The practical effect for borrowers: one set of conditions, one underwriter to satisfy, one timeline. When a question comes up during underwriting, the loan officer and the underwriter are on the same team and resolve it the same day — not in a 48-hour broker-to-wholesaler round trip.

Property-based qualification (DSCR)

For DSCR loans we qualify the property, not the borrower’s personal income. The core calculation is the Debt-Service Coverage Ratio:

Rental income is sourced from the appraisal’s rent schedule — Form 1007 for single-family rentals and Form 1025 for 2–4 unit properties. For short-term rentals we accept an AirDNA market projection or 12 months of operating history, whichever is stronger.

Borrowers are still verified for credit, assets, and US-citizenship/eligibility, but W-2 income and tax returns are not part of the qualification math.

Alt-doc income paths (Prime Time)

Our Prime Time program offers multiple alternative-documentation paths to qualify income for borrowers who don’t fit a traditional W-2 + tax-return profile:

• Bank statement: 12 or 24 months of personal or business bank statements; income calculated from net deposits with a documented expense factor.
• 1099 only: 12 or 24 months of 1099 forms; income calculated from gross 1099 receipts less a standard expense ratio.
• P&L only: CPA-prepared profit-and-loss statement covering the most recent 12 or 24 months.
• Asset utilization: Eligible assets divided across the loan term to derive a qualifying income.
• Written VOE: For W-2 borrowers whose file is otherwise alt-doc, a written verification of employment can stand in for paystubs.

Borrowers can stack multiple alt-doc paths in a single file when it strengthens the qualifying income (subject to program guidelines).

Foreign National flexibility

For foreign national borrowers we underwrite without requiring a US Social Security Number. We accept:

• A valid passport plus a US visa or a documented basis for legal presence (where applicable).
• An ITIN in lieu of an SSN for tax-ID purposes — see the IRS ITIN program for the official definition.
• International credit references from home-country banks, lenders, or credit bureaus when a US credit file is thin or absent.
• Foreign asset verification via international bank statements and CPA letters.

Foreign national files are vetted against OFAC sanctions lists. We do not lend to citizens or residents of OFAC-sanctioned jurisdictions.

Risk-based pricing

Each loan is priced based on the layered risk profile of the file, not on a flat borrower-tier system. The primary inputs:

• FICO — qualifying credit score from the middle of three bureau reports (or the lower of two).
• Loan-to-Value (LTV) — the requested loan amount as a percent of the appraised value.
• DSCR ratio (DSCR programs) — files with a DSCR above 1.10 generally price better than break-even files.
• Property type — SFR vs 2–4 unit vs short-term rental vs condotel, each carrying its own price grid.
• Occupancy — investment, second home, or primary.
• Prepayment-penalty election — DSCR borrowers can buy out the prepay penalty for a coupon hit, or accept the penalty for a lower rate (subject to state law).

Compliance review

Every loan we originate is reviewed against:

• The CFPB’s Ability-to-Repay (ATR) rule for owner-occupied consumer loans.
• State-specific overlays from the TQL guideline — for example, DSCR is not available on 2–4 unit properties in certain states; certain states prohibit prepayment penalties or cap them.
• Anti-predatory-lending checks at both the federal and state level, including high-cost-loan tests.
• Equal-credit / fair-lending standards under ECOA and the Fair Housing Act.

Decision timeline

Typical decision-and-close timeline from a complete application to funded loan is 15 to 21 days. We hit the 15-day mark most often on:

• DSCR purchases where the appraisal and rent schedule arrive promptly and there are no chain-of-title surprises.
• Alt-doc files where the borrower delivers all bank statements / 1099s / P&L on day one.
• Foreign national files where international banking documentation arrives at the same time as the application.

The step-by-step breakdown of those 15 days is on our Underwriting Process page.

We currently lend in 43 states and the District of Columbia. State eligibility and overlays are at Licensing & Regulatory Compliance.