Non-Prime is a term for loan types that do not fit into the restraints of government lending standards known as Prime, Agency, or A-Paper Lending and defined as Qualified Mortgages.
Non-Prime loans are for borrowers who are on their way to Prime but need a little help before they qualify. Non-Prime loans characteristically are made to borrowers who have had past income and/or credit events that prevent them from obtaining a Prime loan. A Borrower seeking a Non-Prime loan can use alternative documentation to qualify in the form of Bank Statements, Liquid assets, and other forms of income not typically accepted by government lending criteria.
Additionally, Non-Prime loans will allow Foreclosure(s), Bankruptcy(ies), Short Sales, late payment(s), collection(s), charge off(s), etcetera. Non-Prime Loans usually have increased rates of interest and costs for providing access to capital while providing the ability to participate in the economy and housing market.