February, 2026 - Oakstreet Mortgage

What are “Alternative” or “Non-QM” Mortgages?

Can’t qualify for a traditional mortgage? You have options.

You may have heard different terms for these specialized loan programs: “Bank Statement Loans,” “DSCR,” “Asset Depletion,” “P&L Loans,” or “No Doc” loans. These are all types of mortgages that fall into the Alternative or Non-QM (Non-Qualified Mortgage) category, and they can be game-changers for borrowers who don’t fit the traditional lending box.

Traditional Mortgages: The Standard Path

Traditional mortgage loans—including VA, FHA, USDA, and conventional conforming and jumbo loans—follow strict federal guidelines on income documentation, property types, credit scores, and debt-to-income ratios. When you qualify, government backing or GSE guarantees reduce lender risk, resulting in lower interest rates and down payment requirements as low as 0-3%.

But not everyone fits these guidelines. Self-employed with business deductions? Unique property? Credit issues? Real estate investor with multiple properties? Alternative loans offer the flexibility traditional loans cannot.

Trade-off: Alternative loans typically require larger down payments—10-15% for primary residences, 20-25% for investment properties.

Alternative Loan Types Explained

Bank Statement Loans

Best for self-employed borrowers with strong cash flow but lite tax-reported income. We use your consistent monthly bank deposits over 12-24 months to calculate qualifying income instead of tax returns.

Profit & Loss (P&L) Loans

We can use a Profit and Loss statement prepared by you or your bookkeeper as the income basis. A CPA or tax professional must review and sign off on the P&L.

DSCR Loans (Debt Service Coverage Ratio)

For rental properties only. We don’t evaluate your personal income at all—just whether the property’s rental income exceeds the mortgage payment. If the property supports itself, you qualify. Ideal for investors with complex income situations. Requires 20-25% down payment.

Asset Depletion Loans

No job or traditional income? If you have substantial savings, stocks, bonds, or retirement accounts, we convert those assets into calculated monthly income that qualifies you for a mortgage.

True “No-Doc” Loans

We work with select exempt institutions offering true no-documentation loans for specific situations. These work well for properties with substantial equity where you can articulate a logical repayment strategy.

Other Non-QM Options

Additional programs address credit flexibility, foreign nationals, special property types (unique condos, rural properties, mixed-use), and complex income scenarios.

Finding Your Solution

Every borrower’s situation is unique. Whether you’re a business owner, real estate investor, retiree, or rebuilding after a financial setback, there’s likely a mortgage solution for you.

Ready to explore which alternative loan program fits your needs? Contact me for a free consultation. I’ll analyze your specific situation and find the best option to help you achieve your real estate goals.

15-Year Mortgages: The Tremendous Value Most Homebuyers Overlook

I sat across from a young couple last week who’d been pre-approved by their bank for a 30-year mortgage at 6%. They were proud—and honestly, getting approved is an accomplishment. But when I asked if they’d considered a 15-year loan, they looked at me like I’d suggested buying the house with cash.

“We surely could not afford a 15-year payment,” they said.

Here’s the deal: Too many people don’t even evaluate the 15 year option, and it’s costing them hundreds of thousands of dollars.

Can you afford the payment and save big?
First make sure you have a handle on the math.

Let me break this down with real numbers. This table below shows the payment comparisons for 15 and 30 year fixed rate loans from $100,000 to $1,000,000. The payment factor is 1.35. Simply multiply any 30 year P&I payment by 1.35 to get the approximate 15 Year P&I Payment:

We are currently offering 15 Year fixed at about 5.00% APR and 30 Year fixed at about 5.80% APR to our best qualified borrowers. (Rates change daily and depend on your specific credit profile. Not a commitment to lend.)

Loan Amount	30 Year Fxd Pmt	Factor	15 Year Fxd Pmt
$100,000	$586.75	1.35	$792.12
$200,000	$1,173.51	1.35	$1,584.23
$300,000	$1,760.26	1.35	$2,376.35
$400,000	$2,347.01	1.35	$3,168.47
$500,000	$2,933.77	1.35	$3,960.58
$600,000	$3,520.52	1.35	$4,752.70
$700,000	$4,107.27	1.35	$5,544.82
$800,000	$4,694.02	1.35	$6,336.93
$900,000	$5,280.78	1.35	$7,129.05
$1,000,000	$5,867.53	1.35	$7,921.17

For a $400,000 loan for example, the monthly payment is about $821/month higher with a 15 year loan. But you save over $275,000 in interest over the life of the loan. Check out your savings at different points in the table below:

$400,000 Loan — 30 Yr Fixed @ 5.8% vs 15 Yr Fixed @ 5.0%
End of Year	Interest Saved
5	$24,087
7	$38,847
10	$67,379
15	$134,815
20	$207,240
30	$275,553

Read that again. Two hundred and seventy-five thousand dollars.

Here’s What Most People Don’t Realize

After 25 years in this business, I’ve watched clients choose the “safer” 30-year option over and over. I get it—the lower payment feels more comfortable. But here’s the real talk: that comfort comes with an enormous price tag.

The 15-year mortgage gives you:

A lower interest rate. Usually 0.5% to 0.90% less than the 30-year. Lenders reward you for taking less risk.
Forced equity building. You’re paying down principal aggressively from day one, not just feeding the interest machine.
Freedom in half the time. Imagine being mortgage-free at 50 instead of 65. That’s a completely different retirement picture.
Less total risk. You owe less, faster. If life throws you a curveball, you’ve got more equity to work with.

The Payment Reality Check

Bottom line: Yes, $821 more per month is real money. But let’s look at what you’re actually getting.

That extra $821 isn’t disappearing—it’s building your equity at warp speed. On a 30-year loan, your first payment sends maybe $1,328 to principal. On the 15-year? You’re putting $1,822 toward principal right out of the gate.

When It Makes Perfect Sense

The 15-year mortgage is a tremendous value if you:

Have stable income you can count on
Want to build wealth through equity, not just hope for appreciation
Are in your peak earning years (40s-50s typically)
Plan to stay in the home long-term
Value being debt-free over keeping monthly payments low

When the 30-Year Makes More Sense

Look, I’m not here to sell you something that doesn’t fit. There are absolutely times when the 30-year is the right call:

You’re stretching to buy in a competitive market and need the lower payment
You’re early in your career with income expected to grow substantially
You’ve got other high-interest debt to tackle first
You’re investing heavily in retirement accounts and maxing out tax-advantaged options
The payment difference genuinely strains your monthly budget

But here’s my challenge: Don’t just assume you can’t afford the 15-year. Run the actual numbers. Look at your budget honestly. You might surprise yourself.

If you want to run the numbers on your specific situation—whether you’re buying, refinancing, or just exploring options—let’s talk. No sales pitch, just straight intel on what makes sense for your circumstances.

Call or email me anytime for additional numbers or details.

Robert Musseman
703-309-2537
robm@oakstreet.coregrowthexperts.com
Senior Loan Officer, Oak Street Mortgage
NMLS ID# 85152 | Company NMLS ID# 1618618
Visit www.nmlsconsumeraccess.com for licensing information

Mortgage and Real Estate Tax Benefits for 2026: What Homeowners and Investors Need to Know

Here’s a question I get constantly from clients: “Rob, what can I actually write off on my taxes when it comes to my home or rental property?”

After 25 years in this business, I can tell you that understanding your tax benefits isn’t just smart—it’s mission-critical to making the most of your real estate investment. Whether you’re sitting in your primary residence in Fairfax, or managing a rental property in Silver Spring, the tax code gives you some serious advantages. But only if you know how to use them.

I have teamed up with one of our area’s finest real estate and tax focused CPA’s, Sohail Syed to get you what you need to know for your 2025 tax returns and 2026 planning.

So here it is. I hope you will save, and send this article link to anyone interested in maximizing the tax advantages of real estate they own this year.

Let me break this down into two categories: benefits for your primary residence, and benefits for rental properties. The rules are different, and knowing the difference can save you thousands.

Primary Residence Tax Benefits

Your primary home—where you actually live—comes with some valuable tax perks. Here’s the intel on what you can deduct and what you need to watch out for in 2026.

Mortgage Interest Deduction

This is the big one. You can deduct mortgage interest on loans up to $750,000 if you purchased your home after December 15, 2017. If you bought before that date, you’re grandfathered into the old $1 million limit.

Real talk: In the DC metro area where home prices run high, this limit actually affects more people than you’d think. I’ve worked with plenty of families in Arlington and Bethesda who bump up against this ceiling.

New for 2026-Big Beautiful Bill: Good News! Mortgage insurance premiums, both PMI and FHA MIP are now again allowed to be deducted as interest.

Bottom line: If you’re paying a mortgage, you’re likely deducting that interest. Your lender sends you a 1098 form each January showing exactly what you paid in interest. Keep it with your tax documents.

Property Tax Deduction (SALT Cap)

[See Sohail’s Big Beautiful Bill Update below] You can deduct state and local taxes (SALT), including property taxes, up to $10,000 total ($5,000 if married filing separately). This cap has been in place since 2018.

Here’s what most people don’t realize: the limit includes your state income taxes AND property taxes combined. In high-tax states like Maryland, or if you’re paying DC or Virginia property taxes on a higher-value home, you’ll hit that cap quickly.

I’ve seen families in Montgomery County with $12,000 in property taxes alone, before even counting state income taxes.

New for 2026-Big Beautiful Bill: Good News! For most families the Salt CAP is now $40,000 for 2025, $40,400 for 2026, and increasing an additional 1% per year thru 2029!

Capital Gains Exclusion When You Sell

This is one of the best benefits in the tax code. When you sell your primary residence, you can exclude up to $250,000 in capital gains if you’re single, or $500,000 if you’re married filing jointly.

The requirements:

You must have owned the home for at least two years
You must have lived in it as your primary residence for at least two of the last five years
You haven’t used this exclusion on another home in the past two years

After 25 years doing loans in this area, I’ve seen plenty of families build serious wealth this way. Buy a home in Reston for $400K, live in it for five years while the market appreciates, sell it for $650K, and pocket the $250K gain tax-free. That’s powerful.

Energy-Efficient Home Improvements

The Inflation Reduction Act extended and expanded tax credits for energy-efficient upgrades through 2032. For 2026, you can claim:

****New for 2026-Big Beautiful Bill: Bad News 🙁 This getting phased out and eliminated. Check with Sohail for details.***

Home Office Deduction

This one comes with strict requirements. If you’re a W-2 employee working from home, you can’t claim this anymore—that deduction was eliminated in 2018. But if you’re self-employed and use part of your home exclusively and regularly for business, you can deduct a portion of your housing expenses.

You can calculate it based on square footage or use the simplified method ($5 per square foot, up to 300 square feet). Roger that—it’s not huge money, but it adds up.

Note From Sohail: You actually have 2 methods available for calculating this deduction. The method above is called the “simple method”. The other method is called the “actual method”. Make sure to choose the best one for your situation!

Rental Property Tax Benefits

Now we’re talking about a completely different ballgame. Rental properties are considered business investments, and the tax code treats them accordingly. Translation: way more deductions available.

Mortgage Interest (Fully Deductible)

Unlike your primary residence with its $750K cap, mortgage interest on rental properties is fully deductible as a business expense. No limits. If you have a $1.2 million loan on a rental property in Dupont Circle, you can deduct every penny of that interest.

This applies to mortgages, home equity loans, or lines of credit used to buy, build, or improve the rental property.

Property Tax (Fully Deductible)

That SALT cap?– Doesn’t apply to rental properties. You can deduct 100% of the property taxes you pay on investment real estate. Another rental property in Rockville with $15,000 in annual property taxes? Fully deductible against your rental income.

Depreciation

This is the secret weapon of real estate investing. The IRS lets you depreciate residential rental property over 27.5 years. You take the value of the building (not the land), divide by 27.5, and deduct that amount each year.

Let me break this down with a real example: You buy a rental property for $550,000. The land is valued at $100,000, the building at $450,000. Your annual depreciation deduction is $450,000 ÷ 27.5 = $16,364.

That’s $16,364 you can deduct from your rental income every year, even though you didn’t actually spend that money. It’s a paper loss that reduces your taxable income. Powerful stuff.

Cost Segregation–Depreciation on Steroids!

Investment property owners may be able to depreciate certain components of their rental properties on 5, 7, and 15 year depreciation schedules instead of 27.5 years. Can be a great extra tax deduction if you do it correctly! Ask Sohail for more information about rental property Cost Segregation to deduct depreciation big on your taxes!

Operating Expenses

Pretty much every ordinary and necessary expense to maintain and manage your rental property is deductible:

Property management fees
Repairs and maintenance
Insurance premiums
HOA fees
Utilities (if you pay them)
Advertising for tenants
Legal and professional fees
Travel expenses to manage the property

Real talk: Keep good records. I’ve seen investors miss out on thousands in deductions simply because they didn’t track their expenses properly.

Repairs vs. Improvements

Here’s what most people don’t realize: repairs are immediately deductible, but improvements must be depreciated over time.

Repairs maintain the property in its current condition—fixing a leaky faucet, repainting a room, replacing broken windows. These are fully deductible in the year you pay for them.

Improvements add value or extend the property’s life—new roof, kitchen renovation, adding a bathroom. These get added to your property’s basis and depreciated over 27.5 years.

The line between them can get blurry. When in doubt, talk to your tax advisor.

Qualified Business Income (QBI) Deduction

Rental property owners may qualify for a 20% deduction on qualified business income if they meet certain requirements.

This gets complex quickly and depends on your income level and whether your rental activity qualifies as a trade or business. Bottom line: it’s worth exploring with your CPA or Sohail, especially if you have multiple properties or spend significant time managing them.

1031 Exchange Strategy

This isn’t a deduction, but it’s too important not to mention. A 1031 exchange lets you sell a rental property and defer all capital gains taxes if you reinvest the proceeds into another like-kind property.

After 25 years in this business, I’ve seen investors build substantial portfolios using this strategy. Sell a condo in Alexandria, roll the proceeds into a single-family rental in Fredericksburg, and pay zero taxes on the gain. It requires strict timing and following specific rules, but it’s an incredible wealth-building tool.

Practical Steps You Can Take Right Now

Strategy matters. Here’s what I recommend:

1. Review your current situation. Pull last year’s tax return and see what you actually deducted. Are you maximizing your available benefits?

2. Keep immaculate records. For rental properties especially, track every expense. Use accounting software or at minimum, a dedicated spreadsheet. When April rolls around, you’ll thank yourself.

3. Plan improvements strategically. If you’re going to make energy-efficient upgrades, do it while the credits are generous. If you’re rehabbing a rental property, understand the repair vs. improvement distinction before you start.

4. Consult with professionals. A good CPA like Sohail who understands real estate can save you multiples of what they cost. I’m a mortgage guy, not a tax advisor—but I know enough to know when someone needs specialized guidance.

5. Review your mortgage strategy. If you’re sitting on a rental property with a high-interest loan, or you’re considering buying another investment property, the tax benefits should factor into your financing decisions. Sometimes a larger mortgage makes sense when you can deduct the interest.

Final Thoughts

Real estate remains one of the best tax-advantaged investments available to regular Americans. Whether you’re living in your home in Loudoun County or managing a rental property in DC, understanding these benefits isn’t optional—it’s part of being a smart property owner.

The rules are complex, and they change. What worked five years ago might not be optimal today. But here’s what hasn’t changed: owning real estate, when done thoughtfully, builds wealth. The tax benefits are just the icing on top.

If you’re thinking about buying a primary residence or adding a rental property to your portfolio, and you want to talk through the financing side of things, I’m here. After 25 years and countless transactions in this market, I’ve probably seen your exact situation before.

Give me a call or shoot me an email. Let’s make sure your financing strategy aligns with your overall financial mission.

—Robert Musseman
Senior Loan Officer, Oak Street Mortgage
nmls id: 85152, company nmls id: 1618618
www.nmlsconsumeraccess.org
Serving the DC/VA/MD metro area since 1999

Additional updates and wisdom provided by:
–Sohail Syed, CPA
9254 Mosby Street #B, Manassas, VA 20110
Call Us: (571) 390-5557 • Fax: (202) 318-1521
info@balancecpas.com

Month: February 2026