Non-QM rate-lock volume rose 8% from August, according to Optimal Blue’s September Market Advantage report, even while total lock volume fell 2.1% month over month and 26.1% from a year earlier.
Non-QM’s gains went beyond taking a larger slice of a shrinking market. Lock volume actually increased.
Non-QM loans represented about 12% of September locks, up 1.17 percentage points from August and 4.78 points from a year earlier, according to the report. Meanwhile, the company’s 30-year conforming fixed-rate index climbed 67 basis points during September to finish the month at 7.39%.
For originators hunting for production, the report points toward business that does not depend on a rate-driven refinance wave. It also complicates the idea that Non-QM growth is simply an investor-loan story.
“What stands out in September is how much product mix is doing the work of keeping purchase activity moving,” said Brennan O’Connell, director of data solutions at Optimal Blue. “Conforming lost share while Non-QM volume grew and ARM usage reached its highest level seen in our report.”
More Than A DSCR Story
Investor and debt-service coverage ratio loans accounted for 33.3% of September Non-QM activity. Bank-statement loans represented 29.9%, while the report’s “all other” category made up 36.8%.
Investor/DSCR lending remained a much larger piece of the segment than a year ago, gaining 5.04 percentage points. But its share fell 1.86 points from August. Bank-statement share edged up 0.10 point, while “all other” gained 1.76 points.
That makes the month’s expansion broader than an investor/DSCR share gain. The combined investor category still supplied roughly a third of Non-QM activity, but other expanded-guideline programs increased their weight within the segment.
The report does not break down that catchall category into individual products or provide separate monthly volume-growth figures for each Non-QM category. It also combines investor and DSCR loans, preventing a clean read on DSCR alone.
September extends a trend NMP reported in August’s data, when Non-QM and expanded-guidelines loans reached 11.3% of total locks. The latest report puts the segment’s share 3.57 percentage points above its level three months earlier.
The Refi Business Is Missing
Total locks fell 26.1% from September 2025, when lower rates fueled a wave of refinancing.
Optimal Blue’s report for that month showed rate-and-term refinance locks jumping 153% from August, lifting refinance share to 39%. The conforming rate ended September 2025 at 6.32%.
This September, refinance share was just 18%. Rate-and-term refinance volume fell 13.4% from August and 82% from a year earlier. Cash-out refinance locks declined 7.6% monthly and 22.9% annually.
Purchase locks held up considerably better, slipping just 0.3% from August and 0.4% from September 2025. They accounted for 82% of total activity, although purchase volume remained 20.4% below its level three months earlier.
The annual headline therefore describes a market missing last year’s refinance lift, with purchase activity holding close to year-ago levels.
Product Options Matter. So Does Closing.
The shift extended beyond Non-QM. Adjustable-rate mortgages reached 14% of September lock volume, up from 10.5% in August and the highest share in Optimal Blue’s data going back to 2019.
Conforming share fell to 46.2%, while the broader nonconforming category increased to 23.6%. That broader category should not be treated as interchangeable with the report’s separate Non-QM measure.
“In this rate environment, production opportunity is going to depend in part on how broadly lenders can meet borrowers across different credit, income, and payment scenarios,” O’Connell said.
But September also brought a reminder that a lock is not a closing. Purchase pull-through fell 2.70 percentage points to 82.2%, even with purchase lock volume nearly flat.
Optimal Blue’s origination figures track in-process loans through its product, pricing, and eligibility engine, which the company says is used to price and lock more than one-third of mortgages nationwide. They are pipeline measures, not funded-loan totals.
For originators, September’s numbers make a stronger case for revisiting borrowers who did not fit agency guidelines. Non-QM lock volume grew even with conforming rates above 7%, while rate-and-term refinancing remained sharply below last year’s levels.
