The classification of what constitutes nonprime is flexible because it’s the lenders who will make and package these loans for the public.
For example, lenders can originate these mortgages using alternative documentation such as personal and business bank statements and other income sources. This lending practice results in stated income loans and bank statement loans.
Another instance would be interest-only mortgages whose roots are primarily subprime. Subprime primarily caters to bad credit borrowers or those with high LTVs but these loans have been closely regulated more than ever and today’s interest-only loans are safer compared to their predecessors.
Alternative-A loans can also be grouped as non-prime. Examples of this type of loans are low/no documentation loans, stated income/stated asset (SISA) mortgages, and no income/no asset (NINA) loans.