The Quick Read: You qualify by clearing three separate tests on one file: the building must be one a non-agency program will accept, your income must show up in twelve or twenty-four months of deposits after an expense ratio, and the loan size must fit the leverage and reserve rules for that tier. The building is usually the test that binds first.
- Income comes from consecutive bank statements, personal or business, not traditional personal-income documentation, through select wholesale programs and subject to full underwriting.
- A condotel sits at a lower leverage ceiling than an ordinary condo at every loan size.
- Above $3,000,000 on an investment property, extra overlays apply, and above $4,000,000 every file is reviewed case by case before submission.
- Reserves run 3, 6 or 9 months by loan size, plus more for each other financed property.
- Gross rent is not net cash flow, so underwrite the unit on what the owner actually keeps.
Three Questions Stacked on One File
A condotel file is not one decision. It is three underwriting questions that sit on top of each other, and each one has its own rules.
| Question | What it controls | Where it usually binds |
|---|---|---|
| The building | Whether the project is eligible at all | First, before income is read |
| The income | How much qualifying income the deposits show | Mostly on thin or messy statements |
| The loan size | Leverage, credit floor, reserves | Above $3,000,000 on investment property |
Most borrowers start with income because that is the part they control. Across Lendmire’s wholesale network, the files that stall tend to stall on the building. A strong deposit history does not fix a project that operates like a hotel. So the order below is the order a processor works: define the terms, run the income, clear the building, then apply the size overlays.
Key Terms Defined
Condotel: A condo unit in a building run like a hotel, usually with a front desk, a rental program, or owner-use limits.
Bank statement loan: A mortgage that qualifies a self-employed borrower on deposits in consecutive bank statements instead of traditional personal-income documentation.
Super jumbo: A loan size tier set by each lender, with no official definition from any regulator.
Non-warrantable condo: A condo project that fails standard agency rules for reasons like investor concentration, litigation or commercial space. It is not automatically a condotel.
Rental pool: An arrangement where unit owners share rental revenue with an operator, often with a management agreement attached.
Expense ratio: The share of business deposits treated as operating cost before income is counted.
How the Income Math Works
Income comes from eligible deposits, adjusted for business expenses, then divided by the months in the review period. Through select wholesale programs, that review is 12 or 24 consecutive months of personal or business statements. The bank portfolio program uses 12.
The steps run in this order:
1. Pull consecutive statements. Every month must be there. Transaction histories do not substitute for statements.
2. Screen the deposits. Underwriters remove transfers between your own accounts, gifts, loan proceeds and refunds. Transfers from your own business into a personal account count in full.
3. Confirm ownership. Business statements need at least a 25% ownership stake, and the ownership share scales the income.
4. Apply the expense ratio. Fixed ratios run 20% for a service business with no employees, 40% for one to five employees, and 50% for six or more employees or any product business. An accountant-provided ratio or a profit-and-loss method, capped at 80%, can also apply.
5. Divide by the months. The result is monthly qualifying income, tested against debt-to-income that can run up to 50%.
Here is the effect in percentages. A service business with no employees counts 80% of eligible deposits. A business with six or more employees counts 50%. The same deposits can produce very different qualifying income depending on the ratio, which is why an accountant letter is worth pursuing when the real cost structure is lighter than the default. Personal-account statements usually carry no expense haircut.
The hygiene problems are predictable: large unexplained deposits, commingled personal and business accounts, and declining income across the review window. Document each one before the file goes in. Lendmire’s piece Does Undistributed K-1 Income Qualify on a Super Jumbo Bank Statement Loan? covers a common pass-through question.
Is the Building Eligible?
The building is eligible only if a non-agency program will accept how it operates. The agencies will not, and that exclusion attaches to the project, not to you. Fannie Mae’s Selling Guide bars projects that operate as a hotel or motel, and no credit score or income level cures that. So condotel financing routes to non-QM and portfolio programs.
Classification is a project-level call. Underwriters look for these traits:
- hotel or resort naming or licensing
- a front desk that registers guests
- a rental pool or mandatory management agreement
- owner-use caps or blackout dates
- revenue sharing with the operator
- very small units
Gather the declaration, any rental-program agreement, the HOA budget and financials, litigation disclosure and the lender’s condo questionnaire before you submit. An incomplete questionnaire is a common stall point, and the lender cannot read the building without it.
Property type also sets the leverage ceiling before loan size does:
| Property type | Purchase ceiling | Notes |
|---|---|---|
| Warrantable condo | 85% | Through select wholesale programs |
| Non-warrantable condo | 80% | Subject to full underwriting |
| Condotel | 75% | 65% on a cash-out; 50% on the bank portfolio program |
These are ceilings, not offers. Size and occupancy overlays can pull the number lower.
Where the General Rule Breaks
Most condotel files fit the pattern above. These are the ones that do not.
Hotel-branded residences. A condo above a branded hotel is often non-warrantable because of commercial influence, not a condotel. Filing it under the wrong label can cost leverage, so ask the lender which bucket it falls in.
Voluntary versus mandatory pools. Each non-QM program decides for itself. A voluntary pool with full owner use is reviewed very differently from a mandatory pool that strips owner use, and the second is close to disqualifying on most programs.
Mislabeled buildings. A condo with no hotel operations can still get tagged a condotel because units appear on booking platforms. Verify the project’s real operating status and bring documents that show it.
Non-warrantable is not condotel. Investor concentration, litigation, new construction and commercial space make a project non-warrantable. They do not make it a condotel, and the leverage cap differs.
State building rules. Structural-safety and reserve requirements in some states can affect individual buildings. Treat them as a building-level question and ask for the building’s current status. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Occupancy. A second-home condotel and an investment condotel are different files. Second homes are one-unit only. Investment files are business-purpose.
What Changes at Super Jumbo Size
Super jumbo is a lender-defined tier. For scale, the FHFA conforming loan limit announcement sets the current baseline one-unit limit at $832,750. Anything above the local limit is jumbo, and super jumbo is wherever each lender draws its own line.
Lendmire’s network uses two programs for these files. The portfolio non-QM program carries bank-statement files up to $6,000,000. A second, size-based program begins above $4,000,000, overlaps the portfolio program to $6,000,000, and stands alone above it.
On an investment property purchase, the size ladder steps down: 80% from $2,000,000 to $2,500,000, 75% from $2,500,000 to $3,000,000, and 60% from $3,000,000 to $4,000,000, through select wholesale programs and subject to underwriting. The lower of the size ladder and the property-type ceiling governs. So a condotel at 75% on purchase is limited by its type at smaller sizes and by the size ladder in the $3,000,000 range.
Above $4,000,000, every file is reviewed case by case before submission. On the bank portfolio program, ceilings run 65% to $5,000,000, 60% to $10,000,000 and 55% to $30,000,000, on review. Condotels sit lower on that program, around 50%, also on review.
Above $3,000,000 on an investment property or second home, the overlays tighten:
- 700 credit floor
- clean 0x30x24 housing history
- 48-month seasoning after any credit event
- U.S. citizens and permanent residents only, with no non-occupant co-borrowers
- no rural property
- cash-out proceeds cannot satisfy reserves
Below that line, the credit floor is typically 660 on the portfolio program and 680 on the bank portfolio program. Reserves run 3 months to $500,000, 6 months to $1,500,000 and 9 months above that, plus about 2 months for each additional financed property up to a 12-month maximum. First-time investors typically need 12 months.
On a cash-out, proceeds are unlimited at or below 60% LTV. Above 60% on the portfolio program, cash-in-hand is capped at $1,500,000. Because a condotel cash-out tops out at 65%, that cap can matter on bigger files. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Bank Statement, DSCR or Asset-Based?
Pick the path that matches how your income and the unit actually behave.
| Path | Reviewed on | Fits best when |
|---|---|---|
| Bank statement | Your deposits | Self-employed, strong cash flow, thin unit coverage |
| DSCR | The unit’s rent | Rent clearly covers the monthly obligation |
| Asset-based | Liquid assets | Large liquidity, uneven income |
Bank statement qualifies you. DSCR qualifies the unit, and a DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. On a condotel, pool splits and operator fees cut into that coverage, so the number can look weaker than the gross rent suggests. Select lenders in the network offer programs below 1.00 coverage, but leverage and terms adjust when they do. Read more in the complete DSCR loans guide.
Asset paths are narrower. The asset allowance divides liquid assets by 36, 60 or 84 months and is limited to primary and second homes, so it does not apply to an investment condotel. Assets-only qualifies with no debt-to-income test when U.S. liquid assets equal the loan plus closing costs plus sixty months of any net loss on other residential property. Retirement accounts count at 70% (80% at 59.5 or older). Business funds, gifts, cryptocurrency and unvested stock never count.
Gross Rent Versus What You Keep
Investment condotels are business-purpose loans. They are reviewed differently from an owner-occupied mortgage, and lenders still apply their own investor underwriting.
Gross can pass the lender’s test and still leave thin real returns. One investor thread on a St. Petersburg condotel reports the owner keeping about a third of gross rent. It is a single anecdote, not a market average. Another buy-and-hold discussion describes revenue sharing with the operator, furniture and renovation capital calls, and limited control over expenses.
Resale is the other issue. Financing options are narrow, so the buyer pool is thin, and that can depress the exit price. Underwrite the unit on net income, and model the exit before you buy.
Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction. Short-term rental rules can vary by city, county, HOA, and property type, so investors should confirm local rules before relying on projected rental income.
File Checklist and Common Stalls
Have these ready before submission:
- consecutive statements for the full review period, with large deposits explained
- ownership documents showing at least 25% for business statements
- an accountant letter if you are pursuing a lower expense ratio
- the condo declaration, rental or pool agreement, HOA budget and financials
- the completed condo questionnaire
- reserves documentation, with cash-out proceeds excluded where overlays apply
- entity documents if the unit closes in an LLC, subject to lender program eligibility
Files stall for the same few reasons. The questionnaire comes back incomplete. The building is classified as a hotel operation. Deposits mix personal and business money. Valuation is thin because few comparable sales exist, so the appraisal desk needs time to confirm the right form and comps. If you hit a decline, the fix is usually one of three things: switch income method, reduce leverage, or move the file to the other program.
Frequently Asked Questions
Can a condotel qualify for a conventional loan if my credit and income are strong?
No. The exclusion is based on how the building operates, not on the borrower. Condotel financing goes through non-QM and portfolio programs, which review the project and the borrower separately.
Does a condotel make a bank statement loan harder to get?
It redirects the file, but the income math is the same as on any other property. The change is on the property side: lower leverage, a closer project review and more documents.
How much can I borrow against a condotel?
Ceilings run 75% on a purchase and 65% on a cash-out through select wholesale programs, or about 50% on the bank portfolio program, on review. The size ladder can pull that lower, and every file above $4,000,000 is reviewed case by case. All figures are subject to full underwriting.
Do reserves change as the loan gets bigger?
Yes. Reserves step from 3 to 6 to 9 months as the loan grows, with about 2 more months per additional financed property up to 12. Above $3,000,000 on an investment property, cash-out proceeds cannot count toward reserves.
Should I use bank statements or DSCR on a condotel?
It depends on where the strength is. If your deposits are strong and the unit’s net rent is thin after pool splits, bank statements usually fit better. If rent clearly covers the monthly obligation, DSCR can work.
Next Step
If you are financing a high-balance property on business or personal bank statements and want to see how the numbers work, Lendmire can help you compare super jumbo bank statement loan options based on your deposits, the property, credit profile, leverage, and your goals. Lendmire is a broker that shops multiple wholesale programs, and nothing here is a commitment to lend. Its consumer mortgage lending is licensed in 16 states: AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA and WA.
Self-employed borrowers can compare both super jumbo programs on Lendmire’s self-employed mortgages page.
About Lendmire
A DSCR-focused mortgage broker, Lendmire (NMLS# 2371349) places investor financing across 41 markets — 40 states plus Washington, D.C. — with DSCR eligibility generally reviewed by the lender on property cash flow instead of tax returns, subject to lender guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in 2025 and 2026.
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your home or investment property. No commitment required.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Fannie Mae Selling Guide, ineligible projects
2. FHFA conforming loan limit announcement
3. BiggerPockets: condotel in St. Petersburg
4. BiggerPockets: buy-and-hold condotel units
This article is part of Lendmire’s super jumbo bank statement loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How To Use A Personal Account For A Super Jumbo Bank Statement Loan · Super Jumbo Bank Statement Cash-Out Documentation for a Loan-Out Company · How to Consolidate Debt With a Super Jumbo Bank Statement Cash-Out
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.