The Quick Read: A non-QM lender does not pick a flat percentage. It runs several leverage tests on the same condo and lets the strictest one set the maximum loan, and your down payment is the price minus that loan. On a $3M condo, loan size, occupancy and building type each cap leverage, and the lowest cap wins.
- Through select wholesale programs, subject to full underwriting, a $3M condo typically tops out around 80% leverage on a purchase. That holds for a primary residence, a second home or an investment property, assuming a 720+ credit score.
- A hotel-style condo (a condotel) typically caps at 75% on a purchase. That means a larger down payment.
- The loan amount, not the price, picks the leverage band. Crossing a band edge can cut leverage sharply.
- Income can come from bank statements, assets or the property’s rent, depending on how you hold the unit and what you do for a living.
- Down payment is only part of the cash you need. Closing costs and reserves come on top.
Why Down Payment Is Sized, Not Set
Most people expect a single number, like 20% or 25% down. At this price point, it works like a ladder instead. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Every lender in a wholesale network publishes a grid. The grid says how much leverage it will allow at each loan size, for each occupancy type, on each kind of property. The lender applies that grid to your file and the lowest ceiling wins. Whatever the loan can’t cover, you fund.
That is why a $3M condo can need different down payments for different buyers. Occupancy changes the grid, and so does the building. So does the credit tier and the documentation path.
LTV (loan-to-value) is the loan amount divided by the property’s value. A lender uses the lower of your contract price or the appraised value. A strong appraisal never raises the loan, and a weak one can shrink it.
How a Non-QM Lender Sizes Down Payment, Step by Step
Here is the sequence a file follows. The order matters because each step can only lower the number.
Step 1: Fix the value. The lender takes the lower of the contract price and the appraisal. On a $3M contract, a lower appraisal means every percentage below applies to the lower figure. You cover the gap in cash.
Step 2: Find the band. Super jumbo leverage is keyed to the loan amount. Wholesale programs here carry loans from $300,000 to $30,000,000 across two programs. Each program has its own ladder, and leverage steps down as the loan grows. Past $4,000,000, every file is reviewed case by case before submission.
Step 3: Pick the occupancy cell. Primary residence, second home and investment property each have their own column. The three often run close in the middle of the ladder and pull apart further up.
Step 4: Apply the property-type ceiling. Warrantable condos typically reach 85%, non-warrantable condos reach 80% and condotels reach 75% on a purchase. A warrantable condo is a building that meets the standard project rules lenders and agencies use to judge condo health, such as owner-occupancy mix, litigation and reserves. A non-warrantable one fails at least one of those tests. Enact’s explainer on non-warrantable condominiums lists the common triggers, including investor concentration, commercial space and pending litigation.
Step 5: Apply credit and overlays. The leverage cells at this size generally want a 720+ credit score. Extra overlays kick in above certain loan sizes. We cover them below.
Step 6: Subtract. The loan is the value times the winning percentage. The down payment is the remainder.
Step 7: Add the rest. Closing costs, prepaid items and reserves sit on top of the down payment.
The $3M Condo Under Each Occupancy Type
Here is how the same $3M purchase sizes across the three occupancy types. Figures are ceilings through select wholesale programs, subject to full underwriting.
| Occupancy | Max purchase LTV | Credit tier | Down payment |
|---|---|---|---|
| Primary residence | 80% | 720+ | 20% of price |
| Second home | 80% | 720+ | 20% of price |
| Investment property | 80% | 720+ | 20% of price |
At 80% on a purchase, the loan lands in the band from $2,000,000 to $2,500,000. That band allows 80% for all three occupancy types.
The table looks flat, but the underlying grid is not. Two things differ.
First, the investment column adds a second test. A rental is also sized on rent coverage. The lender compares the unit’s monthly rent to its full monthly obligation, including association dues. That is the DSCR test. DSCR stands for debt service coverage ratio. Most programs are built around a coverage benchmark of about 1.00x, though some select lenders in the network will review below that. When they do, leverage and terms adjust. Leverage and coverage are separate tests, and you have to pass both.
Second, the columns split once the loan grows. In the next band up, the loan range of $2,500,000 to $3,000,000, a primary residence purchase stays at 80%. A second home or investment purchase drops to 75%.
Property Type Sets Its Own Ceiling
Run the same $3M price through the building type and a different test appears. At this size the occupancy ladder already caps a purchase at 80%, so only the condotel ceiling binds.
| Building type | Property ceiling (purchase) | Effective ceiling at $3M price |
|---|---|---|
| Warrantable condo | 85% | 80% (ladder caps it) |
| Non-warrantable condo | 80% | 80% |
| Condotel | 75% | 75% |
A condotel is a hotel-style condo with rental programs, front-desk services or similar features. Lenders treat it as riskier, so leverage typically drops and a down payment of 25% replaces the 20% you would otherwise put down.
The lesson is simple. Before you make an offer, confirm the building’s warrantability and its rental policy. A unit that looks like a standard condo can sit in a project the lender treats as non-warrantable, and a condotel can swing the check by 5 percentage points of the price.
Credit, Reserves and Documentation at This Size
Credit is a gate, and at this price the gate is high. The leverage cells for a $3M condo generally call for 720+ credit. Debt-to-income can run to 50% on most files.
Reserves scale with loan size. Reserves are liquid funds you hold after closing, counted in months of your housing obligation. On most files the requirement is 3 months up to $500,000, 6 months up to $1,500,000 and 9 months above that. Each additional financed property adds 2 months, up to a 12-month maximum. First-time investors typically carry 12 months. This is where large down payments hurt buyers who plan poorly. Put every spare dollar into the purchase and you may fall short on reserves. Reserves have to remain after the cash to close is paid.
If you are self-employed, documentation also drives eligibility. Bank-statement programs review your file on 12 or 24 months of deposits, after an expense ratio. The standard fixed ratios vary with how many employees the business has and whether it sells services or products, with a lower ratio for a service business with no employees and higher ratios as headcount grows or for any product business. An accountant-provided ratio or a profit-and-loss method can substitute. Transfers from your own business into a personal account count in full. That is why a founder or physician with heavy write-offs on the tax return can still show strong qualifying income. Lendmire’s piece Does Being Self-Employed Change Your Jumbo Down Payment by Lender? covers that path in more detail.
Two other income routes exist, both for primary and second homes. An asset allowance divides your liquid assets by 36, 60 or 84 months. An assets-only path needs liquidity equal to the loan plus costs, with no debt-to-income test. In those asset paths, retirement accounts count at 70% (80% at age 59½ and over). Business funds, gifts, cryptocurrency and unvested stock never count. Investment property skips these and qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
Where the General Rule Breaks
The ladder is a good guide. These edge cases are where buyers get surprised.
The band cliff. Because leverage is keyed to the loan, not the price, the same condo can size very differently if the loan crosses a band edge. Once a purchase loan passes $3,000,000, the grid steps down. Primary residence drops to 75%, a second home to 65% (with a 760+ credit tier) and an investment property to 60%. A buyer whose loan would sit just over that line often does better putting in more cash and staying in the lower band. Verify the exact band edges against the current guideline sheet before you shape an offer.
Overlays at the top. On a second home or investment property with a loan above $3,000,000, the file picks up extra requirements. That includes a 700 credit floor, a clean 0x30x24 housing history, 48 months of seasoning on any credit event, U.S. citizen or permanent-resident status and no rural property. Cash-out proceeds cannot satisfy reserves. On a primary residence those overlays begin above $3,500,000.
Short-term rental use. If you plan to run the unit as a short-term rental, lenders treat it as a separate scenario. 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.
Cash-out on a condo you already own. A refinance is not a purchase. Cash-out ceilings sit lower than purchase ceilings. On an investment property, a loan in the $2,500,000 to $3,000,000 band caps cash-out at 60%. Above a $3,000,000 loan it caps at 55%. On the portfolio program, proceeds are unlimited at or below 60% LTV. Above 60% they are capped at $1,500,000 in hand. For a related question, see Lendmire’s piece Does a Rental Lender Accept Cash-Out Refinance Funds as a Down Payment?. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Programs that don’t match. Leverage numbers you see on other pages may not match these. Market surveys report a wide spread of figures for jumbo and condo financing. Each lender draws its own line, and no law defines “super jumbo.” The wholesale network’s grid above is the working reference for these files.
What Happens If the Appraisal Comes In Low
Say you contract at $3M and the appraisal lands under that. The lender sizes the loan off the lower figure. If the appraised value drops, the dollars the lender will lend drop with it. You either renegotiate the price or cover the difference from your own cash.
This risk is real on luxury condos. Comparable sales are thin at high prices, so appraisers lean on a small set of recent deals. Keep a cash cushion beyond the down payment so a valuation gap does not break the deal. A larger down payment may also help in a different way. Lower leverage typically gives the file more room on rent coverage, because a smaller loan carries a smaller monthly obligation.
Why Lenders Size It This Way
Lenders explain it as loss severity. If a $3M condo goes to foreclosure, it is a thin-market, high-price asset that can take longer to sell and may sell at a discount. A lower LTV leaves more of a cushion before the lender takes a loss. That is why the ladder steps down as the loan grows and why condo project health matters.
There is also a structural reason. A DSCR loan is designed for non-owner-occupied investment properties. Because it is a business-purpose investor loan, it is reviewed differently from a standard owner-occupied mortgage. The CFPB’s Regulation Z business-purpose exemption is the reason. Credit extended primarily for a business purpose falls outside the consumer-mortgage rules. In practice, the leverage grid belongs to the lender’s investors, not to a statute.
How This Differs From Agency Lending
Agency-backed financing sits in a different world. The conforming baseline is $832,750 per Orrick’s summary of the FHFA limits. The ceiling for a one-unit property in the highest-cost areas is $1,249,125 per Calculated Risk’s quote of the FHFA release. A $2M-plus loan is far past either number, so it lives in portfolio and non-QM channels. Those channels set their own leverage, documentation and reserve rules, which is why the ladder above looks nothing like an agency loan.
Key Terms Defined
LTV (loan-to-value): The loan amount divided by the lower of price or appraised value.
Non-QM: A loan that does not follow the standard qualified-mortgage documentation rules, so the lender can qualify you on bank statements, assets or property income.
Super jumbo: A loan so large that each lender draws its own line for it, with no legal definition.
Warrantable condo: A condo project that meets standard lender rules on owner-occupancy, litigation, insurance and reserves.
Non-warrantable condo: A project that fails one or more of those tests, which usually lowers allowed leverage.
Condotel: A hotel-style condo with rental pools or hotel services, which carries a lower leverage ceiling.
Reserves: Liquid funds you hold after closing, counted in months of your housing obligation.
DSCR: Monthly rent divided by the full monthly obligation on an investment property.
What the Decision Looks Like in Practice
Picture a founder buying a $3M condo as a second home. Her traditional personal-income documentation shows modest income because of write-offs, but her business deposits are strong. She is reviewed on 12 months of statements after an expense ratio. At 80% on a purchase, through select wholesale programs, subject to full underwriting, her down payment is 20% of the price. Reserves then need 9 months on top. She plans her cash around all three pieces, not just the first.
Now picture an investor buying a similar condo as a rental. The ladder cell looks the same at this loan size, but the rent test is independent. If the unit’s rent does not cover the full monthly obligation, including dues, leverage may need to come down. That is where a larger down payment solves a coverage problem. Lendmire’s complete DSCR loans guide covers the rent-coverage test in full.
Here is a short checklist before you go to contract.
- Confirm the building is warrantable, non-warrantable or a condotel.
- Check the HOA’s rental policy and its dues.
- Ask which loan band your target loan sits in and how close it is to the edge.
- Confirm your credit tier against the 720+ cells.
- Total your down payment, closing costs and reserves together.
- Decide your income path: deposits, assets or property rent.
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.
Frequently Asked Questions
Is there a single non-QM down payment for a $3M condo?
No. It depends on occupancy, building type, loan size and credit. Through select wholesale programs, subject to full underwriting, a purchase typically sizes up to about 80% leverage on a $3M condo, or about 20% down. A condotel typically caps at 75%, or about 25% down.
Does a strong credit score or rent coverage override the condo cap?
No. Property type sets its own ceiling regardless of how strong the rest of the file looks. Strong credit or coverage can help you reach the ceiling, but not exceed it.
Is mortgage insurance part of the picture?
Leverage caps are the main risk tool on these programs. Whether any insurance layer applies depends on the specific program, so confirm it during file review.
What if the appraisal comes in under the contract price?
The loan is sized off the lower of price or appraised value. You cover the shortfall in cash or renegotiate. Keep a cash buffer beyond the stated down payment.
Which funds can I use for the down payment?
It depends on the program and the documentation path. On asset-based paths, retirement accounts count at 70% (80% at 59½ and over). Business funds, gifts, cryptocurrency and unvested stock do not count. Lenders also want proof of cash left over after the purchase for reserves.
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 mortgage broker, not a lender, and 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. Programs change, and every file is underwritten individually.
The smartest $3M condo purchases start with the building’s type and rental policy, not the price, because at this size a condotel ceiling sits five points below the other building types.
Lendmire’s self-employed mortgages page presents both super jumbo programs, bank statement and DSCR, side by side.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage brokerage specializing in DSCR investor loans, helping arrange financing across 41 markets, including Washington, D.C., through wholesale and investor-lending channels. The model centers on property-level rental income reviewed by the lender rather than W-2 documentation, subject to lender guidelines, suiting entity-owned and multi-property investors. Lendmire holds Scotsman Guide Top Mortgage Workplace recognition for 2025 and 2026.
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References
1. Enact: What makes a condominium non-warrantable
2. CFPB Regulation Z, §1026.3 (business-purpose exemption)
3. Orrick: FHFA conforming loan limit summary
4. Calculated Risk: FHFA baseline conforming limit
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 a Bank Statement Jumbo Loan Works in Aspen · How Much Down Payment Does an Interest-Only Super Jumbo Bank Statement Loan Need? · How an Asset Depletion Loan Works
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.