The Quick Read: Yes, usually, if two things line up: your assets and the building. An asset-based mortgage is reviewed against savings and investments instead of paycheck income, and a condo adds a second review of the association, its finances and its legal history. Passing the first test does not fix a failing second one, subject to underwriting.
- Two paths exist. Assets can cover the whole loan outright (the asset qualifier path), or they can be converted into monthly qualifying income (the asset depletion path).
- The building gets its own review. Litigation, reserves, insurance and rental mix can sink a loan even when your balances are huge.
- Occupancy decides the path. A principal residence or second home can use either path. An investment condo is limited to the depletion path, at lower leverage.
- Colorado has no special lending rule. The program figures are the same in every state. Colorado matters because of its condo-defect litigation history.
- A pure rental often fits a DSCR loan better. That product is reviewed on the property’s rent instead of your assets.
What Is an Asset-Based Mortgage, and Is It the Same as Asset Depletion?
An asset-based mortgage is a home loan underwritten on what you own rather than what you earn. Lenders and websites use several names for it: asset depletion, asset utilization, asset qualifier. Across the wholesale network Lendmire works with, these are really two distinct methods under one umbrella, and a borrower is qualified on one method at a time.
It is not an “asset-based loan” for a business. Those are credit lines secured by inventory or receivables. This is a consumer mortgage on a home.
The reader this fits is cash-heavy and income-light. Think retirees, people who sold a business, someone who received an inheritance or settlement, an early-retired professional, or a household living off a portfolio. Balances are large. Documented income is not.
One clarification matters. “No income documentation” never means “no documentation.” Your accounts are documented in detail, and the lender still reviews credit, the appraisal and title.
How Does Qualifying on Assets Actually Work?
Under the asset qualifier path, your eligible assets, after the credit percentages below, must equal or exceed the entire loan amount. No employment or income is documented. Under the asset depletion path, your eligible assets are discounted, divided by 60 months, and treated as monthly income. That income then runs through the debt-to-income test with your housing payment and other debts.
The illustrations below are simplified. The lender’s own calculation governs.
Qualifier path example. Take an $800,000 loan. You hold $330,000 in brokerage accounts (100% counts), $300,000 in a 401(k) while under age 59½ (90% counts, or $270,000), and $200,000 in savings (100% counts). That is $800,000 of usable assets. The loan is reviewed on assets alone, subject to underwriting.
Depletion path example. You hold $1,500,000 in securities, which count at 80% for $1,200,000. You also hold $300,000 in cash, which counts at 100%. Usable assets come to $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income. That income must carry the housing payment, which includes the condo’s association dues, plus your other debts.
Which path fits you? If your balances are large relative to the loan and you want the simplest file, the qualifier path is the first look. If your assets are strong but spread across account types that count at a discount, or you want a different mix of occupancy and leverage, the depletion path often fits better.
Which Assets Count, and How Much?
Treatment differs by path, so these are two separate tables. Never read across them.
Asset qualifier path (share of balance that counts)
| Asset | Credit |
|---|---|
| Brokerage accounts | 100% |
| Certificates of deposit | 100% |
| Money market and savings | 100% |
| 401(k) and IRA, under age 59½ | 90% |
| 401(k) and IRA, 59½ or older | 100% |
Accounts combine. Each qualifying account needs 60 days of seasoning and two months of statements.
Asset depletion path (share of balance that counts)
| Asset | Credit |
|---|---|
| Cash accounts and CDs | 100% |
| Securities | 80% |
| Private stock | 75% |
| Retirement accounts, any age | 70% |
| Real-estate equity | 60% |
On this path, statements must be at least 120 days old at application, plus a recent statement within 45 days. Funds from the sale of a business, an inheritance or a legal settlement are excused from that seasoning.
Several assets do not count on the depletion path. These include custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options and unvested restricted stock units. Cryptocurrency, precious metals, collectibles and borrowed or pledged funds are not published as eligible on either path. The documented route is to convert them into a seasoned cash balance in a regulated account, with the lender reviewing the source.
Why Does a Condo Add a Second Layer of Review?
With a house, the lender evaluates you and the property. With a condo, it also evaluates the building. You own your unit, but your collateral’s value and marketability depend on the association’s finances, insurance and legal standing.
This is why you hear the terms warrantable and non-warrantable. A warrantable condo meets the building standards set by the big agency-backed mortgage programs. A non-warrantable one does not. The usual causes are pending litigation, thin reserves, too many investor-owned units, commercial space in the building, and heavy dependence on one owner or entity.
Non-warrantable does not mean unfinanceable. It means the loan sits outside the agency lanes. Non-agency lenders run their own project review, and they differ from one another. Across Lendmire’s wholesale network, some programs may accept a non-warrantable building at reduced leverage, while others may decline it entirely.
The condo review typically looks at litigation, reserve adequacy and the split between owner-occupied and rented units, as Scotsman Guide describes. That is a building-level test. A borrower with a perfect balance sheet cannot cure a building with active litigation and empty reserves.
What Colorado Condo Red Flags Should You Check First?
Colorado condos deserve extra diligence for one historic reason: construction-defect litigation. Older buildings and mountain or resort buildings often carry several flags at once. The state has recently acted on this. Colorado’s HB25-1272, the Colorado American Dream Act, was signed into law to reduce defect-litigation risk as a barrier to entry-level condos and townhomes.
A Colorado law-firm summary reports that an association now needs approval from owners holding at least 65% of voting interests to file a defect claim, with limited exceptions. That may reduce new suits over time. Treat it as a future-looking help, not a present fix.
| Issue | Why lenders care | What to ask the association |
|---|---|---|
| Pending defect or other litigation | Threatens finances and value | Is any suit pending or threatened? |
| Thin reserves | Raises special-assessment risk | What is the reserve balance and funding plan? |
| High investor concentration | Weakens owner-occupant base | What share of units are rented? |
| Master insurance gaps | Affects collateral protection | Is coverage current and adequate? |
| Rental or short-term rental limits | Changes how you may use the unit | Do the declarations limit leasing? |
| Special assessments | Adds cost and flags problems | Any levied or planned assessments? |
Ask for the condo questionnaire, budget, financials, master insurance certificate and governing documents before you write an offer. Do it early. A bad answer after you are under contract costs far more than the same answer before.
Does Your Plan for the Condo Change the Path?
Yes. Occupancy sets which path and which leverage apply, and these figures are ceilings, not offers.
Principal residence or second home, qualifier path: up to 80% loan-to-value on a purchase and 75% on a refinance. Loans reach $4,000,000.
Principal residence or second home, depletion path: up to 80% on a purchase or rate-and-term refinance, and 60% on a cash-out refinance. Loans run from $125,000 to $3,500,000.
Investment property, depletion path only: Investment property is not available on the qualifier path.
If the condo is a second home, you must actually use it as one. A mountain unit you plan to rent out most of the year is a different animal. 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. Many associations restrict or ban nightly rentals entirely, and that restriction can also change how a lender classifies the unit.
When Does a DSCR Loan Fit Better Than an Asset-Based Mortgage?
If the condo is a pure rental, you may be better off with a DSCR loan. It is a business-purpose product built for non-owner-occupied investment property. It qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Your personal income is not the focus, though credit, down payment and reserves still count. Association dues sit inside the payment, so a high-dues building can pull coverage down even with solid rent.
Some select lenders in the network will review coverage below 1.00, though leverage and terms adjust to compensate. For the basics, see Lendmire’s complete DSCR loans guide.
| If you… | Likely fit |
|---|---|
| Have large assets, little income, and will live in the condo | Asset qualifier or depletion path |
| Want a second-home condo and have strong balances | Either asset path |
| Will rent the unit full time and want it judged on rent | DSCR loan |
| Document income through deposits | Bank statement program |
| Hold an investment condo and want your assets counted | Depletion path, lower leverage |
The bank statement program is for borrowers who document income with deposits. A DSCR loan also avoids the limits some other programs place on how many financed properties an investor can hold.
What Do You Need to Gather?
Group your documents into three piles.
- Borrower: photo ID, credit authorization, and housing history. The lender looks for 0x30x12, meaning no 30-day lates in the last twelve months. One late is considered case by case.
- Assets: statements for each qualifying account, held to the seasoning rules for your path. Explain any large deposits.
- Condo project: the purchase contract, appraisal, title, the association questionnaire, budget, financials, master insurance certificate and governing documents.
Credit floors differ by path. The qualifier path’s published floor is a 600 score. The depletion path follows the lender’s score and loan-amount matrix. A first-time investor on the depletion path needs a 700. Multiple bankruptcies are not eligible, and a housing event needs four years of seasoning on the depletion path. Subject to underwriting.
The depletion path also has asset minimums: at least the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 liquid when depletion is your only income source. If asset-derived income only supplements documented income, up to a 45% debt-to-income ratio, that minimum is waived.
On the qualifier path, no reserves are required at or below 75% loan-to-value. Above that, the lender sets them.
Who Should Skip This Route?
Skip it if your balances are modest relative to the loan. The math is unforgiving, and the depletion path’s asset floors will stop many files. Skip it if the building has active litigation and no sign of resolution. Skip it if your money is in cryptocurrency or other assets the program does not count, and you cannot convert them to a seasoned cash balance. And skip it if the condo is a pure rental, since a DSCR loan will likely handle that better.
Common reasons a file stalls include recent large unexplained deposits, a building whose project review fails, a score below the path’s floor, and retirement balances counted at the wrong percentage.
Key Terms Defined
Asset qualifier path: the method where your eligible assets must cover the whole loan amount and no income is documented.
Asset depletion path: the method where eligible assets, after discounts, are divided by 60 months into qualifying income.
Seasoning: how long funds must sit in an account before they count.
Warrantable condo: a building that meets the standards of the big agency-backed mortgage programs.
Non-warrantable condo: a building that falls outside those standards, so it needs a non-agency lender.
DSCR: debt service coverage ratio, the property’s rent divided by its full monthly housing obligation.
Frequently Asked Questions
Can I use retirement accounts?
Yes. On the qualifier path, 401(k) and IRA balances count at 90% under age 59½ and 100% at 59½ or older. On the depletion path, retirement accounts count at 70% at any age. Subject to underwriting.
Do I need traditional personal-income documentation or pay stubs?
Not for the qualifier path, which documents no employment or income. Your assets are fully documented, though, and the lender still reviews credit, the appraisal and title. On the depletion path, derived income runs through the debt-to-income test.
Can I buy a non-warrantable condo this way?
Sometimes. The building gets its own review, and outcomes vary by lender. Expect possible leverage adjustments, and know that active litigation is a common sticking point.
Can I rent the condo short-term?
Check the association’s declarations first, because many restrict or ban it. A unit rented most of the year may not qualify as a second home. If rental is the plan, a DSCR loan may be the cleaner fit.
Does Colorado’s new condo-defect law make financing easier?
Not directly. The law targets future construction and the process for defect claims. It does not remove existing litigation from any building, and it does not change a lender’s project review today.
Next Step
If you are qualifying on assets rather than income and want to see how the numbers work, Lendmire can help you compare asset-based mortgage options based on your statements, the property, credit profile, leverage, and your goals. Lendmire is a mortgage broker, not a lender, and consumer lending through the network is available in Colorado, subject to lender guidelines and not a commitment to lend. Tax treatment varies, so consult a qualified professional.
Lendmire’s asset-based mortgage in Colorado page presents the program for Colorado borrowers.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Scotsman Guide, “Get in the Game”
2. Colorado General Assembly, HB25-1272
3. Wheeler Trigg / WSHB, Colorado homebuilders and the new law
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How a Margin Balance Is Treated on an Asset Depletion Mortgage · Savings Account vs Brokerage Account: Which Counts More on an Asset-Based Mortgage? · What Counts as an Asset Statement for a Mortgage?
Guides: Asset-Based Mortgage in Colorado
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.