The Quick Read: Yes, in most cases, because a condo is an eligible property type on asset-based programs, but two things must be approved: your assets and the building itself, and a failed building review can lower your leverage or end the deal even when your balances are large.
- The asset qualifier path covers the whole loan with eligible assets and documents no employment or income.
- The asset depletion path divides usable assets by 60 months to create qualifying income for the debt-to-income test.
- The condo project gets its own review of budget, reserves, litigation, investor concentration and commercial space.
- A condo-hotel or mandatory rental pool is typically a hard stop, and a non-warrantable label usually changes terms rather than ending the file.
- Alabama state law does not change the program figures. It does shape the HOA documents the lender reads.
Lendmire is a mortgage broker that places these loans through select lenders in its wholesale network. Consumer mortgage lending is licensed in 16 states, and Alabama is one of them. Every file is underwritten individually, so nothing below is a commitment to lend.
How Does an Asset-Based Mortgage Work on a Condo?
An asset-based mortgage is reviewed around what you own rather than what you earn. Across Lendmire’s wholesale network, it comes in two versions, and a borrower is qualified on one path at a time. The condo does not change that choice. It adds a second review that runs next to it.
On the asset qualifier path, your eligible assets must equal or exceed the entire loan amount. No employment or income is documented. The assets themselves are fully documented, so this is not a no-documentation loan.
On the asset depletion path, usable assets are divided by 60 months. The result is a monthly qualifying income. That income must carry the full housing payment and your other debts through the debt-to-income test. On a condo, the housing payment includes HOA dues.
Here is the first sanctioned example, on the qualifier path. Say an $800,000 loan is supported by $330,000 in brokerage accounts at 100%, $300,000 in a 401(k) at 90% because the borrower is under 59½, and $200,000 in savings at 100%. The credited amounts are $330,000, $270,000 and $200,000. That totals $800,000 of usable assets, so the loan is reviewed on assets alone, subject to underwriting.
Here is the second, on the depletion path. Take $1,500,000 in securities at 80%, which counts $1,200,000, plus $300,000 in cash at 100%. That is $1,500,000 usable. Divided by 60 months, it gives $25,000 of monthly qualifying income. That income then has to carry the housing payment, including the condo’s dues, and every other debt.
These figures are illustrative. The lender’s own calculation governs.
Which Path Fits a Condo Buyer?
Choose the qualifier path if your eligible assets can cover the whole loan outright. It is the cleaner file, because no income test applies. It is limited to principal residences and second homes, with loans up to $4,000,000.
Choose the depletion path if your assets are large but would not cover the loan by themselves. Assets become income, and that income runs through the debt-to-income test. This is also the only path that reaches investment property. Loans run from $125,000 to $3,500,000.
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| How you qualify | Assets cover the whole loan | Assets ÷ 60 = monthly income |
| Occupancy | Primary home, second home | Primary, second home, investment |
| Purchase leverage | Up to 80% | Up to 80% (home); 65% (investment) |
| Refinance leverage | Up to 75% | Up to 80% rate-and-term (home); 60% cash-out |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
Two details deserve a closer look. On the qualifier path, the 80% figure applies to a purchase and the 75% figure to a refinance, both on a principal residence or second home. Whether cash-out proceeds are allowed on that path is set by the lender and is not published, so plan around the depletion path if cash-out matters to you.
On the depletion path, a principal residence or second home allows up to 80% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. Cash-out proceeds never count as qualifying assets. All of these figures are ceilings through select programs and subject to underwriting.
Which Assets Count Toward a Condo Loan?
Cash-like assets count in full. Market assets and retirement accounts count at reduced percentages, and the percentages differ by path.
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Brokerage accounts | 100% | Securities 80% |
| CDs | 100% | 100% |
| Money market and savings | 100% | Cash accounts 100% |
| 401(k) and IRA | 90% under 59½; 100% at 59½+ | 70% at any age |
| Private stock | Not published | 75% |
| Real-estate equity | Not published | 60% |
On the depletion path, several items are not eligible. These are custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options, non-vested restricted stock units and funds from non-regulated financial companies.
Cryptocurrency, precious metals, collectibles, pledged or borrowed funds, and business accounts beyond your ownership share are not published as eligible on either path. The documented route is to convert them to a seasoned cash balance in a regulated account. The lender then reviews the source of the funds.
You do not need to sell your portfolio to qualify, because the program counts balances rather than requiring liquidation. If you do sell assets to fund a down payment, tax treatment can depend on how the funds are used and how the property is held. Borrowers should keep clear records and speak with a qualified tax professional before relying on any deduction.
What Seasoning, Credit and Minimums Apply?
Seasoning is the time your money has sat in your accounts. The qualifier path wants 60 days of seasoning and two months of statements for each qualifying account. The depletion path wants statements at least 120 days old at application, plus the most recent statement within 45 days. Sale-of-business, inheritance and legal-settlement funds are excused from that seasoning.
On credit, the qualifier path publishes a 600 minimum score. The depletion path follows the lender’s score and loan-amount matrix. A first-time investor on the depletion path needs a 700. Housing history is 0x30x12, and one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. On the depletion path, a housing event needs four years of seasoning.
The depletion path also has asset minimums. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When assets are your only income source, they can never be below $250,000 liquid. Asset-derived income can also supplement documented income up to a 45% debt-to-income ratio, and in that case the minimum-assets rule is waived.
On reserves, the qualifier path requires none at or below 75% loan-to-value. Above that, the lender sets them. The depletion path has no published reserve months. All of this is through select programs and subject to underwriting. Because this is a consumer mortgage, standard consumer disclosures apply.
Why Does the Condo Building Get Its Own Review?
The lender reviews the project’s finances and structure, and a weak project can limit a strong borrower.
Investors who have worked through this on BiggerPockets describe the same pattern. The condo project has to be evaluated, not simply the individual unit. The lender’s questionnaire is how you learn warrantability, because HOAs often don’t know it themselves. Plan to send that questionnaire to the association early.
Here is what the review typically looks at, and what to ask the HOA.
| Project issue | Why it matters | Ask the HOA for |
|---|---|---|
| Budget and reserves | Thin reserves raise special-assessment risk | Current budget, reserve information |
| Delinquent dues | Unpaid dues strain building finances | Delinquency status |
| Litigation | Suit type and size can make it reviewable or a hard stop | Litigation disclosure |
| Investor concentration | Many rentals can weaken owner commitment | Owner-occupancy and rental mix |
| Single-entity ownership | One owner holding many units adds risk | Ownership breakdown |
| Commercial space | Heavy commercial use changes the building’s character | Use breakdown |
| Hotel-style operation | Rental pools and front desks are typically a hard stop | Rental program terms |
Warrantable or Non-Warrantable: Does It End the Loan?
Usually not. A non-warrantable label generally means a more conservative review, lower leverage or a smaller loan cap. It does not automatically mean ineligible.
“Warrantable” is an agency term. Enact, a private mortgage insurer, defines a non-warrantable condo as one that fails the eligibility requirements of the agencies that buy and securitize mortgages. Its listed triggers include high investor or single-entity ownership, excessive commercial space (generally over 35%) and pending litigation naming the HOA or developer.
Those are agency rules, not the rules for this program. Lenders in Lendmire’s network run their own project review. They tend to look at similar risks: association finances, litigation, insurance and investor concentration. A building that fails the agency checklist may still be reviewable, with adjusted leverage. A building with serious litigation, heavy investor concentration or weak reserves can still be declined.
A non-warrantable status can also be temporary. A condo can be reclassified after the association fixes the failing criteria. If you are under contract, ask whether the association is already working on the problem.
The hard stop is the condo-hotel or mandatory rental pool. Some lenders take these case by case, but most do not. If your Alabama building has a hotel-operated rental program, assume the pool of lenders is narrow.
What Is Different About an Alabama Condo?
The program figures do not change by state, so an Alabama borrower sees the same paths, percentages and seasoning. What changes is the building and the documents behind it.
Alabama condos sit under one of two laws. Condos created after January 1, 1991 fall under the Alabama Uniform Condominium Act. Older buildings fall under the earlier Condominium Ownership Act. This matters for one practical reason: the age of the building tells you which set of governing documents to expect.
The statute requires assessments to be set at least annually from an adopted budget. A statute summary on CommunityPay notes that Alabama sets no reserve funding minimum. So reserve strength varies from one building to the next. That is why the lender reads the budget and reserve information line by line, and why you should read it before you go under contract. This is document context, not a lending rule.
The Gulf Shores and Orange Beach market is where many Alabama buyers meet the rental-pool question. A beachfront building may run a hotel-style rental program, and that can change which lenders will look at it. An inland condo with a plain owner-and-tenant mix usually faces a simpler review.
If you plan to rent the unit, 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. A warrantable building does not mean short-term rentals are allowed.
What Does the Appraisal Look Like?
A condo unit is typically valued on the agency form built for condo units, the Individual Condominium Unit Appraisal Report, Form 1073. A two-to-four unit property uses the Small Residential Income Property form, Form 1025, according to the Fannie Mae Selling Guide. These are form names only. The agency’s underwriting rules do not govern this program.
Which Occupancy Fits a Condo: Home, Second Home or Investment?
Occupancy decides which path and which leverage you can use. For a principal residence or second home, either path is available. For a condo you plan to rent, only the depletion path applies, at a lower ceiling of 65% on a purchase or rate-and-term refinance and 60% on a cash-out.
For an investor, the choice often comes down to who is paying the bills. If your documented income is thin and your portfolio is large, the depletion path can work for a rental condo. If the rent is the real source of repayment, a DSCR loan may fit better. DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. They qualify primarily on property-level rental income covering the payment, subject to lender guidelines.
On a DSCR file, HOA dues sit in the monthly obligation next to principal, interest, taxes and insurance. They are never subtracted from rent, so higher dues lower the coverage ratio for the same rent. A high-dues condo can miss the coverage floor even with solid rent. Sub-1.00 programs are available through select lenders in the network, but leverage and terms adjust. For the full picture, see Lendmire’s complete DSCR loans guide.
If your income comes from deposits rather than a portfolio, a bank statement program may be the better tool. That program is for borrowers who document income with bank deposits.
How Do You Apply, and What Should You Gather?
Start with the building, not the loan. Request the HOA documents before you commit to a contract, because the building review can reshape the deal.
1. Identify the property type: standard condo, condo in a project with rental activity, or condo-hotel.
2. Pull the HOA budget, reserve information, insurance certificate, litigation disclosure, delinquency status and owner-occupancy mix.
3. Choose a path based on whether your assets cover the loan or must produce income.
4. Collect statements that meet the seasoning rules for that path.
5. Confirm credit and housing history against the program’s published standards.
6. Have the lender run the project review alongside your asset review.
If you are relocating to Alabama or have assets scattered across several accounts, consolidating them into a regulated account early can help the seasoning clock. Funds moved late can restart the review.
What Are the Tradeoffs?
The main benefit is access. You can finance a condo on assets even if your documented income is low, such as after a business sale, an inheritance or retirement. You can also keep a portfolio invested instead of selling it.
The costs are real. Leverage is capped, and depletion leverage drops sharply for cash-out. Retirement accounts and securities are discounted. The building review adds a second gate. A non-warrantable project can reduce leverage or the loan size.
This route is probably the wrong fit if your assets are modest, because the depletion minimums are high. It may also be wrong if you earn solid documented income, since a standard program may then carry fewer restrictions. And it is a poor fit if the building is a condo-hotel with a mandatory rental pool.
Key Terms Defined
Asset qualifier path: the version of the program where eligible assets cover the entire loan and no employment or income is documented.
Asset depletion path: the version where usable assets divided by 60 months become qualifying monthly income.
Warrantable condo: a condo project that meets the eligibility standards of the agencies that buy mortgages.
Non-warrantable condo: a project that fails one or more of those standards, such as heavy investor ownership or pending litigation.
Project review: the lender’s check of the building’s budget, reserves, litigation and ownership mix.
HOA questionnaire: the form the lender sends to the association to learn the building’s finances and status.
Frequently Asked Questions
Can a non-warrantable Alabama condo qualify for an asset-based mortgage?
Sometimes. A non-warrantable label usually leads to a more conservative review, with lower leverage or a smaller loan cap, rather than an automatic decline. Heavy litigation, strong investor concentration or weak reserves can still sink a building, and a condo-hotel with a mandatory rental pool is typically a hard stop. Qualification is subject to underwriting and the lender’s project review.
Do I have to sell my investments to use the depletion path?
No. The program counts your balances rather than requiring you to liquidate them. Securities count at 80%, retirement accounts at 70% and cash at 100%, and the total is divided by 60 months to create qualifying income. If you do sell assets, keep clear records of where the funds came from.
Can I use this loan for a rental condo on the Alabama coast?
Only on the asset depletion path, which allows investment property at up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out. The building must also pass the project review, and rental rules vary by HOA and locality. If the rent is the main source of repayment, a DSCR loan is usually the closer match.
Do HOA dues affect how much I can borrow?
Yes. On the depletion path, dues are part of the housing payment that your qualifying income must carry through the debt-to-income test. Higher dues mean less room for other debts. The same logic applies on a DSCR file, where dues sit in the monthly obligation and lower the coverage ratio.
What if my assets are in cryptocurrency or a business account?
Neither path publishes those as eligible at a percentage. The documented route is to convert them to a seasoned cash balance in a regulated account, with the lender reviewing the source. Business accounts count only for your ownership share.
Next Steps
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. You can reach the team at 828-256-2183.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending partners for borrowers whose tax returns understate their income, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. BiggerPockets forum thread on DSCR loans for a condo
2. Enact: What Makes a Condominium Non-Warrantable
3. Code of Alabama, Chapter 8A (Alabama Uniform Condominium Act)
4. CommunityPay: Ala. Code § 35-8A-315
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Get an Asset Depletion Mortgage After a Foreclosure or Short Sale? · Is an Asset-Based Mortgage Reported to Credit Bureaus Like Any Other Mortgage? · Does a Securities-Backed Line of Credit Hurt Your Asset-Based Mortgage Application?
Guides: Asset-Based Mortgage in Alabama
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.