The Quick Read: The cash you receive equals the new loan amount, which is appraised value times the loan-to-value (LTV) cap that applies to your occupancy, minus your existing payoff and closing costs. On a rental condo, that cap tops out around 75% LTV, and a non-warrantable project can push a given file lower, subject to lender guidelines.
- Cash out = (value × LTV cap) − payoff − closing costs and fees.
- The ceiling depends on occupancy. A primary residence cash-out runs up to 80% LTV with a fixed expense ratio, or 75% if the file uses an accountant-prepared ratio, which is the lower route. A second home and an investment property both top out at 75%.
- The cap applies to total debt against value, not to your equity. Your payoff counts against it first.
- Income comes from 12 months of bank statements, and the new, larger payment still has to fit that income.
- A low appraisal shrinks the check dollar for dollar at the cap. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Here is the plain version. A bank statement loan changes how your income is measured. It does not change the basic math of a cash-out. Value sets the ceiling, your payoff eats the first slice of it, and costs come off the top of whatever is left. The non-warrantable label then decides how much of that ceiling a lender will let you use.
What Is a Non-Warrantable Condo, and Why Does It Matter for Cash?
A non-warrantable condo is a unit in a project that fails one or more of the standards used for agency-backed loans. That usually means the loan has to be written outside agency financing, as a non-QM (non-qualified mortgage) loan that a portfolio or wholesale lender keeps to its own guidelines.
Fannie Mae’s Selling Guide lists the kinds of project traits that make a building ineligible for its purchase. Examples include hotel-style operation, critical repairs, pending safety litigation, and too much commercial space. This is only the reference definition. Bank statement loans are not agency products, so the lenders in Lendmire’s network apply their own overlays.
Common reasons a building lands in this category:
- A high share of investor-owned units.
- One person or entity owning a large block of units.
- Pending litigation involving the association.
- Commercial or mixed-use space above a lender’s limit.
- Condotel or short-term-rental operation.
- Thin association reserves or deferred repairs.
Why does this affect your check? The more risk a lender sees in the building, the more likely it is to trim leverage or tighten pricing. The cap is not set by the label alone. It comes from the program, your occupancy, and the building’s specific issue together.
How Is Cash-Out Calculated Step by Step?
The formula has four moves. Value comes first, then the cap, then the payoff, then costs.
1. Appraised value. The appraisal sets the number, and a condo unit gets an individual-unit appraisal. Your estimate of value is only a placeholder until it returns.
2. Apply the LTV cap. Multiply value by the cap that fits your occupancy and program.
3. Subtract your payoff. The new loan first pays off the existing mortgage and any liens.
4. Subtract costs. Closing costs, appraisal fees, and condo-specific items such as the project questionnaire and HOA certifications come out of proceeds.
What remains is cash to you.
A worked example with generic units
All numbers below are illustrative only, and they are not a quote.
Say a condo appraises at 400 units and the existing payoff is 200 units. Assume a 70% cap for the example. The new loan is 280 units. Gross cash is 80 units, before costs. Costs then reduce that figure.
Now run it on a 75% cap, which is the ceiling for investment-property cash-out. The new loan is 300 units, and gross cash is 100 units before costs. Same condo, same payoff, and a five-point cap difference moves gross cash by a quarter.
Now apply a low appraisal. Suppose the unit comes back at 380 units instead of 400. At a 70% cap, the new loan is 266 and gross cash is 66 before costs. A five percent drop in value cut gross cash by about 18 percent. This is why a thin-equity file is sensitive to the appraisal.
The takeaway: cash is a leveraged result of two inputs, so small changes in value move the check by a larger share.
Which Cap Applies to Your Occupancy?
The cap follows how you use the unit, and the same program can offer different ceilings by occupancy. Across select lenders in Lendmire’s network, these are the cash-out ceilings:
| Occupancy | Cash-out ceiling (typical) | Notes |
|---|---|---|
| Primary residence | Up to 80% LTV | Fixed expense ratio |
| Primary residence | Up to 75% LTV | Accountant-prepared ratio, the lower route |
| Second home | Up to 75% LTV | By loan size and credit |
| Investment property | Up to about 75% LTV | Rentals sit at the low end |
These are ceilings, not promises. A non-warrantable project, a weaker credit profile, or a larger loan size can all pull a file below them. Subject to lender guidelines, expect the top of the range only on stronger files.
One point trips people up. The higher figures you may see for primary residences, up to 90% LTV, apply to purchases and rate-and-term refinances. They are not cash-out ceilings. Do not run cash-out math on a purchase figure. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
A related alternative is asset depletion, where qualifying comes from liquid assets. On a primary residence it runs up to about 80% LTV. It is a different documentation path, so it only helps if you hold meaningful liquid assets.
Which Limit Binds First: Equity or Income?
Two limits can cap your check. The one that is tighter controls the loan.
The equity limit is the LTV cap itself. If your payoff is already close to the cap, little or nothing is left to take out. A condo bought with a small down payment a short while ago often runs into this first.
The income limit comes from your bank statements. The lender totals eligible deposits across 12 months, removes items that are not income, and averages the result. On business accounts, an expense factor is applied, so only a portion counts as qualifying income. Expense factors vary by lender, and nobody should promise a universal one. Lendmire’s piece How Lenders Underwrite a Bank Statement Cash-Out Refinance With a 50% Expense Ratio covers the mechanics in more depth.
Then the new payment is tested against that income. A cash-out raises the loan balance, so it raises the obligation. Bank statement documentation changes how income is measured. It does not remove the debt-to-income test.
How do you tell which limit binds? Check equity first. Multiply value by the cap, subtract your payoff, and see what is left. If that is a healthy number, income becomes the next test. If a lender’s income review supports only a smaller loan, that smaller loan sets your cash, whatever the cap would allow.
Two other ceilings can matter. Loan sizes in the program run from roughly $125,000 to $3,500,000, so a very small or very large balance may fall outside it. Reserves are commonly around six months of the housing payment, and you need those assets on hand in addition to the cash you receive.
How Does the Building Review Change the Number?
The building’s specific problem often matters more than the label. A lender looks at why the project is non-warrantable, then decides how much leverage to allow.
- High investor concentration is typically treated as a pricing and overlay question, and a lender may respond by trimming some leverage.
- Litigation is a bigger problem. Depending on the claim, a lender may decline outright or lower leverage meaningfully.
- Commercial space is checked against a limit. Agency guidelines set one, and non-QM programs often hold a tighter overlay of their own.
- Condotel and short-term-rental projects generally sit at the conservative end of what programs allow, since hotel-style operation is treated as a higher-risk trait.
- Single-entity ownership concentrates risk in one owner, and lenders price it that way.
This is also where a broker earns its keep. Wholesale lenders differ on which of these they accept and how hard they trim the cap. The best program for your situation depends on which trait your building has, and a broker that shops several lenders can match the file to one that treats it kindly.
What Gets Deducted Before the Wire?
Gross cash and net cash are not the same number. Plan for these deductions:
- Lender and origination charges.
- Appraisal fees.
- Title, escrow, and recording charges.
- Condo questionnaire and HOA certification fees.
- Prepaid items and escrow deposits, where applicable.
- Any liens or unpaid association dues that must clear at payoff.
Condo-specific items are the ones people forget. The association may charge for the questionnaire and certifications. An unpaid assessment can also surface at title and come out of proceeds.
Run your estimate on net, not gross. A gross figure that looks right on paper can lose a meaningful slice before it reaches your account.
Bank Statement vs. DSCR vs. Other Paths
Bank statement documentation is not always the best fit. The right path depends on your income pattern, the rent, and what you need from the cash.
| Path | Reviewed on | Good fit when |
|---|---|---|
| Bank statement cash-out | Deposits over 12 months | Self-employed, strong deposits |
| DSCR cash-out | Property rent vs. payment | Rent clearly covers the payment |
| Asset depletion | Liquid assets | Large liquid balances, lighter income |
| HELOC | Home equity, often agency-style | Existing first mortgage you want to keep |
A self-employed owner with strong deposits, but a rental that does not cover its own payment, may do better on bank statements. An investor whose rent clearly covers the full payment, or who wants a file built around the property rather than personal income review, may prefer a DSCR loan. DSCR files qualify primarily on property-level rental income covering the payment, subject to lender guidelines. Lendmire’s complete DSCR loans guide walks through how that route works.
On a non-warrantable condo, HOA dues also count in the DSCR math, since they are part of the monthly obligation. High dues can pull the coverage ratio down, and special assessments are a cash-flow risk worth pricing before you borrow.
Compare cash proceeds across the paths, not just the program name. Two documentation routes can leave you with different checks on the same condo.
Occupancy Changes the Paperwork
An owner-occupied file, meaning a primary residence or second home, is a consumer mortgage. Standard consumer-mortgage disclosures apply. A bank statement loan on a non-owner-occupied rental, including a short-term rental, is a business-purpose loan and follows a different disclosure path. Which one applies depends on how you use the unit, and the two should never be mixed up in your planning.
Bank statement loans are still underwritten for ability to repay. The CFPB’s ATR/QM compliance guide lists bank statements among acceptable third-party records for verifying income. In practice, that is why a lender strips transfers, refunds, and loan proceeds out of your deposits. Only deposits that look like real income count.
Consumer mortgage licensing for this lane covers 16 states, so availability depends on where the property sits. 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.
What a Strong File Looks Like
Preparation moves the result more than anything you can say to a lender. Gather these before applying:
- Twelve months of statements for the accounts that hold your income.
- Clean explanations for large one-time deposits and transfers.
- The condo’s budget, insurance certificate, and recent HOA minutes.
- A payoff statement for your current mortgage.
- Proof of reserves, commonly around six months of the housing payment.
- Your expectation of value, and a reasonable backup if the appraisal comes in low.
Then work backwards. If you want a target net amount, add your payoff and expected costs, then divide the total by the cap to find the value you need. If the appraisal looks unlikely to reach that value, the target is probably too ambitious for this loan.
Think about exit as well. A non-warrantable condo can be harder to sell, since buyers who need agency-eligible financing may not be able to purchase it. That makes a cash-out that leaves you at the cap more demanding to unwind, so leave breathing room if a sale is in your plans.
If you are self-employed and want to see how the numbers work, Lendmire can help you compare bank statement loan options based on your deposits, the property, credit profile, leverage, and your goals. Qualification is on documented income under the applicable program, subject to lender guidelines. This is not a commitment to lend. Reach the team at 828-256-2183 or request a quote.
Key Terms Defined
LTV (loan-to-value): The new loan amount divided by the appraised value, shown as a percentage.
Cash-out refinance: A new, larger mortgage that pays off the old one and gives you the difference in cash.
Non-warrantable condo: A unit in a project that fails one or more agency eligibility standards, so it needs non-agency financing.
Bank statement loan: A non-QM loan that is reviewed on documented income drawn from your deposit history.
Expense factor: The share of business deposits a lender treats as costs, leaving the remainder as qualifying income.
Reserves: Liquid assets you must hold after closing, commonly around six months of the housing payment.
Frequently Asked Questions
Can I use a bank statement cash-out on a non-warrantable condo?
Often, yes, subject to lender guidelines and the building’s specific issue. Select lenders in Lendmire’s network write non-warrantable condos, though leverage may be trimmed depending on the project trait and occupancy. Litigation and condotel operation draw the tightest review.
What is the maximum LTV on a cash-out for a rental condo?
Investment-property cash-out tops out around 75% LTV across select lenders in the network. A non-warrantable project can pull a particular file below that. Primary residence cash-out runs up to 80% LTV with a fixed expense ratio, and a second home up to 75% LTV. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Does the cash-out amount equal value minus what I owe?
No. The cap applies to your total new debt against value, not to your equity. At a 70% cap on a 400-unit condo, total debt can reach 280 units. Your payoff comes out of that first, and costs come out of what remains.
How many months of statements do I need?
Programs in the network commonly use 12 months of business or personal statements. Eligible deposits are totaled, non-income items are removed, and the result is averaged, with an expense factor applied to business accounts.
Is a DSCR loan better for a condo I rent out?
It depends on which side of your file is stronger. If the rent clearly covers the full payment, a DSCR loan may suit you. If your deposits are strong but the rent is thin against the payment, bank statements may leave you a bigger check.
A deeper walk-through of investment-property equity extraction lives in Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving self-employed and high-net-worth borrowers in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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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 B4-2.1-03: Ineligible Projects
2. CFPB Ability-to-Repay and Qualified Mortgage Rule Compliance Guide
This article is part of Lendmire’s bank statement loan program — full qualification details, guidelines, and scenarios live on the program page.
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.