The Quick Read: Cash-out on this kind of condo runs mainly through the asset depletion path, which turns your eligible assets into a monthly qualifying income. That path allows up to 60% loan-to-value on a cash-out refinance, subject to underwriting and the building review. The asset qualifier path covers the loan with assets alone, but its cash-out terms are set lender by lender.
- Two paths, one at a time. You qualify on the asset qualifier path or the asset depletion path, never a blend of both.
- Cash-out ceiling. On the depletion path, cash-out is capped at 60% loan-to-value on a principal residence, second home or investment property, through select programs.
- The building is the second test. A non-warrantable project can mean closer review and lower leverage, and your assets cannot fix it.
- Cash-out proceeds never count. The money you pull out cannot be used as a qualifying asset.
- Documents. Expect no traditional personal-income documentation, pay stubs or employment verification, but full asset statements and a condo project review.
This page is for borrowers whose balances are large and whose documented income is not. Think retirees, business sellers, inheritance recipients and households living on a portfolio.
What Makes a Condo Non-Warrantable?
A condo is non-warrantable when its project fails the standards that agency-backed loans require. The label follows the building, not the borrower. Your credit and your balances cannot change it.
The agencies set those standards for loans they buy. Asset-based loans placed through select lenders in Lendmire’s wholesale network are not agency loans. That is why a non-warrantable building is not an automatic decline, though it often means tighter terms.
Fannie Mae’s Selling Guide on ineligible projects shows the typical triggers. Commercial or mixed-use space above 35% of a project is one. Too many units held by a single owner is another. Hotel-style operation and certain mandatory memberships also appear on the list. Those are agency rules. They tell you what lenders look at, not what any one asset-based program requires.
Other common triggers are pending litigation, thin reserves, heavy dues delinquency and critical repairs. Developer control of the association is another.
One myth is out of date. Many pages still say a building with over 50% rentals is non-warrantable. Community Associations Institute reports that Fannie Mae eliminated that investor-concentration limit for conventional loans. Individual lenders may still apply their own concentration overlays. Ask early.
How Does Asset-Based Qualification Work?
Asset-based qualification replaces income documents with asset statements. You document balances, not paychecks. Every file is still fully underwritten, and you pick one of two paths.
The asset qualifier path requires your eligible assets, after credit percentages, to equal or exceed the entire loan amount. No employment or income is documented. The lender’s ability-to-repay review rests on the assets.
The asset depletion path divides your usable assets by 60 months. The result is a monthly qualifying income. That income must carry the housing payment and your other debts through a debt-to-income test.
| Feature | Asset Qualifier | Asset Depletion |
|---|---|---|
| What carries the loan | Assets cover the whole loan | Assets become monthly income |
| Occupancy | Principal residence, second home | Also investment property |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Credit | 600 minimum score | Lender’s matrix |
| Seasoning | 60 days; two months of statements | Statements 120 days old plus one within 45 days |
A reader with retirement balances and brokerage accounts usually fits one path better than the other. If your balances comfortably exceed the loan, the qualifier path is cleaner. If your balances are large but fall short of the loan amount, the depletion path is the realistic one.
What Are the Cash-Out Requirements by Path?
On the depletion path, cash-out is capped at 60% loan-to-value. That applies to a principal residence, a second home or an investment property. Rate-and-term refinances on a principal residence or second home go up to 80%. On an investment property, rate-and-term goes up to 65%.
On the qualifier path, the published refinance ceiling is 75% loan-to-value on a principal residence or second home. Whether cash-out proceeds are allowed there, and at what leverage, is set by the lender and is not published. Ask for it by name before you build a plan around it.
These are ceilings, not offers. A non-warrantable building often lands below them, depending on the specific project issue. Each file is subject to underwriting.
| Requirement | Qualifier Path | Depletion Path |
|---|---|---|
| Cash-out leverage | Set by the lender | 60% on all three occupancies |
| Minimum assets | Cover the whole loan | Lesser of $1,000,000 or 1.25x the loan |
| Floor | None beyond covering the loan | Never below $250,000 liquid as sole income source |
| Reserves | None at or below 75% LTV | No published months |
Credit matters on both paths. The qualifier path publishes a 600 minimum score. The depletion path follows the lender’s matrix. A first-time investor on the depletion path needs a 700 score. Housing history is 0x30x12, though one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. A housing event needs 4 years of seasoning on the depletion path.
Asset income can also supplement documented income on the depletion path, up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived.
Which Limit Actually Governs Your Cash-Out?
Your loan lands at the lowest of several ceilings, and the building often sets the lowest one. Walk through them in order.
1. Path leverage. On the depletion path, the cash-out ceiling is 60% of value.
2. Building overlay. A lender may cut leverage further when the project has an issue such as litigation or thin reserves.
3. Loan-size band. The loan must sit between $125,000 and $3,500,000 on the depletion path, or up to $4,000,000 on the qualifier path.
4. Asset coverage. On the qualifier path, usable assets must equal the loan. On the depletion path, derived income must clear the debt-to-income test.
Here is how the asset math works on each path. These are illustrative figures. The lender’s own calculation governs.
Qualifier example: An $800,000 loan with $330,000 in brokerage accounts (counted at 100%), $300,000 in a 401(k) under age 59½ (counted at 90%, or $270,000) and $200,000 in savings (counted at 100%) counts $800,000 of usable assets. That is reviewed on assets alone.
Depletion example: $1,500,000 in securities (counted at 80%, or $1,200,000) plus $300,000 in cash (counted at 100%) gives $1,500,000 of usable assets. Divided by 60 months, that is $25,000 of monthly qualifying income. That income then carries the housing payment and your other debts through the debt-to-income test.
Notice what is missing. The cash you pull out is not in either calculation. Cash-out proceeds never count as qualifying assets. Plan the file as if that money does not exist.
The second piece of the picture is the building. A condo with a clean project review can come in near the path ceiling. A condo with a pending special assessment often cannot, because the assessment raises the monthly obligation your income must carry. For larger balances, see how a super jumbo cash-out sizes up on a non-warrantable condo.
What Assets Count, and What Doesn’t?
Cash, CDs and public securities count, at different percentages by path. Privately held company stock does not count on either path. Cryptocurrency, precious metals and collectibles are not published as eligible either.
| Asset | Qualifier Path | Depletion Path |
|---|---|---|
| Brokerage accounts | 100% | Securities at 80% |
| Certificates of deposit | 100% | 100% |
| Money market, savings | 100% | Cash accounts at 100% |
| Retirement (401(k), IRA) | 90% under 59½; 100% at 59½+ | 70% at any age |
| Real-estate equity | Not listed | 60% |
Accounts combine on the qualifier path. Several balances can add up to cover the loan.
Some assets are not eligible on the depletion path. These include 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. Pledged or borrowed funds are out, as are business accounts beyond your ownership share.
The documented route for anything not eligible is conversion. Sell it, move the proceeds into a regulated account and let the balance season. The lender reviews the source. Sale-of-business, inheritance and legal-settlement funds are excused from the depletion path’s seasoning requirement.
Which Condo Documents Will the Lender Review?
Expect a project review before the lender weighs your unit. The lender sends a condo questionnaire to the association or management company. The questionnaire reports ownership concentration, dues arrears, litigation, reserves, insurance and commercial space. A New York real estate law firm’s explainer on non-warrantable condos describes the same contents.
Your side of the checklist is shorter:
- Statements for every qualifying account, covering the seasoning window for your path.
- Identification and the usual credit documents.
- Current dues and any pending or approved special assessments.
- The existing mortgage payoff information.
- The appraisal, which the lender orders.
The loan is reviewed on verified assets rather than income documentation, subject to lender guidelines. Those assets are documented with statements, and every file is fully underwritten.
How the Process Runs (and What Happens If the Building Changes)
The order matters more than the calendar. Skip around and you pay for appraisals you cannot use.
1. Screen the building first. Ask the management company about litigation, arrears, assessments and commercial space before anything else.
2. Pick your path. Compare your balances to the loan you want. Decide which path fits.
3. Season your assets. Make sure statements meet the window. Move money into regulated accounts if needed.
4. Submit the file. The lender reviews credit, assets and the condo project.
5. Appraisal and project review. The value and the building review set the leverage ceiling.
6. Final underwriting and payoff. The existing lien is paid off and the cash-out is calculated.
Status can change mid-file. Litigation that resolves or arrears that drop can make a building acceptable. A new lawsuit or a fresh assessment can flip it the other way. If that happens, the lender re-reviews the project. Leverage may adjust. Build a cushion into the amount you ask for.
Asset-Based, DSCR or Bank Statement: Which Fits?
The right program depends on how you hold wealth and what the property does. These programs have different rules from each other, so compare them by borrower profile.
| Your Profile | Likely Fit |
|---|---|
| Big balances, little documented income | Asset-based mortgage |
| Rental income covers the payment | DSCR loan (business-purpose rental financing) |
| Income shows in business deposits | Bank statement program |
The bank statement program is for borrowers who document income with deposits. Business-purpose rental financing is DSCR. Those are separate programs with their own rules. Neither replaces the asset-based path for a borrower living on a portfolio.
If you are weighing a conventional route instead, a conventional lender usually cannot sell a loan on a non-warrantable condo to the agencies. A lender willing to hold it on its own books is the traditional route.
Lendmire’s asset-based mortgage programs cover the specifics for the two paths. Lendmire is a broker. It arranges these loans through select lenders in its network. It does not lend.
Mistakes That Sink These Files
- Counting cash-out proceeds as assets. They never count.
- Using unseasoned cash. Deposits inside the window need a documented source, except the excused sources above.
- Assuming every account type counts. Crypto, collectibles and custodial accounts do not.
- Blending the paths. One path per file. Each has its own percentages.
- Choosing a lender before checking the building. A project issue can lower leverage after you have paid for an appraisal.
- Ignoring dues growth. Dues and assessments feed directly into the monthly obligation on the depletion path. Model dues rising faster than your plan assumes.
- Overlooking exit risk. Non-warrantable condos can be harder to sell, because buyers have fewer financing options. Cash you pull out today must be repaid from a refinance or a sale into that thinner buyer pool.
Tax treatment varies; consult a qualified professional.
Cash Out Now or Wait for the Building to Cure?
Wait when the problem is temporary and the amount you need is not urgent. Litigation that is close to settling or arrears that are falling can change the project review. A cleaner building usually means better leverage terms later.
Cash out now when you have a defined use for the funds and your balances are already seasoned. Also act if the building’s problem is structural, such as a hotel-style operation that will not change. Waiting will not fix that.
One more fork matters. If the building proves acceptable after review, quote it that way. If it does not, the lower leverage is the price of the label. Model both before committing.
Key Terms Defined
Non-warrantable condo: A condo in a project that fails the standards agency-backed loans require.
Asset qualifier path: A way to qualify when eligible assets equal or exceed the whole loan amount.
Asset depletion path: A way to qualify by dividing usable assets by 60 months to create monthly income.
Haircut: The share of an asset’s balance that a lender will not count.
Seasoning: How long funds must sit in your account before they count.
Cash-out refinance: A new loan that pays off the old one and gives you the difference in cash.
Condo questionnaire: A form the association completes, reporting finances, litigation and ownership mix.
Frequently Asked Questions
Can I refinance a non-warrantable condo with cash-out on assets alone?
Yes, through select programs. The depletion path publishes 60% loan-to-value for a cash-out refinance, subject to underwriting. The qualifier path’s cash-out terms are set by the lender and are not published. The building review can lower leverage on either path.
Does the non-warrantable label disqualify me?
No. The label describes the building, and asset-based loans are not agency loans. It can mean closer project review and lower leverage. Your credit and balances do not change the label, but they still carry the file.
Can cash-out proceeds count as my qualifying assets?
No. Cash-out proceeds never count as qualifying assets on the depletion path. Build your asset total from balances you already hold, seasoned to the path’s requirements.
Does privately held company stock count as an asset?
No. Privately held company stock is not an eligible asset on either path. If you are a founder or shareholder, the route is documented liquid assets. That means seasoned proceeds from a sale or buyout, cash, public securities and retirement accounts at their percentages.
Can I cash out a condo I own free and clear?
Yes, subject to underwriting. There is no payoff to cover, so the file centers on the building review, the appraisal and your assets. The same path ceilings apply, and seasoning rules for cash-out vary by lender.
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. Consumer mortgage lending is available in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. Program terms change, and nothing here is a commitment to lend.
A condo’s building review, not your balance sheet, is often the part that sets the final leverage.
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 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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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. Community Associations Institute, Fannie Mae and Freddie Mac update
3. Nacmias Law, What Is a Non-Warrantable Condo
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 a Texas Asset-Based Mortgage With No Job? · Asset Seasoning Rules for a Colorado Asset-Based Mortgage · Can You Get an Asset-Based Mortgage on a Pennsylvania Condo?
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
Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.