The Quick Read: On a $3M non-warrantable condo, the cash you bring is set by the tightest of three limits: the 75% purchase leverage ceiling, the $1,500,000 loan cap on non-warrantable buildings, and the credit tier for the loan size, so the down payment usually lands near half the price instead of a quarter, subject to underwriting.
- A non-warrantable condo is typically capped at 75% leverage and a $1,500,000 loan across the select programs in Lendmire’s wholesale network.
- 75% of a $3M price lands above that loan cap, so the cap binds first and the down payment rises to meet it.
- A warrantable building at the same price can reach 75% leverage on a purchase, which is why building type matters more than your coverage ratio here.
- Reserves of 6 months of the full monthly obligation sit on top of the down payment, and 12 months apply to first-time investors.
- Every figure is a ceiling that depends on credit, coverage, the building, and the appraisal. None of it is a commitment to lend.
Why Does the Building Set the Down Payment?
The building decides the down payment because a non-warrantable condo carries its own loan cap, and that cap sits below what a $3M price would otherwise call for. The coverage ratio and credit score matter, but they cannot lift a loan past the building’s ceiling.
DSCR Calculator
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Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 15, 2026
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Program parameters update from Lendmire’s centralized guideline source. Taxes and insurance are editable estimates.
As of Oct 15, 2026 · General Freddie Mac market benchmark, not a Lendmire loan offer. Rent, nightly rate, occupancy, taxes, and insurance are editable estimates. Short-term rental figures are estimates only and vary significantly by season, property type, management approach, and local short-term-rental rules — confirm local regulations before relying on them. Qualifying income for short-term rentals varies by program — some use appraisal market rent, others use documented STR history or projections — and is confirmed in underwriting. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
Think of it as three gates, and the loan passes through the narrowest one.
| Limit | What it caps | Who decides |
|---|---|---|
| Property type | 75% leverage and a $1,500,000 loan on non-warrantable condos | The lender’s program |
| Loan-size band | Purchase leverage by size, with credit tied to each band | The program ladder |
| Building review | Whether the project is acceptable at all | Underwriting, using HOA documents |
A flat 25% down is a fair rule of thumb for smaller condo loans. It breaks at this price. Seventy-five percent of a $3M purchase is a loan well above $1,500,000. To bring the loan under the cap, the buyer needs leverage near 50%, which means roughly half the price in cash. That is arithmetic from the cap, not a published rule, so treat it as the planning number and not the promise. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Anything above the cap is a case-by-case conversation. Some lenders in the network will look at larger non-warrantable loans on strong files. It is not a published tier, and it should not be your base case.
Key Terms Defined
Super jumbo: a loan large enough to fall outside standard program sizes. Lendmire’s standard DSCR program stops at $3,000,000, and the super jumbo ladder carries qualified investors past it, up to $10,000,000.
Warrantable condo: a building that meets the standards of the big mortgage agencies on things like owner-occupancy mix, litigation, and finances.
Non-warrantable condo: a building that fails one or more of those tests. It is a financing label, not a defect in the property.
Non-QM: a loan outside the conventional agency box. Scotsman Guide describes non-QM as loans outside the parameters of conventional or government-backed lending.
DSCR (debt service coverage ratio): monthly rent divided by the full monthly obligation. A result of 1.00 means rent covers the payment exactly.
PITIA: principal, interest, taxes, insurance, and association dues. It is the full monthly obligation the rent has to cover.
LTV (loan-to-value): the loan as a percentage of the price or appraised value. Down payment is the mirror image: 75% LTV means 25% down. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Reserves: liquid cash left after closing, counted in months of PITIA.
Condotel: a condo building run partly like a hotel, with nightly rentals and a front desk.
How Does Underwriting Treat This File, Step by Step?
Underwriting works through the building first, then the coverage, then the loan size, then the cash. Here is the order a typical file follows across the programs we place with.
1. The building is classified. Ask the HOA or management company early whether the project is warrantable, non-warrantable, or a condotel. The answer changes the leverage and loan cap before you ever talk about price.
2. The building is documented. Lenders want the HOA questionnaire, budget, reserve funding, litigation status, investor concentration, and any commercial space. A rental ban in the HOA documents is a hard stop. Heavy litigation or thin reserves tend to push a building into the non-warrantable column, and a few can end the deal.
3. Coverage is tested on the full payment. The lender divides monthly rent by PITIA, and HOA dues are part of it. On a luxury condo, dues can be a large share of the monthly obligation. Scotsman Guide describes DSCR as net operating income divided by total debt service, and notes that interest-only payments should be reflected when elected. Across the network, a ratio of 1.00 or higher earns full leverage. Ratios from 0.75 to 0.99 are a real path through select programs to $2,000,000, with LTV and terms adjusting, subject to underwriting.
4. The loan is sized. The lender takes the lowest of three numbers: the property-type cap, the loan-size band’s leverage, and the leverage your credit score supports in that band. Credit is tied to leverage, not to a single floor. The program floor is 660, and a lower score takes a lower leverage cell inside the same band.
5. Appraisal and rent are confirmed. Two appraisals apply once a loan passes $2,000,000. Leverage generally applies to the lower of price and appraised value, so a low appraisal raises your cash requirement.
6. Reserves are verified. Six months of PITIA on the subject property is typical, and 12 months for first-time investors. Interest-only loans are reserved on interest, taxes, insurance, and dues instead.
Qualification is primarily on property-level rental income covering the payment, subject to lender guidelines. Credit, reserves, and the building still get a full review. Because DSCR loans are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. Credit extended primarily for business purposes sits outside the consumer-credit rules in Regulation Z. A plan to live in the unit yourself ends the file.
For the wider mechanics, Lendmire’s complete DSCR loans guide walks through coverage, leverage, and documentation.
The $3M Worked Example: Warrantable vs. Non-Warrantable
Run the numbers on a $3M purchase of a one-unit investment condo, with the same borrower, credit, and rent in both cases. Only the building type changes. All figures below are modeled assumptions, not market data, and every cell is a ceiling subject to underwriting.
| Item | Warrantable building | Non-warrantable building |
|---|---|---|
| Purchase price | $3M | $3M |
| Leverage on a purchase | Up to 75% | Capped by the $1,500,000 loan limit |
| Effective LTV on the purchase | 75% | About 50% |
| Down payment | About 25% | About 50% |
| Credit for this leverage | 720+ | Fits within the $1M–$1.5M band, where 700+ supports 75% |
| Appraisals | Two (loan above $2,000,000) | Typically one at that loan size |
| Reserves | 6 months of PITIA | 6 months of PITIA |
The gap is about 25 percentage points of the price. On a $3M condo, that is a very large difference in cash, and the calculator on this site can convert the percentages into dollars for your own price.
Notice what does not drive the gap: your coverage ratio and your credit score. A 780 score and a 1.3x ratio still meet the same $1,500,000 cap on a non-warrantable building. The ratio works in your favor in a different way. A smaller loan means a smaller monthly obligation, so coverage improves.
Say the file sits near 1.0x at 75% leverage. Assume taxes, insurance, and dues stay fixed and the loan portion is about 70% of the monthly obligation. At 50% leverage, the same rent might cover the payment closer to 1.3x. That is a modeled illustration. Your own number depends on dues, taxes, and the loan terms. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
The stressed version of this file has a low appraisal or higher dues. A value below the price shrinks the loan on the percentage, so you cover the gap in cash. Higher dues lower coverage. Both push the file toward a bigger down payment, not a smaller one.
Where Does the General Rule Break?
The 50% planning number holds for a standard non-warrantable condo with a clean review. Several situations change it.
Condotels and short-term-rental-heavy buildings. Condotels are treated more tightly than ordinary non-warrantable condos. Across the network, a condotel tops out at 75% on a purchase and 65% on a refinance, with a $1,500,000 loan cap and $250,000 in cash-in-hand. Short-term-rental files stop at $2,000,000 and need coverage of 1.00 or higher. Income counts at 80% of gross, using the appraisal’s short-term-rent analysis on a purchase. Only experienced investors qualify, meaning twelve months owning income property in the last thirty-six. 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.
Coverage below 1.00. Select lenders in the network have programs below 1.00, but LTV and terms adjust. The practical levers are a smaller loan, more cash down, or interest-only. Interest-only runs a 120-month period on 30- and 40-year terms, tops out at 75%, needs coverage of 0.75 or better, and is qualified on interest, taxes, insurance, and dues. A handful of lenders in the network also offer no-ratio files through select wholesale programs, with limits on LTV, credit, and reserves, and every one is subject to underwriting. They stop at $2,000,000, so they do not reach a $3M purchase on their own.
Refinance and cash-out. The cash-out rules change with loan size. On a standard rental, cash-out on loans between $2,000,000 and $3,000,000 tops out at 60%, and none is available above $3,000,000. Non-warrantable collateral still carries the $1,500,000 cap. Lendmire’s piece on how much a super jumbo cash-out releases on a non-warrantable condo covers that side in detail.
Entity vesting. LLC vesting is generally welcome, subject to program terms, with no layered entities. Expect closer title and legal review at this size.
Loans above $3,000,000. This file does not cross that line, but a bigger condo would. Above $3,000,000, the super jumbo overlay asks for 700 credit, a clean 0x30x24 housing history, 48-month event seasoning, no rural property, and citizenship or permanent residency. Cash-out proceeds cannot satisfy reserves.
An agency contrast. For a sense of what a warrantable review looks at, Fannie Mae’s project review process tests delinquency, with no more than 15% of units 60 or more days past due. DSCR lenders in the network do not apply that selling guide. They set their own building overlays, which vary from lender to lender. A building that fails the agency box may still work on a DSCR file, with leverage and loan size capped.
DSCR vs. conventional financing
There are two common ways to finance an investment property, and they qualify you differently — here’s how investors weigh them.
Why investors choose it
- Qualifies on the property’s rental income — no personal tax returns, W-2s, or pay stubs needed to document income.
- No personal debt-to-income ceiling to clear, so existing mortgages and obligations don’t cap your borrowing the same way.
- Can be closed in an LLC, keeping the property inside a business entity.
- Built for scaling — not held to the limit on number of financed properties that conventional financing applies.
- Underwriting centers on the deal: generally qualifies when the rent covers the payment, a 1.00x coverage ratio being a common baseline (confirmed in underwriting).
- Designed specifically for investment property, including long-term and, where the program allows, short-term rentals.
Where it’s strong
- Often the lowest ongoing financing cost for a buyer who fully qualifies on personal income — a fit for a first property or a cost-first purchase.
Trade-offs for investors
- Requires full personal income documentation and must fit within a debt-to-income limit — salary, existing debts, and other mortgages all count.
- Typically held in your personal name rather than a business entity.
- Caps how many financed properties you can carry, which can become a ceiling as a portfolio grows.
- Evaluates you as a borrower as much as the property, which usually means more paperwork.
How investors usually choose: a first or single property often optimizes for the lowest financing cost; portfolio builders often optimize for leverage, vesting in an LLC, and scaling past conventional caps. The right answer depends on your goals, the property, and current guidelines — both paths run through select lenders in Lendmire’s wholesale network, with eligibility and terms confirmed in underwriting.
What If the File Doesn’t Clear?
Rank your levers by how much each one moves the answer. Building type and loan size are first, because they set the cap.
| Lever | What it does | Tradeoff |
|---|---|---|
| Choose a warrantable building | Opens the larger leverage ladder | Fewer buildings to pick from |
| Put more cash down | Fits the loan under the cap | Ties up equity |
| Lower the purchase price | Shrinks the loan toward the cap | Different unit or building |
| Use interest-only | Lifts coverage on a thin ratio | Does not change the cap |
| Switch rental strategy | May change the income test | Short-term rental has its own limits |
For many investors, the real decision is cash against building choice. Putting half the price into one condo can make sense if the unit is rare. Comparing it with a warrantable building at the same price, where the same borrower may reach 75% leverage, is the cleaner test. Often the better move is a unit in a building that passes review, even if it is a little less glamorous.
Pricing can also differ for non-warrantable collateral from one lender to the next. Some lenders add terms for these buildings, and others will not touch them. That variance is the main reason a broker shops the file across the network.
Down Payment, Reserves, and Closing Cash Are Three Different Piles
The down payment is not your total cash requirement. Reserves and closing costs sit on top of it, and readers confuse them constantly.
- Down payment: your share of the price, set by the leverage the file reaches.
- Reserves: liquid cash left after closing. Six months of PITIA on the subject property is typical, and twelve months for first-time investors. No extra reserves apply to other financed properties, and a borrower can hold up to 20 financed properties.
- Closing costs: the lender, title, and appraisal costs, which vary by file.
Source of funds matters at this size. Lenders trace large deposits, and funds that sit in a new account or move between entities draw questions. Gift funds are treated differently from your own assets and depend on the program.
A document checklist makes the file smoother:
- HOA questionnaire, budget, reserve study, and litigation disclosure
- The governing documents, checked for any rental restriction
- Appraisal reports and the lease or rent analysis
- A current credit report
- Entity documents if the property is vested in an LLC
- Statements showing the source of the down payment and reserves
A practitioner observation from large-balance files: the building questionnaire is usually the slowest document to arrive and the one most likely to surprise a buyer. Ask for it before you commit to an offer, not after.
Frequently Asked Questions
What is the minimum down payment on a $3M non-warrantable condo?
Plan on roughly half the price. The network’s typical non-warrantable cap is 75% leverage and a $1,500,000 loan, and a $3M price at 75% leverage exceeds that loan cap. Bringing the loan under it means about 50% down. A select lender may look at more on a strong file, subject to underwriting. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Can I buy a $3M condo with little or no money down?
No. Leverage on a purchase tops out at 75% on loans between $1,500,000 and $3,000,000, and a non-warrantable building lowers the effective leverage further. Strong credit and coverage earn the top cell in the band, but they do not create a lower-down program.
Does a short-term-rental condo change the number?
Yes, it tightens it. Short-term-rental files stop at $2,000,000, need coverage of 1.00 or higher, and count income at 80% of gross. Buildings that operate like hotels fall under condotel limits, with a $1,500,000 loan cap.
What happens if the appraisal comes in low?
Leverage generally applies to the lower of price and appraised value, so a low appraisal reduces the loan. You cover the difference in cash or renegotiate the price. Above $2,000,000 two appraisals apply, so there are two values to clear.
Do reserves count toward the down payment?
No. Reserves are cash left after closing, typically six months of PITIA on the subject property, and twelve months for first-time investors. On loans above $3,000,000, cash-out proceeds cannot satisfy reserves.
Putting the Numbers on Your Own Condo
If you are buying or refinancing a high-balance rental property and want to see how the numbers work, Lendmire can help you compare super jumbo DSCR loan options based on the property income, the loan balance, credit profile, leverage, and investor goals. Reach the team at 828-256-2183 or request a quote. Lendmire is a broker arranging financing through select lenders in its wholesale network across 41 markets, including Washington, D.C. Tax treatment varies; consult a qualified professional.
At this price, the condo’s HOA paperwork will tell you more about your down payment than your credit score will.
For current guidelines and terms, see Lendmire’s super jumbo DSCR loan programs page.
Lendmire’s self-employed mortgages page presents both super jumbo programs, bank statement and DSCR, side by side.
About Lendmire
Lendmire is a DSCR-focused mortgage brokerage, NMLS# 2371349, placing investor loans across 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed by the lender around a property’s rental income rather than personal income documentation, which fits LLC-held rentals, self-employed investors, and portfolios scaling past conventional financed-property limits. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Scotsman Guide: non-QM lending definition and performance
2. Scotsman Guide: DSCR calculation basics
4. Fannie Mae Selling Guide B4-2.2-02
This article is part of Lendmire’s super jumbo DSCR loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How Much a Super Jumbo DSCR Loan Lends Above the Standard Ceiling · How Non-Warrantable Luxury Condo STR Exposure Rules Work for Super Jumbo DSCR · How to Challenge a Low Appraisal on a Non-Warrantable Condo DSCR
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.