The Quick Read: Yes, in many cases: a California condo can be financed on an asset-based mortgage, either by using your assets to cover the loan outright or by turning them into qualifying income, as long as the condo project itself passes the lender’s review and the numbers fit through select programs, subject to underwriting. Your balances decide whether you qualify. The building’s health and paperwork decide whether the condo is acceptable.
- Two paths exist. The asset qualifier path counts assets against the whole loan. The asset depletion path divides usable assets by 60 months to create monthly income.
- You are on one path at a time. The figures for each never blend.
- The condo gets its own review. Lenders read the homeowners association (HOA) budget, reserves, litigation and insurance before they look at you.
- Investment condos are narrower. Only the depletion path covers them, at lower leverage.
Everything below is illustrative. Each file is underwritten individually. This is not a commitment to lend.
What Does “Asset-Based Mortgage” Mean Here?
An asset-based mortgage is reviewed around what you own instead of what you earn. The lender documents your balances and then either matches them to the loan or converts them into income. This page covers consumer asset-based mortgages for people who are cash-heavy and income-light.
The term gets used for other products, so a quick sorting helps:
- DSCR loans (debt service coverage ratio loans) underwrite a rental property on its own rent. People sometimes call them asset-based because the property is the asset being judged. They get their own section further down.
- Asset qualifier and asset depletion loans are the products this article is about. Your liquid balances do the qualifying.
The typical borrower is a retiree, someone who sold a business, an heir or settlement recipient, an early-retired professional, or a household living on a portfolio. Balances are large and documented income is small.
Which Path Fits You?
Pick the asset qualifier path if your eligible assets can cover the entire loan. Pick asset depletion if you want your assets turned into monthly income that carries the payment. Across the wholesale network where Lendmire places files, the two programs have different leverage, asset credit and paperwork.
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| How assets work | Must equal or exceed the whole loan | Usable assets ÷ 60 months = income |
| Purchase leverage | Up to 80% | Up to 80% (65% investment) |
| Refinance leverage | Up to 75% | 80% rate-and-term; 60% cash-out |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Income documented | None | Derived income runs through DTI |
On the qualifier path, those leverage figures apply to principal residences and second homes. On the depletion path, 80% on a purchase or rate-and-term refinance and 60% on a cash-out refinance apply to a principal residence or second home. An investment property gets 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Cash-out proceeds never count as qualifying assets. Whether the qualifier path allows cash-out at all is the lender’s decision, so don’t plan around it.
All of these are ceilings, not offers, and they are subject to underwriting through select programs.
How Much of Your Balance Counts?
Each account type counts at a percentage, and the percentages differ by path. Cash-like accounts count in full on both. Everything else gets trimmed to some degree.
Asset qualifier path:
- Brokerage accounts, certificates of deposit, money market and savings count at 100%.
- A 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older.
- Accounts combine.
Asset depletion path:
- Cash accounts and certificates of deposit count at 100%.
- Securities count at 80%.
- Private stock counts at 75%.
- Retirement accounts count at 70% at any age.
- Real-estate equity counts at 60%.
Some items do not count on the depletion path at all: 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, business accounts beyond your ownership share, 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 source reviewed by the lender.
Retirement withdrawals can carry tax consequences. Tax treatment varies; consult a qualified professional.
Two Worked Examples
Qualifier path: take an $800,000 loan. Say you hold $330,000 in brokerage accounts (100% counts, so $330,000), $300,000 in a 401(k) while under 59½ (90% counts, so $270,000), and $200,000 in savings (100%, so $200,000). That adds up to $800,000 of usable assets. The file is reviewed on assets alone, with no employment or income documented.
Depletion path: take $1,500,000 in securities (80% counts, so $1,200,000) plus $300,000 in cash (100%). That is $1,500,000 usable, divided by 60 months, which gives $25,000 of monthly qualifying income. That income then has to carry the full housing payment and your other debts through the debt-to-income (DTI) test. On a condo, the HOA dues sit inside that payment.
The lender’s own calculation governs in every case.
Why Does the Condo Change the Picture?
A house is judged on you and the home. A condo is judged on you, the unit and the entire building. You can have a spotless balance sheet and still get declined because of the association’s finances.
Lenders look at the project for risks like these:
- low reserves in the association budget
- pending litigation
- heavy commercial space or hotel-style operations
- one owner holding many units
- a high share of investor-owned units
- weak or missing insurance
“Warrantable” is a term borrowed from the big agency lenders. It means the project passes their standards. A project that fails is called non-warrantable. Bankrate notes that non-QM lenders use manual underwriting with flexible guidelines, which is why the agency checklist is not the final word for asset-based files.
In our network, a warrantable condo is the simplest case. Non-warrantable condos are not automatic declines, but eligibility can vary building by building, and leverage or pricing may adjust. Condotels (condo units run like hotel rooms) get case-by-case review. A few lenders in the network decline them outright, so a condotel is the building type to ask about first.
What Does California Add to a Condo Purchase?
California supplies the paperwork. State law requires sellers to hand buyers a packet of association documents, and underwriters read the same documents. It does not block investors or asset-based borrowers.
Most California condo refinances also require an HOA questionnaire covering pending litigation, reserves, special assessments and balcony inspection status. A recent law now adds the latest exterior elevated element inspection report to that packet. If the building’s rules restrict rentals, the seller has to disclose that in writing. That matters a great deal if you plan to rent the unit out.
Three California issues deserve a look before you make an offer.
Balcony inspections. California’s SB 326 requires inspections of exterior elevated elements, such as balconies and walkways, in buildings with three or more units. The inspections repeat on a nine-year cycle. A missing or overdue report is a red flag. Lenders want to see the inspection report, a reserve study showing money set aside, and a repair and assessment plan, then they decide case by case.
Reserves. CondoSignal’s California summary says state law requires a reserve study at least every three years but does not require the association to fund it. Capital work can therefore arrive as a special assessment instead of coming out of savings.
Insurance. The same source reports that wildfire and earthquake exposure has pushed many associations toward the state’s FAIR Plan or caused carrier non-renewals. Weak coverage can sink a project review, so ask the seller early what the master policy looks like.
One practical habit helps more than any other: request the HOA budget, the assessment statement and the reserve study before you offer, not after.
Can You Use It for a Second Home or a Rental Condo?
Yes for a second home, and yes for a rental condo on the depletion path only. A principal residence or second home can use either path. An investment property is limited to asset depletion, at 65% on a purchase or rate-and-term refinance and 60% on a cash-out refinance.
First-time investors on the depletion path need a 700 credit score. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
California condos near the coast often serve as vacation homes that also earn rental income. 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.
When a DSCR Loan Beats an Asset-Based Mortgage
If you are buying the condo purely to rent it, a DSCR loan is often the better tool. It qualifies primarily on property-level rental income covering the payment, subject to lender guidelines, and your personal assets matter less. The lender divides monthly rent by the full housing obligation, and that includes HOA dues. A condo with high dues and modest rent can show thin coverage, so get the dues figure early.
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, a point the CFPB’s Regulation Z text covers when it describes how business-purpose credit is treated. Select lenders in the network will look at coverage below 1.00 as well, with leverage and terms adjusting.
A simple way to choose:
| Your situation | Likely better fit |
|---|---|
| Big liquid balances, little income, living in it | Asset-based mortgage |
| Big balances, buying a rental, want income from assets | Asset depletion (investment tier) |
| Strong rent, thinner balances | DSCR loan |
| Income shows up as business deposits | Bank statement loan |
A bank statement loan is for borrowers who document income through deposits. It is a separate program with its own rules.
What Documents and Seasoning Do You Need?
You document the assets, even though you do not document income on the qualifier path. “No income documentation” never means “no documentation.”
- Qualifier path: assets need 60 days of seasoning, and you provide two months of statements for each qualifying account.
- Depletion path: statements must be at least 120 days old at application, plus one statement dated within 45 days. Funds from the sale of a business, an inheritance or a legal settlement are excused from that seasoning.
- Credit: the qualifier path has a 600 minimum score. The depletion path follows the lender’s matrix. Housing history is 0x30x12, meaning no 30-day lates in the last twelve months, and one late may be considered case by case. Multiple bankruptcies are not eligible, and a housing event needs four years of seasoning on the depletion path.
- Depletion minimums: qualified assets of 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. Asset-derived income may supplement documented income up to a 45% DTI, and the minimum-assets rule is waived when it does.
- 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.
Seasoning is the waiting period assets must sit in an account before they count. Leave the funds where they are, and keep statements for every account you plan to use.
Key Terms Defined
Asset qualifier: A path where eligible assets equal or exceed the entire loan and no income is documented.
Asset depletion: A path where usable assets divided by 60 months become monthly qualifying income.
Warrantable condo: A project that meets agency lenders’ standards for finances, ownership mix and use.
Non-warrantable condo: A project that fails those standards. It can still be financed through other programs, case by case.
Special assessment: A one-time charge the HOA levies on owners to cover costs reserves do not.
DTI (debt-to-income ratio): Monthly debts, including the housing payment, compared with monthly income.
Seasoning: The time assets or statements must be on record before the lender counts them.
Frequently Asked Questions
Can I use my 401(k) or IRA to qualify for a condo?
Yes, with different credit by path. On the qualifier path, 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. Both are subject to underwriting.
Do HOA dues count against me?
They do on both a qualifying-income test and a rental test. On the depletion path, the dues are part of the housing payment your derived income must carry through the DTI test. On a DSCR loan, they sit in the obligation that rent has to cover. High dues are one reason to get the HOA budget before you write an offer.
Does a non-warrantable condo disqualify me?
Not automatically. Non-warrantable projects are reviewed building by building, and leverage or pricing may adjust. Condotels are the toughest case, and some lenders in the network decline them outright. Your best protection is checking reserves, litigation, insurance and balcony inspection status before you commit.
Can I combine Social Security or a pension with my assets?
Yes, on the depletion path. Asset-derived income may supplement documented income up to a 45% DTI. When it supplements, the minimum-assets rule is waived. The qualifier path documents no income, so the question does not arise there.
Can I count cryptocurrency or business accounts?
Not as published. Neither is listed as eligible on either path, and borrowed or pledged funds do not count either. The documented route is converting the funds to cash in a regulated account and letting them season, with the lender reviewing the source.
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 that places files through select lenders in its network, and its consumer mortgage lending is licensed in California. Reach the team at 828-256-2183.
Lendmire’s asset-based mortgage in California page presents the program for California borrowers.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging bank statement and other alternative-documentation mortgages — P&L-only, 1099-only and asset-based paths — through a wholesale lending network. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
2. CondoSignal: California condo reserves and insurance
3. CFPB: Regulation Z, 12 CFR 1026.3
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 an Asset-Based Mortgage Fund a Jumbo Purchase? · Asset-Based Mortgage vs Home Equity Investment for Retirees Who Need Cash · How to Buy Before You Sell in Washington Using an Asset Qualifier Mortgage
Guides: Asset-Based Mortgage in California
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.