The Quick Read: Usually, yes. Tennessee has no special rule that blocks an asset-based mortgage on a condo, but two separate gates apply: you must qualify on your assets, and the building must pass the lender’s project review. Passing one gate does not pass the other, and every file is underwritten individually.
- Qualifier path: eligible assets must cover the whole loan, and no employment or income is documented.
- Depletion path: usable assets divided by 60 months become qualifying income that runs through the debt-to-income test.
- Leverage: up to 80% on a purchase on the qualifier path; up to 80% on a purchase on the depletion path for a principal residence or second home.
- The condo gate: litigation, thin reserves, heavy investor concentration, or an HOA rental rule can sink a specific building.
- Tennessee angle: the state matters through condo-association law, not through lending rules.
An asset-based mortgage is a consumer loan for people with large balances and little documented income. Think retirees, business sellers, and anyone living off a portfolio. It is placed through select lenders in Lendmire’s wholesale network, subject to underwriting. Lendmire is the broker, not the lender. Program details change, so treat every figure below as a ceiling or floor, not an offer.
Does Tennessee Law Change the Answer?
No. Across the programs Lendmire places files with, the program figures do not change by state. Tennessee shows up in two places: how condo associations must behave, and what an HOA may do about rentals.
Tennessee has two condo statutes. The Condominium Act of 2008 covers condos created after January 1, 2009, and the older Horizontal Property Act covers earlier ones, per Nolo’s Tennessee HOA and condo guide. The original bill text is on the Tennessee General Assembly site. That is the 2008 bill, not the current code.
Why should a borrower care which statute applies? Because it shapes what the association must hand over and how it can collect from owners. Your lender cares about both.
Which Path Fits You?
Pick by what your balance sheet looks like.
Asset qualifier path. Your eligible assets, after the credit percentages, must equal or exceed the entire loan amount. No employment or income is documented. Loans run up to $4,000,000, with leverage up to 80% on a purchase and 75% on a refinance for a principal residence or second home. The minimum credit score is 600, subject to underwriting. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Asset depletion path. The lender adds up usable assets after haircuts and divides by 60 months. The result is monthly qualifying income. That income must carry the housing payment and your other debts through the debt-to-income test. Loans run $125,000 to $3,500,000. The lender’s own score and loan-amount matrix sets credit requirements.
A borrower is qualified on one path at a time. The two never blend.
What Counts as an Asset?
The percentages differ by path, so read each row for the path it names.
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Brokerage accounts | 100% | Securities at 80% |
| CDs | 100% | 100% |
| Money market / savings | 100% | Cash accounts 100% |
| 401(k) / IRA | 90% under 59½, 100% at 59½+ | 70% at any age |
| Privately held stock | Not eligible | Not eligible |
| Real-estate equity | Not listed | 60% |
Crypto, precious metals, collectibles, and borrowed or pledged funds are not published as eligible on either path. The documented route is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender. The same goes for privately held company stock: a sale or buyout converted to a seasoned cash balance is the route.
Here is the qualifier math in plain terms. Say the loan is $800,000. You hold $330,000 in brokerage accounts (counts at 100%), $300,000 in a 401(k) while under 59½ (counts at 90%, or $270,000), and $200,000 in savings (100%). That is $800,000 of usable assets, which covers the loan on assets alone.
Now the depletion version. Suppose you hold $1,500,000 in securities (80% counts, or $1,200,000) plus $300,000 in cash (100%). Usable assets total $1,500,000. Divide by 60 months and you get $25,000 of monthly qualifying income. That income then has to carry the housing payment and other debts. The lender’s own calculation governs.
You do not have to sell your portfolio or withdraw that income. It is a coverage figure, not a withdrawal schedule.
Seasoning and Minimums
“No income documentation” never means “no documentation.” Your assets are documented on both paths.
- Qualifier path: 60 days of seasoning and two months of statements for each qualifying account.
- Depletion path: 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.
- Depletion minimums: qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan, and never below $250,000 liquid when assets are your only income source.
- Reserves: none required on the qualifier path at or below 75% loan-to-value; above that, the lender sets them.
The Condo Gate: The Building Gets Reviewed Too
Here is the part most borrowers miss. Your assets can be spotless and the loan can still stall on the building.
Lenders review the unit and the project. Across the programs in the network, the project review usually looks at HOA budget and reserves, insurance, pending litigation, the share of units owned by investors, commercial space, and rental restrictions.
Most lenders send the association a condo questionnaire. Tennessee law helps here. Under Tenn. Code §§ 66-27-502 and 503, an association must provide specified information to a unit owner, purchaser, or lender on request, within ten business days. Check that timing against the statute and your contract’s due-diligence period. Ask for the answers in writing.
Insurance is part of the review. Tennessee’s act requires the association to carry property and liability coverage on common elements, with property coverage at no less than 80% of replacement cost, per a Cedar Management summary. It is a secondary source, so verify it against the statute.
Delinquent dues matter too. The association holds a lien on a unit for unpaid assessments under § 66-27-415, though a first mortgage recorded before the delinquency is generally excluded from that lien’s priority. That is one reason lenders look at how many owners are behind.
What Is Fatal and What Is Fixable?
Most project problems affect terms, not eligibility. A few can end the file.
| Building issue | Typical effect |
|---|---|
| Heavy investor concentration | Tighter terms or lower leverage |
| Thin reserves | Case-by-case; may limit options |
| Pending litigation | Can sink the building |
| Hotel-style rental program | Fewer lenders; case by case |
| Condo questionnaire unanswered | File stalls until it is |
A non-warrantable condo is one that fails the standard agency checklist. That label does not rule out this program by itself. It usually means a more conservative review, fewer lenders, or lower leverage. Whether any given building is acceptable is the lender’s call, not a promise.
Be careful with a hotel-style condo, often called a condotel. It has a front desk and a rental program. Few lenders take them, and each is reviewed case by case.
Tennessee Scenarios
Picture a retiree downsizing to a downtown condo in a newer tower. Her brokerage and savings cover the loan, so she fits the qualifier path. The risk is not her; it is whether the developer still controls the association or sales are still underway. Ask early.
Say you are a business seller buying a second home in a mountain resort building near Gatlinburg or Pigeon Forge. Your sale proceeds are excused from the seasoning window on the depletion path, but the building may have a heavy rental pool. That raises the investor-concentration question, so ask about it early.
Consider a household living on a large securities portfolio with modest documented income. The depletion path turns that portfolio into qualifying income, and the debt-to-income test then decides whether the housing payment fits.
Primary, Second Home, or Rental?
Occupancy changes the leverage, and the investment option exists only on the depletion path.
| Occupancy | Qualifier path | Depletion path |
|---|---|---|
| Principal residence / second home, purchase | Up to 80% | Up to 80% |
| Refinance | Up to 75% | 80% rate-and-term; 60% cash-out |
| Investment property | Not offered | 65% purchase / rate-and-term; 60% cash-out |
Cash-out proceeds never count as qualifying assets on the depletion path. Qualifier-path cash-out terms are set by the lender and not published.
If you plan a pure rental, a different product usually fits better. DSCR loans are designed for non-owner-occupied investment properties and are reviewed differently from a standard owner-occupied mortgage. They qualify primarily on property-level rental income covering the payment, subject to lender guidelines. Condo dues enter the payment side of that ratio, so a condo can look weaker than a house with the same rent.
Short-Term Rentals in a Condo
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. The Tennessee-specific point is that HOAs and condominiums may restrict short-term rentals through their governing documents under Tenn. Code § 13-7-605. No loan can override that restriction.
Rules can also change after you buy. A decision summarized by Ralls & Wooten held that a residential-purposes-only covenant did not bar short-term rentals, while later amendments imposing a 30-day minimum lease did. Read the covenants and every amendment before you make an offer.
Documents and Deal-Killers
Before contract, gather:
1. Statements for every account you plan to use, aged to the path’s seasoning rule.
2. The HOA budget, reserve information, insurance certificate, and litigation disclosure.
3. The completed condo questionnaire, requested in writing.
4. The governing documents and any amendments.
Common mistakes: using an account type the path does not count, assuming the HOA knows its own status, skipping the covenant review, and letting statements go stale. A building’s status can also change between contract and closing, so keep the lender informed of any new assessment or lawsuit.
Key Terms Defined
Asset qualifier: a path where eligible assets alone must cover the entire loan.
Asset depletion: a path that divides usable assets by 60 months to create qualifying income.
Haircut: the share of an account’s balance a lender will not count.
Seasoning: how long funds must sit in your account before they count.
Non-warrantable condo: a condo project that fails the standard agency checklist for reasons such as litigation, thin reserves, or investor concentration.
Condotel: a hotel-style condo with a front desk and rental program.
Who This Isn’t For
If your liquid assets are modest, the minimums will block you. If the building is in active litigation, the project can fail regardless of your profile. If you document income through deposits, a bank statement program may fit better. If the property is a pure rental, DSCR is the cleaner route.
Frequently Asked Questions
Does Tennessee have its own rule for asset-based mortgages on condos?
No. The program figures do not change by state. Tennessee law matters through condo-association statutes and HOA rental rules, not through lending limits.
Do I have to withdraw money or sell my portfolio?
No. On the depletion path, the 60-month calculation produces a qualifying income figure, not a withdrawal schedule. On the qualifier path, your assets simply have to cover the loan. Lenders still document and verify them.
Do retirement accounts count?
Yes, with limits. On the qualifier path, a 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. On the depletion path it counts at 70% at any age.
Can a non-warrantable condo qualify?
Often it can be considered, but with a more conservative review. Terms may tighten, and litigation or weak reserves can still sink a specific building, subject to underwriting.
What if the HOA won’t provide documents?
Request them in writing and point to the ten-business-day timing in Tennessee’s statute. Check that timing against your contract’s due-diligence period, since the loan cannot move without the building’s answers.
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. Reach the team at 828-256-2183.
Condo buildings in Tennessee will keep getting judged one at a time, so the smartest first move is the association’s paperwork, not the loan application.
Lendmire’s asset-based mortgage in Tennessee page presents the program for Tennessee borrowers.
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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References
1. Nolo: Tennessee HOA/COA laws
2. Tennessee General Assembly HB2752
3. Cedar Management: Tennessee HOA laws
4. Cedar Management: Tennessee STR Unit Act
5. Ralls & Wooten: legal ramifications of short-term rentals
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 a Tennessee Landlord in Retirement Get a Mortgage on Rents and Savings? · Can a Tennessee Widow Qualify for a Mortgage on Life Insurance and Retirement Assets? · How a 401(k) Counts Toward a Tennessee Asset Qualifier Mortgage Under Age 59½
Guides: Asset-Based Mortgage in Tennessee
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.