The Quick Read: A lender runs two separate reviews on this file. The first asks whether your assets, or the income built from them, can carry the loan. The second asks whether the building passes the lender’s own project review. A strong asset file cannot rescue a weak building, and a clean building cannot rescue thin assets.
- Cash-out is available mainly on the asset depletion path, which converts usable assets into monthly qualifying income, subject to underwriting.
- On a principal residence or second home, the depletion path tops out at 60% loan-to-value on a cash-out refinance. On an investment property it is also 60%.
- Cash-out proceeds never count as qualifying assets.
- The non-warrantable label usually trims leverage or loan size rather than ending the conversation.
- No traditional personal-income documentation, pay stubs or employment verification are needed, but every file is fully underwritten and your assets are documented with statements.
This is written for people with large balances and light documented income: retirees, business sellers, inheritance or settlement recipients, early-retired professionals, and households living off a portfolio. Lendmire is a mortgage broker. It places these files with select lenders in its wholesale network, and the figures below are ceilings and floors, never offers.
What Does “Non-Warrantable” Actually Mean?
A non-warrantable condo is one in a project that fails the standards agencies set for buying loans. It is a label on the building, not a judgment about you. The agencies publish their tests, and Fannie Mae’s Selling Guide lists ineligible project traits such as too much commercial space and too many units held by a single owner.
Common triggers include heavy investor ownership, thin HOA reserves, pending litigation, commercial space, one entity owning a large share, hotel-style operations and deferred maintenance. Any one can tip a building over the line.
Here is the part many borrowers miss. A lender placing a loan outside the agency channel runs its own project review and decides for itself what to accept. The agency label becomes a flag, not a verdict. Agency rules are also moving. The Michigan Community Association Law Blog reports that Fannie Mae retired its 50% investor-concentration limit for established condos under full review, while the single-entity limit remains and individual lenders may keep their own limits. So a building flagged for investor share alone may now read differently to the agencies, and still read the old way to a given lender.
Which Path Fits You: Assets Cover the Loan, or Assets Become Income?
The asset-based mortgage has two paths, and you qualify on one at a time. Our asset-based mortgage programs cover both. Pick the path first, because every number below depends on it.
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, subject to underwriting. Whether cash-out is allowed on this path, and at what leverage, is set lender by lender and is not published. Do not plan a cash-out around this path until a lender confirms it for your file. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Asset depletion path. Usable assets, after haircuts, are divided by 60 months to produce a monthly qualifying income. That income must carry the full housing payment and your other debts through the debt-to-income test. Loans run from $125,000 to $3,500,000.
For a non-warrantable condo cash-out, the depletion path is where the published leverage lives. The table shows the ceilings.
| Depletion path | Purchase or rate-and-term | Cash-out |
|---|---|---|
| Principal residence or second home | Up to 80% | Up to 60% |
| Investment property | Up to 65% | Up to 60% |
An investment property on this path is a business-purpose loan. Principal residences and second homes are consumer loans. These ceilings are the starting point. A non-warrantable project often lowers the working number further.
How Assets Are Counted
Not every dollar counts at face value. The share that counts differs by path, and that share is what the lender actually uses.
On the qualifier path, brokerage accounts, certificates of deposit, money market and savings all count at 100%. Retirement accounts count at 90% if you are under 59½ and 100% at 59½ or older. Accounts combine.
On the depletion path, cash accounts and certificates of deposit count at 100%. Securities count at 80%. Retirement accounts count at 70% at any age. Real-estate equity counts at 60%.
Some assets are not eligible. On the depletion path that includes 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. None of it counts: privately held company stock is not an eligible asset on either path. Neither are cryptocurrency, precious metals, collectibles, pledged or borrowed funds, or business accounts beyond your ownership share. A founder’s route is documented liquid assets. That means seasoned proceeds from a sale or buyout, cash, public securities and retirement accounts at their percentages. The lender reviews the source of those funds.
Your assets stay where they are. They are documented, not pledged, and you do not liquidate them to qualify.
The Underwriting Sequence, Step by Step
Here is how a file moves once a path is chosen. Steps six and seven are the ones that surprise people.
1. Screen the scenario. The lender confirms the occupancy, the project type and whether cash-out is allowed on the chosen path. Condotels, rental pooling and HOA rental bans are different problems from ordinary non-warrantable status, and they are caught early.
2. Verify the assets. Statements prove the balances. The qualifier path wants 60 days of seasoning and two months of statements per account. The depletion path wants 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.
3. Apply the credit percentages. Each account is cut to its counting share, as described above.
4. Convert to income (depletion path only). Usable assets divided by 60 months gives monthly qualifying income. The depletion path also needs qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance, and never less than $250,000 liquid when depletion is your only income source.
5. Run the debt-to-income test (depletion path only). The derived income must carry the new housing payment, HOA dues and your other debts. Asset income can also supplement documented income up to a 45% debt-to-income ratio, and the minimum-assets rule is waived when it does.
6. Order the building review. The lender sends a questionnaire to the HOA or management company and collects the budget, dues statement and master insurance details. Dommek’s guide to the condo lender questionnaire lists the usual topics: owner-occupied, rented and developer-owned unit counts, delinquencies, reserves, special assessments, lawsuits, commercial space and identified repairs. Qualifying on assets does not remove this step.
7. Appraise and apply the ceiling. The appraiser values the unit, and the lender applies the cash-out leverage ceiling to that value. Master insurance is reviewed for adequacy, and your own unit policy is quoted alongside it.
8. Final conditions. Credit, title and any outstanding building items are cleared before the lender issues final approval.
On credit, the qualifier path has a 600 minimum score. The depletion path follows the lender’s matrix. A first-time investor on the depletion path needs 700. Housing history is 0x30x12, a housing event needs 4 years of seasoning on the depletion path, and multiple bankruptcies are not eligible. All of it is subject to underwriting.
Which Limit Governs Your Cash-Out?
Several limits apply at once, and the tightest one wins. Think of it as a decision order.
First, the path. If cash-out is not available on the qualifier path for your lender, the deal works to depletion or stops. Second, the occupancy. The depletion ceiling is 60% on a cash-out whether the condo is a principal residence, second home or investment property. Third, the building. A project with heavy investor concentration, litigation or low reserves may be held below the program ceiling, or limited on loan size. Fourth, the asset math. If your usable assets fail the minimums or the debt-to-income test, the loan amount shrinks until they pass.
Notice what that means. The 60% is a ceiling, not a promise. The non-warrantable label usually costs leverage or loan size rather than eligibility, but the amount released is whichever limit bites first.
A Worked Example
This is illustrative arithmetic only. The lender’s own calculation governs. Say a retired investor holds $1,500,000 in securities and $300,000 in cash.
- Securities count at 80%: $1,200,000.
- Cash counts at 100%: $300,000.
- Usable assets total $1,500,000.
- Divided by 60 months, that is $25,000 of monthly qualifying income.
That $25,000 then has to carry the housing payment, the condo’s HOA dues and any other debts through the debt-to-income test. If it does, the deal works to the building review. If the building has a large pending special assessment, the lender will want the amount and timing, and that cost can squeeze the debt-to-income picture. Then the appraisal sets the value, and the cash-out ceiling sets the maximum loan.
Compare the qualifier shape. An $800,000 loan, supported by $330,000 in brokerage accounts (100%, so $330,000), $300,000 in a 401(k) under 59½ (90%, so $270,000) and $200,000 in savings (100%, so $200,000), counts $800,000 of usable assets. It is reviewed on assets alone, with no income documented, subject to underwriting.
One more rule governs both. Cash-out proceeds cannot count as qualifying assets. Pulling cash out of the condo does not pad your balance sheet for the next deal.
Where the General Rule Breaks
Some situations do not follow the usual pattern.
Rental restrictions and pooling. An HOA rental ban or mandatory rental pooling can sink a file even when the building is only ordinarily non-warrantable. These are separate obstacles.
Condotels and hotel-style projects. These usually sit in a tighter leverage bucket than an ordinary non-warrantable condo.
Litigation. Not all lawsuits weigh the same. Underwriters read structural-safety claims very differently from a minor dispute, and the questionnaire answer decides which one you have.
Small projects. Smaller condo projects, such as a walk-up with a few units, often get a shorter questionnaire, but the review still happens.
New or phased projects. Developer control and incomplete common elements are their own review items.
Agency contrast. Agencies are tightening in some places. GoverningDocs reports the agency reserve floor rising from 10% to 15% for applications dated on or after January 4, 2027. A lender outside that channel sets its own reserve test. Still, a building with thin reserves invites questions anywhere.
Agency asset programs. BestInterest explains that the two agencies do not offer a true cash-out refinance on an asset basis, because pulling equity shrinks the asset pool the qualification relies on. That is one reason this file runs through non-agency lenders.
Which Route Fits Your Situation?
The right program depends on how you document wealth and what the property does.
| If you… | Route that usually fits |
|---|---|
| Hold large liquid balances, light income | Asset-based mortgage |
| Show income through bank deposits | Bank statement program |
| Own a rental that covers its payment | DSCR, a business-purpose rental loan |
| Have strong tax-return income | Conventional-style full documentation |
Asset-based files avoid the rent test entirely, but the tradeoff is tighter cash-out leverage. For the rental-income route on the same type of building, Lendmire’s piece How Lenders Underwrite a DSCR Cash-Out Refinance on a Non-Warrantable Condo covers it. Different lenders in the network write these differently, so the best program for your situation depends on your statements, the property and the building.
Before You Apply: A Short Checklist
Gather these on your side:
- Statements for every account you plan to use, with the dates the paths require.
- A record of where large deposits came from, especially sale, inheritance or settlement funds.
- Your credit profile and housing history.
Ask the HOA or manager for these on the building side:
- The current budget and the reserve funding level.
- Any pending or threatened lawsuits, and any special assessments.
- The master insurance declarations.
- Owner-occupied, rented and developer-owned unit counts, plus any large single-owner share.
Ask early, because a building problem found after the appraisal costs you money and time.
Risks and Exit
Be honest about the downsides. A non-warrantable unit can be harder to resell, because buyers using agency financing may not be able to buy it. A big cash-out also does not help you qualify for the next purchase, since proceeds cannot count as assets. And a building can change status after you close, which can complicate a later refinance. A building can regain better standing if the underlying issue is cured, such as litigation resolved or reserves rebuilt. Plan the exit before you pull the equity.
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.
Key Terms Defined
Non-warrantable condo: a unit in a project that fails agency standards, so a lender outside the agency channel must review it on its own terms.
Cash-out refinance: a new loan that pays off the old one and releases part of the equity to you as cash.
Asset qualifier path: a path where eligible assets must cover the entire loan and no income is documented.
Asset depletion path: a path that divides usable assets by 60 months to create monthly qualifying income.
Seasoning: the time funds must sit in your account, shown by statements, before a lender counts them.
Debt-to-income test: a comparison of your monthly debts, including the new housing payment, against your qualifying income.
Loan-to-value (LTV): the loan amount as a percentage of the appraised value.
Frequently Asked Questions
Can I cash out on assets alone?
On the asset qualifier path, assets alone can qualify the loan, but cash-out terms there are set lender by lender and are not published. On the depletion path, cash-out is published at up to 60% loan-to-value on a principal residence, second home or investment property, subject to underwriting.
Do cash-out proceeds count as assets?
No. Proceeds never count as qualifying assets. Your qualification has to stand on the balances you held before the loan, so a large cash-out does not strengthen your next application.
Will the non-warrantable label get me declined?
Not by itself. The label usually limits leverage or loan size. What can end a file is a separate issue, such as an HOA rental ban, mandatory rental pooling, or a building that fails the lender’s own project review.
Does my privately held company stock count?
No. Privately held company stock is not an eligible asset on either path. If you sold or bought out your stake, the seasoned cash proceeds are what count. Public securities and retirement accounts count at their stated shares.
Does an investment property get different treatment?
Yes. On the depletion path, an investment property carries up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out, against 80% and 60% for a principal residence or second home. The investment loan is business-purpose.
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. Everything above is subject to lender guidelines and underwriting, and none of it is a commitment to lend.
For how equity extraction works on an investment property, see 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
2. Michigan Community Association Law Blog
3. Dommek condo lender questionnaire guide
5. BestInterest
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Asset-Based Cash-Out Refinance Requirements on a Primary Home · Best Asset-Based Cash-Out Refinance Program on a Rural or Non-Warrantable Property · Asset-Based Cash-Out Refinance Lenders When Traditional Income Verification Is a Barrier
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.