The Quick Read: Qualifying means passing two separate tests: your assets must support the loan on one of two paths, and the condo building must clear a project review run by the lender on its own terms. Strong assets cannot fix a building with serious problems, and cash-out proceeds from the same loan never count as qualifying assets.
- Two paths, one at a time: the asset qualifier path covers the whole loan with eligible assets, while the asset depletion path turns assets into monthly income.
- Cash-out leverage: the asset depletion path allows up to 60% on a cash-out refinance, on a principal residence, second home or investment property, subject to underwriting.
- Documents: expect no traditional personal-income documentation, pay stubs or employment verification, but full asset statements and condo project documents.
- Building first: litigation, thin reserves and heavy investor concentration can narrow the options or lower leverage.
Many condo owners have large balances and thin documented income. Retirees, business sellers and portfolio households fit that description. This guide walks through how these files actually work, from the first self-check to the application sequence. It is a consumer-purpose mortgage on a principal residence or second home, with investment property available only on the depletion path. Every figure below is a ceiling or floor, not an offer, and each file is underwritten individually.
What Is an Asset-Based Cash-Out Refinance?
An asset-based cash-out refinance replaces your current mortgage with a larger one and pays you the difference, with qualification resting on your verified assets rather than pay stubs or tax returns. Lendmire’s asset-based mortgage programs are placed through select lenders in its wholesale network. Lendmire is the broker. The lenders review and decide.
The loan is fully underwritten. The difference is the evidence: statements for your accounts instead of income paperwork. Federal rules allow this approach. Under the CFPB’s Regulation Z provision on repayment ability, a lender may base its decision on income, on assets other than the home being financed, or on both. That last phrase matters. The equity in the condo itself cannot be the qualifying asset on the qualifier path.
What Makes a Condo Non-Warrantable?
A condo is non-warrantable when its project fails the standards that agency-backed loans require. Agency rules are only a reference point here, because asset-based loans are not sold to Fannie Mae or Freddie Mac. The lender runs its own project review. Still, the agency list shows what triggers the label.
Fannie Mae’s Selling Guide on ineligible projects names several defects. These include pending litigation tied to safety, structural soundness or habitability, hotel-style operations and mandatory rental pooling. It also says Fannie will not buy loans on units in projects marked unavailable in its Condo Project Manager tool.
| Building issue | Typical effect on a cash-out file |
|---|---|
| Pending litigation | Closer review, possible lower leverage |
| Low or missing reserves | Tighter review, possible decline |
| High delinquent dues | Added scrutiny of HOA finances |
| Hotel-style or rental pooling | Often a hard stop or stricter limits |
| Critical repairs or evacuation orders | May be declined or restricted |
Treat the last row as a practitioner expectation, not a published rule. Program overlays differ by lender.
A non-warrantable label is not an automatic decline. It usually means closer review and often lower leverage, which is why the building comes first in your planning.
How Does Underwriting Treat Your Assets?
Underwriting is reviewed around one path at a time, and the two are never blended. Name the path whenever you compare figures, because the percentages and leverage limits differ.
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| How assets work | Eligible assets must equal or exceed the whole loan | Usable assets divided by 60 months become income |
| Income documented | None | Derived income runs through debt-to-income test |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Credit | 600 minimum | The lender’s matrix |
| Statements | Two months per account, 60 days seasoning | Aged 120 days, plus one within 45 days |
Both paths are subject to underwriting and lender guidelines.
The asset qualifier path
Here, the share of each balance that counts must cover the entire loan. Brokerage accounts, certificates of deposit, money market and savings count at 100%. Retirement accounts count at 90% under age 59½ and 100% at 59½ or older. Accounts combine.
Run the arithmetic as an illustration. Take an $800,000 loan with $330,000 in brokerage accounts (counts at 100%, so $330,000), $300,000 in a 401(k) for a borrower under 59½ (counts at 90%, so $270,000) and $200,000 in savings (counts at 100%, so $200,000). That is $800,000 of usable assets, enough to qualify on assets alone. The lender’s own calculation governs.
Leverage on this path reaches 80% on a purchase and 75% on a refinance. Whether cash-out proceeds are allowed on the qualifier path, and at what leverage, is set by the lender and is not published. Ask your broker before assuming it is available. Reserves are not required at or below 75% loan-to-value; above that, the lender sets them.
The asset depletion path
This path suits borrowers who want a cash-out and have strong assets but need income to carry the payment. Usable assets divided by 60 months become qualifying income, which must carry the housing payment and other debts through the debt-to-income test.
Here, securities count at 80%, retirement accounts at 70% at any age, real-estate equity at 60%, and cash accounts and certificates of deposit at 100%. For example, $1,500,000 in securities counts at 80%, or $1,200,000, and $300,000 in cash counts at 100%. That is $1,500,000 usable, divided by 60 months, or $25,000 of monthly qualifying income. That income then has to carry the housing payment and other debts.
Cash-out leverage on this path is up to 60% on a principal residence, second home or investment property. Purchases and rate-and-term refinances run up to 80% on a principal residence or second home, and up to 65% on an investment property. Minimum qualified assets are the lesser of $1,000,000 or 1.25 times the loan, and never below $250,000 liquid when depletion is your only income source. A first-time investor needs a 700 score.
Which Assets Do Not Count?
Cash-out proceeds from the same refinance never count as qualifying assets or reserves.
Several categories are not eligible on the depletion path: 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.
Privately held company stock is not an eligible asset on either path. If your wealth sits in a closely held company, the documented route is liquid assets: seasoned proceeds from a sale or buyout, cash, public securities and retirement accounts at their percentages. Cryptocurrency, precious metals, collectibles and pledged or borrowed funds are likewise not published as eligible. Convert them to a seasoned cash balance in a regulated account, and the lender reviews the source.
How Does the Building Change Your Cash-Out?
The building is the second test, and it is the one borrowers underestimate. The lender reviews the project on its own terms. Typical review points are reserves, delinquencies and litigation. Many file packages ask for governing documents, the budget and the reserve statement. Of these, the reserve statement is often the most revealing.
Across a wholesale network, the pattern is consistent. Borrowers with strong assets and a troubled building usually stall at the project review, not at the asset review. Assets cannot cure a project problem. If you are weighing a purchase, a building with a recent special assessment or heavy investor ownership deserves scrutiny before you commit, because HOA costs also erode your cash position.
Leverage stacking applies as well. The tightest limit wins: the asset-path cash-out ceiling, any condo-specific cap and the loan-size cap. Keep the figures straight. A 60% cash-out ceiling on the depletion path is a different limit from what a DSCR or other rental-based program might allow on the same building. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Occupancy also matters. Principal residence and second-home loans are consumer credit, so the repayment-ability rule applies. A business-purpose investment loan generally sits outside it, and the purpose is a fact-specific determination. Investment property qualifies only on the depletion path, where the loan is business-purpose.
How Do You Apply, Step by Step?
Work through these steps in order. Doing the building check first saves time and money.
1. Check the building. Ask the HOA or management company for the budget, reserve statement, litigation disclosure and owner-occupancy data. Learn early whether the project looks non-warrantable.
2. Inventory your assets. List each account, its type and its balance. Mark anything on the not-eligible lists above.
3. Pick a path. If eligible assets cover the whole loan, the qualifier path may fit. If you want assets converted to income, the depletion path applies. Your broker can run both.
4. Check seasoning. The qualifier path needs 60 days and two months of statements per account. The depletion path needs statements at least 120 days old plus the latest within 45 days. Sale-of-business, inheritance and legal-settlement funds are excused from that seasoning.
5. Gather borrower documents. Collect asset statements, ID, the current mortgage statement and insurance. Expect no traditional personal-income documentation, pay stubs or employment verification. The assets are still documented.
6. Submit for review. The broker places the file with a select lender, who reviews it. Disclosures that apply to a consumer mortgage come with the file.
7. Support the project review. Provide the HOA documents and answer the lender’s questionnaire.
8. Complete the appraisal. Condo units typically use an individual condo unit appraisal report.
9. Hold your balances steady. Do not move or spend qualifying funds mid-file. A drop in balances can change the math.
Title and paperwork should match. Mismatched names on insurance, statements or the mortgage are a common source of delay in lending generally.
Where Does the General Rule Break?
- Condotels. Hotel-style operation is ineligible under agency rules, and non-QM programs usually apply tighter overlays. A condotel may carry lower leverage than an ordinary non-warrantable condo.
- Mislabeled buildings. Sometimes a project labeled non-warrantable simply needs better documentation. Updated reserve and litigation letters can change the review.
- Free and clear. A paid-off condo still counts as cash-out when you pull money from it. The 60% depletion-path ceiling applies.
- Status changes mid-file. If the building’s litigation or reserve picture changes during underwriting, the lender may re-review the project and adjust terms.
- Credit events. A housing event needs four years of seasoning on the depletion path, and multiple bankruptcies are not eligible. One 30-day late in the last twelve months is considered case by case.
Asset-Based, DSCR or Bank Statement?
The right product depends on what is strongest about your file.
| Your situation | Likely fit |
|---|---|
| Large balances, thin documented income | Asset-based |
| Rental income comfortably covers the debt | DSCR, which is business-purpose rental financing |
| Self-employed with steady deposits | Bank statement program |
If your rent covers the obligation, DSCR may offer higher leverage on a rental condo. Compare the cash-out ceilings side by side before choosing. A DSCR HELOC, a second lien, is another route for people who want to keep their first mortgage. Lendmire’s piece Asset-Based Cash-Out Refinance Requirements on a Non-Warrantable Condo covers the requirement list in more detail.
Key Terms Defined
Non-warrantable condo: a condo project that fails agency project standards, so the unit needs specialty financing.
Asset qualifier path: a way to qualify where eligible assets cover the entire loan amount.
Asset depletion path: a way to qualify where usable assets divided by 60 months become monthly income.
Project review: the lender’s check of the building’s reserves, delinquencies and litigation.
Seasoning: the time funds must have been in your accounts before they count.
Common Mistakes
- Counting cash-out proceeds as assets or reserves.
- Assuming strong assets override a bad building.
- Listing privately held stock as an asset.
- Moving money between accounts during underwriting.
- Mixing the two path tables, for example applying depletion percentages to a qualifier file.
If a file is declined on the building, Lendmire’s article Can You Get Approved for an Asset-Based Cash-Out Refinance on a Non-Warrantable Condo? walks through the realistic options.
Frequently Asked Questions
Can I refinance a non-warrantable condo using only assets?
Yes, through select programs and subject to underwriting. The qualifier path needs eligible assets that equal or exceed the entire loan, and the depletion path converts assets to income. Either way, the building must clear the lender’s project review.
Do my cash-out proceeds count toward qualifying assets?
No. Cash-out proceeds from the same refinance never count as qualifying assets or reserves on either path. Qualification has to rest on assets you already hold and have documented.
Does a condotel work the same way?
Not usually. Hotel-style operations draw tighter overlays, and leverage is often lower than for an ordinary non-warrantable condo. Confirm how the building is classified before you apply.
Can I move to conventional financing later?
Possibly, if the building’s status changes and it meets agency project standards. That depends on the project, not your assets. Many owners stay in a specialty loan until the building cures its issues.
Will non-warrantable status hurt resale?
It can narrow the buyer pool, since buyers need specialty financing too. Exit risk depends on the market and the building’s condition, so weigh it before borrowing against the unit.
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. Consumer mortgage lending is licensed in 16 states, so confirm your state is covered. Programs change and every file is underwritten individually.
Condo buildings are the variable no balance sheet can fix, so the most useful hour in this process is the one spent reading the reserve statement before anything else.
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 broker licensed for consumer lending in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages for self-employed and high-net-worth borrowers are arranged through wholesale lenders on primary residences, second homes and investment properties; every file is underwritten by the lender under its program guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
2. Fannie Mae Selling Guide B4-2.1-03, Ineligible Projects
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Best Asset-Based Cash-Out Refinance Program on One Income · Best Asset-Based Cash-Out Refinance Program on a Rural or Non-Warrantable Property · Can You Get Approved for an Asset-Based Cash-Out Refinance Using a 529 Plan?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.