The Quick Read: A private bank ARM tends to fit a borrower with deep liquidity, clean statements and a wish to keep deposits at one institution. A non-QM fixed loan tends to fit a borrower whose traditional personal-income documentation understates income, or who wants a structure that never resets over a long hold.
- An ARM (adjustable-rate mortgage) has a rate that is fixed for a set period and then adjusts. A fixed loan does not adjust.
- The two options sit on different axes. One describes how the rate behaves. The other describes who holds the loan and how you qualify.
- The building, not you, makes a condo non-warrantable. That label only closes the door on agency loans.
- Through select wholesale programs, non-warrantable condos run to 80% LTV, subject to full underwriting and the loan-size ladder.
- Above $4,000,000, every file is reviewed case by case before submission. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Who Each Option Is Really For
Here is the honest answer. A private bank ARM is a relationship loan. The bank looks at your whole balance sheet, often wants deposits or investments moved over, and decides on the building by exception. A non-QM fixed loan is a structure loan. Qualification runs on documented deposits, assets or property cash flow, and the building is sorted into a category with its own limits.
Neither is cheaper, safer or smarter in every case. Terms at a private bank are set bank by bank, so treat the left column below as published industry norms, not a promise.
One more point before the table. Fixed versus adjustable is a choice inside both options. A private bank can write a fixed term, and non-QM programs come in adjustable versions. The real decision is the bundle: who qualifies you, what they review, and what they ask you to commit to.
Side-by-Side
| Factor | Private Bank ARM (industry norms) | Non-QM Fixed (network programs) |
|---|---|---|
| Review basis | Whole balance sheet and relationship | Deposits, assets or property rent |
| Documentation | Traditional personal-income documentation, statements, liquidity | 12 or 24 months of statements, or rent |
| Property types | Bank discretion, exception-style | Warrantable, non-warrantable, condotel tiers |
| Building review | Banker decides case by case | Category sets leverage cap and overlays |
| Entity vesting | Bank-specific, guaranty common | Varies by program, guaranty expected |
| Reserves | Often tied to assets held at the bank | 3, 6 or 9 months by loan size |
| Credit | Bank-specific | 660, 680 or 700 floor by program |
| Best for | Deep liquidity, one-bank relationship | Complex income, long fixed hold |
The right column reflects what select wholesale programs offer, subject to full underwriting. Nothing here is a commitment to lend. Reserves of 3 months apply to loans to $500,000, 6 months to $1,500,000 and 9 months above, on the bank statement path. Credit floors are 660 on the portfolio non-QM program, 680 on the bank portfolio program and 700 above the super-jumbo line.
What Makes a Luxury Condo Non-Warrantable?
That is the only place agency rules matter here. Private banks and non-QM programs write their own rules, so the label tells you which loans you cannot use, not which ones you can. Fannie Mae’s Selling Guide sets the project-level tests that produce the label, including limits on commercial space and hotel-style operation.
Common triggers include:
- A high share of investor-owned units.
- Thin HOA reserves.
- Pending litigation.
- Commercial space in the building.
- Hotel-style operations, which put the project in the condotel category.
Luxury buildings hit these more often than buyers expect. Amenity-heavy towers carry large budgets, and some include rental programs or commercial floors. Not every defect weighs the same. High investor concentration may matter little to a non-QM reviewer. Structural problems, critical repairs, mandatory rental pools and serious HOA delinquency matter a lot, whoever holds the loan.
Ask the association for its budget, reserve study, litigation status and insurance details before you make an offer. Your lender will ask for them anyway. Learning the answers early also tells you which category the building lands in.
When the Private Bank ARM Is the Better Fit
A private bank ARM is the better fit when your balance sheet is the strongest thing on the file. A bank that holds the loan can weigh your liquidity, net worth and deposits, then make a judgment call on an unusual building. Agency rules do not apply, so the banker is free to say yes to a project a checklist would reject.
This path suits several borrowers:
- The asset-heavy borrower with clean statements. If your income is simple and well documented, a bank can underwrite you as a whole.
- The owner-occupant. A condo you will live in often belongs with a bank or a consumer program, not an investor product.
- The short holder. If you plan to sell or refinance well inside the fixed window, the reset may never reach you.
- The borrower who wants one relationship. Some people value one banker who knows every account.
Pledged securities are a common feature. A bank may accept them in place of a cash down payment. Pledged assets are often left out of the reserve count, so one pile of money cannot do both jobs. A sharp market drop can also trigger a margin call, so a pledge adds a risk that has nothing to do with the building.
Then comes the ARM itself. The CFPB explains that an ARM’s rate after the initial period is an index plus a margin, subject to caps. A private bank note can differ from consumer-guide norms, so the signed note governs.
What Happens When the ARM Resets?
Reset risk is the real cost of the ARM structure. It never shows up on day one, and that is why it gets underestimated. Run the reset against rent or personal cash flow, using the actual terms in the note.
Picture the same condo held two ways. In a five-year hold, you may sell or refinance before the first adjustment, so the ARM may never reset on you. In a ten-year hold, you will live through at least one adjustment, and probably several.
Now add three rate paths. If rates stay flat, the ARM resets near where it started. If they rise, the payment climbs by whatever the caps allow. If they fall, the benefit may be limited by a floor, so you do not always capture the full drop.
A fixed loan removes that variable. It does not remove all risk, because you still carry prepayment terms, which are the fees or step-downs some loans charge for paying off early. Ask about them on either structure.
Stress-test any rental with conservative rent, insurance, maintenance and vacancy assumptions. That habit fits the ARM decision well. If the numbers only work on the day the loan starts, the structure is carrying more risk than the property.
When the Non-QM Fixed Is the Better Fit
A non-QM fixed loan is the better fit when your income is hard to show on a tax return, or when you want a payment structure that holds still. Traditional personal-income documentation often understates what a founder, physician, attorney or athlete actually earns. Non-QM programs look at the money moving through your accounts instead.
A non-QM program reviews the file on documented income under the applicable program, subject to lender guidelines. Across our wholesale network, the main paths are:
- Bank statements. Programs use 12 or 24 consecutive months of personal or business statements. Business statements need at least 25% ownership. Qualifying income is eligible deposits divided by the statement months, after an expense ratio.
- Transfers from your own business. Transfers from the borrower’s business into a personal account count in full.
- Assets. An asset allowance divides liquid assets by 36, 60 or 84 months. An assets-only path needs liquid assets equal to the loan plus closing costs. Both are for primary and second homes. Retirement accounts count at 70%, or 80% at age 59.5 and up.
- Property cash flow. On an investment condo, a DSCR program qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Our complete DSCR loans guide explains how that ratio works.
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. Credit to acquire non-owner-occupied rental property is generally treated as business-purpose credit.
On a luxury condo, HOA dues sit inside the payment in the coverage math. A building with high dues can pull the ratio down even when rent is strong. Select lenders in the network review coverage below 1.00, but leverage and terms adjust. 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.
Entity vesting varies. Many programs let you hold title in an LLC and still expect a personal guaranty from the members, depending on program guidelines. Titling in an LLC does not remove your personal exposure.
Fixed versus adjustable exists here too. Some of our programs run as adjustables with fixed periods of five, seven or ten years. A ten-year version fully amortizes, and the five- and seven-year bank program files carry interest-only options. Fixed terms are available too. Compare the full structure before you assume any non-QM loan is fixed.
What Does the Size Ladder Do to Leverage?
Leverage on a luxury condo is set by two things at once: the condo’s category and the loan size. The condo cap sets the ceiling for the building. The size ladder sets the ceiling for the balance. The tighter one typically controls.
On the building side, through select wholesale programs, non-warrantable condos run to 80% LTV and warrantable condos to 85%. A condotel runs to 75% on a purchase and 65% on a cash-out, and 50% on the bank program. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
On the size side, every figure is a ceiling subject to underwriting. Take an investment property on a purchase:
- $2,000,000 to $2,500,000: 80%.
- $2,500,000 to $3,000,000: 75%.
- $3,000,000 to $3,500,000: 60% on the bank portfolio program.
A primary residence on a purchase gets a different ladder. From $3,000,000 to $3,500,000 it runs to 75%. A second home takes its own ladder, so read each figure from the occupancy that applies to you. Never subtract from the primary figure to guess.
Credit works the same way, band by band. On an investment property, the top leverage cell in the $2,000,000 to $3,000,000 bands needs a score of 720 or higher. That is what the top cell needs, not a program floor, and a lower score takes a lower leverage cell inside the same band. The bank portfolio program keeps its own 680 floor at every size. Above $3,500,000 on a primary residence, and $3,000,000 on a second home or investment property, super-jumbo overlays apply. They include a 700 credit floor, a clean recent housing history, U.S. citizenship or permanent residency, and cash-out proceeds that cannot count toward reserves.
Above $4,000,000, everything is reviewed case by case before submission. That applies to this ladder, the condo caps and any private bank offer alike.
Where Each Option Has Blind Spots
Private banks have a size advantage at the top. The bank portfolio program in our network carries twelve-month-statement files to $30,000,000, on a ladder that starts above $4,000,000. A private bank may reach even further, and for a very large balance it may be the only path. A bank can also take a building a program would decline.
Private banks also have an asking price in conditions. Deposits, pledged assets and cross-selling are how many of them earn their return. Those conditions have a cost, and you should count it.
Non-QM programs have their own limits. They publish overlays, so a building with active structural problems may fall outside every category. DSCR is investment-only. A condo you will occupy needs a different product. And cash-out has its own boundaries. Cash-out is unlimited at or below 60% LTV, with a $1,500,000 cash-in-hand cap above that on the portfolio program and no published cap on the bank program. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Exit and Resale
Non-warrantable status shrinks your future buyer pool. A buyer needs a lender willing to finance the unit, and fewer lenders do. That affects resale price and timing, whichever loan you pick.
The ARM adds a second clock. If your reset date lands in a thin resale market, you may sell under pressure or refinance into a narrower field. A fixed term gives you more control over when you go to market.
The building can also change category. A cured lawsuit or a rebuilt reserve may make it warrantable later. A short ARM followed by a refinance is a real strategy for that case, but it bets on an outcome you do not control. Do not choose a structure that only works if the building improves.
Tax treatment can depend on how the funds are used and how the property is held; borrowers should keep clear records and speak with a qualified tax professional before relying on any deduction.
The Balanced Verdict
Choose the private bank ARM if your finances are simple, your liquidity is deep and you value one institution that can make a judgment call on the building. Make sure you can live with the reset in a ten-year hold, and price the asset conditions honestly.
Choose the non-QM fixed structure if your income is complex, your traditional income documentation understates you or you plan to hold long enough that a reset matters. Accept that the building will be sorted into a category with its own caps.
Choose neither if the building has serious structural or legal problems. Paying cash, picking another building or waiting is a real answer, and a good broker will say so. Before you decide, get two written term sheets for the same unit and compare the whole bundle, not one feature.
Frequently Asked Questions
Do I have to move my assets to a private bank to get the loan?
Often, but not always. Many private banks tie their best terms to deposits or investments held with them. Terms differ bank by bank, so get the condition in writing. A non-QM loan does not require you to move accounts, though it will verify liquidity and reserves.
Can a private bank offer a fixed term instead of an ARM?
Yes, a bank can write either structure. Banks that hold loans on their own balance sheet often lean adjustable, because it limits their exposure to rate swings. Ask for the fixed version alongside the ARM and compare the full terms on each.
What if the building becomes warrantable after I buy?
The label can change, and a cured lawsuit or rebuilt reserve is the usual reason. A refinance into a broader loan field may open up. That is an upside, not a plan, so choose a structure that works if the status stays the same.
Can I buy the condo in an LLC?
Many programs allow it, depending on program guidelines. Expect the lender to ask for a personal guaranty from the members. A private bank treats entity vesting its own way, so confirm it before you sign a contract.
Can I use a non-QM loan if I plan to live in the condo?
Sometimes, on the right program. Primary and second homes are eligible for bank statement and asset paths, though a DSCR loan is investment-only. Consumer mortgage lending through Lendmire is licensed in 16 states: AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA and WA.
Next Step
If you are financing a high-balance property on business or personal bank statements and want to see how the numbers work, Lendmire can help you compare super jumbo bank statement loan options based on your deposits, the property, credit profile, leverage, and your goals. Reach the team at 828-256-2183.
A luxury tower with a lawsuit pending can look very different from one with a clean budget, and the right loan usually follows the building, not the other way around.
Lendmire’s self-employed mortgages page presents both super jumbo programs, bank statement and DSCR, side by side.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending partners for borrowers whose traditional income documentation understates their income, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Selling Guide B4-2.1-03, ineligible projects
2. CFPB, how an ARM’s index and margin work
This article is part of Lendmire’s super jumbo bank statement loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How Much Non-QM vs Portfolio Lenders Lend on a Non-Warrantable Luxury Condo · How Low Appraisal Options Work for a Non-Warrantable Super Jumbo Condo · How a Bank Statement Loan Works as a Private Wealth Mortgage Alternative
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.