The Quick Read: Your down payment on a non-warrantable condo is the equity left after the stricter of two leverage ceilings, the one tied to your loan size and occupancy and the one tied to the building, while your bank statement deposits mainly decide whether the income side of the file clears. Through select wholesale programs, subject to full underwriting, the building alone typically caps a non-warrantable condo purchase at 80% leverage, which means at least 20% down before closing costs and reserves. Nothing here is a commitment to lend.
- Non-warrantable is a label for the building, not a judgment of your credit or income.
- Bank statements (12 or 24 months of deposits) set your qualifying income, not the equity the property needs.
- At larger loan sizes, the loan-size ladder often asks for more equity than the building cap does.
- Reserves are a second cash requirement on top of the down payment.
- Above $4,000,000, every file is reviewed case by case before submission.
What Makes a Condo Non-Warrantable?
A condo is non-warrantable when the building fails the project rules that conventional lenders use. That is a fact about the project. It says nothing about you.
Founders often assume the label follows the borrower. It does not. A founder with strong deposits can still hit a project that triggers an overlay, and a modest file can buy in a clean building with no issue at all.
The reason a building is flagged matters more than the flag. A building with many investor-owned units is a different risk than a building in structural litigation. Lenders in the network treat them differently, and so should you when you price the deal.
| Building feature | How it can affect financing | What to ask the HOA |
|---|---|---|
| High investor-owned share | Lower leverage or case-by-case review | Owner versus investor unit count |
| One owner holds many units | Concentration overlay | Units held by any single entity |
| Active litigation | Can block the loan outright | Nature, status and repair cost |
| Thin reserves or high delinquency | Flags budget weakness | Reserve study, dues past due |
| Commercial space or hotel features | Often reviewed as a condotel | Rental pool, front desk, commercial share |
| Special assessments | Raises cost and lender concern | Amount, purpose, payoff schedule |
Litigation deserves extra weight. When the repair scope has no defined dollar amount, many lenders will not move forward at any down payment. That is the case where more equity does not fix the problem.
Key Terms Defined
Non-warrantable condo: a condo in a building that fails the standard project rules for conventional loans, so the loan stays with a portfolio or non-QM lender.
Warrantable condo: a condo in a building that meets those standard project rules.
Bank statement loan: a mortgage that is reviewed around deposits in your personal or business accounts instead of traditional personal-income documentation, subject to lender guidelines.
Expense ratio: the share of business deposits the lender treats as operating costs rather than income.
Loan-to-value (LTV): the loan amount divided by the purchase price or appraised value, whichever the program uses.
Reserves: liquid money you hold after closing, counted in months of your housing obligation.
Condotel: a condo in a building run like a hotel, often with a rental pool or front desk.
Source of funds: the paper trail showing where your down payment came from.
How the Down Payment Is Calculated
Down payment is the complement of the maximum LTV. If the controlling ceiling is 80%, the minimum equity is 20% of the price, plus closing costs and reserves. Two ceilings apply, and the stricter one wins.
The first ceiling comes from the loan size and occupancy ladder. Through select wholesale programs, subject to full underwriting, a primary-residence purchase can reach 90% up to $1,000,000, 85% up to $2,000,000, 80% up to $3,000,000, and 75% at the top credit tier up to $4,000,000. Second homes and investment properties follow their own ladders, which sit lower at several sizes. Above $4,000,000, every figure is reviewed case by case before submission.
The second ceiling comes from the building. A warrantable condo can reach 85% on the property side. A non-warrantable one is typically capped at 80%. Condotels sit lower, which the section on where the general rule breaks covers.
So the building cap bites at smaller sizes, and the loan-size ladder bites at larger ones. Here is how that plays out.
| Scenario (purchase) | Size ladder ceiling | Building cap | Controls |
|---|---|---|---|
| Primary, $900,000 | 90% | 80% | Building: 20% down |
| Second home, $2,800,000 | 75% | 80% | Size ladder: 25% down |
| Investment, $3,200,000 | 60% | 80% | Size ladder: 40% down |
Read the first row this way. On a primary-residence purchase near $900,000, the size ladder allows 90% at a 680 credit score or better. The non-warrantable cap pulls that to 80%. Your deposits do not change it. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
In the second row, a second-home purchase near $2,800,000 sits in a band where the ladder tops out at 75% for a 720 score or better. That is already under the 80% building cap, so the ladder sets the equity.
In the third row, an investment-property purchase near $3,200,000 lands in a band where the bank portfolio program takes over at 60%. Super-jumbo overlays also apply above $3,000,000 on a second home or investment property. They include a 700 credit floor, a 0x30x24 housing history, 48 months of seasoning after any credit event, and no rural property. Those are scenario illustrations, not offers.
One more point on credit. The credit score listed beside each band is what that band’s top leverage needs. It is not a program floor. A lower score usually means a lower leverage cell inside the same band.
How Bank Statements Turn Into Income for a Founder
Bank statement underwriting totals your eligible deposits, applies an expense ratio, and divides by the number of months. Across the wholesale network, you can choose 12 or 24 consecutive months of personal or business statements. The bank portfolio program uses 12.
For business statements, you need at least 25% ownership. The expense ratio is usually fixed by business type:
- A lower fixed ratio for a service business with no employees.
- A higher fixed ratio for a business with one to five employees.
- The highest fixed ratio for a business with six or more employees, or any product business.
- An accountant-provided ratio, where the program allows one.
A profit-and-loss method also exists, capped at 80%. Tax treatment varies; consult a qualified professional before relying on any deduction.
Transfers from your own business into your personal account count at 100%. That makes your transfer pattern a planning tool. A founder who pays themselves through regular transfers shows income cleanly.
Ownership share is the swing factor for partners. A 100% owner and a 30% partner with identical deposits qualify very differently. Statements must be consecutive, and transaction histories never substitute for them.
Uneven deposits are normal for founders. Averaging over 24 months can smooth a lumpy year, while 12 months can favor a strong recent run. One-time credits, such as transfers between your own accounts or a loan, are typically stripped out as non-income.
Then the income is tested against debt-to-income, which can reach 50% through select programs. Credit floors are 660 on the portfolio program, 680 on the bank portfolio program, and 700 above the super-jumbo line. Here is the point that trips founders up. Income decides whether your ratio clears and how much loan you can carry. It does not raise the leverage cap the building sets.
Other Income Paths for Founders
Some founders have thin deposits but large liquid assets. Two asset-based paths exist for primary and second homes. These are the asset allowance and assets-only paths.
The asset allowance divides liquid assets by 36, 60 or 84 months to create qualifying income. The 36-month divisor applies when your debt-to-income before the asset income is at or below 60%. The 60-month divisor applies when it is above 60%. The 84-month divisor applies to standalone use or any loan above $3,500,000. The final ratio, with the asset income counted, must still fit the 50% ceiling. The allowance maxes out at 80% leverage. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Assets-only qualifies with no debt-to-income test when your U.S. liquid assets equal the loan amount plus closing costs plus sixty months of any net loss on other residential property. Retirement accounts count at 70%, or 80% at age 59.5 and older. Business funds, gifts, trusts other than a revocable living trust, unvested stock and cryptocurrency never count toward these paths.
If you are buying the condo as a rental, a third path exists. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines, and it carries its own condo rules and leverage. Our complete DSCR loans guide walks through it. Scotsman Guide has noted that each DSCR lender sets its own condo rules, and that appetite for non-warrantable projects depends partly on how the lender sources capital. HOA dues sit inside the housing payment, so a high-dues building weakens rental coverage.
Where the Down Payment Money Can Come From
Lenders want a paper trail for every large dollar. Plan to document the source of your down payment and your reserves, not just the balance.
A checklist for founders:
- Statements for the accounts holding the funds.
- A sale or distribution record if proceeds came from a secondary sale or business payout.
- The purchase contract and the HOA package: questionnaire, budget, reserve study and insurance certificate.
- Ownership proof for business statements, such as an operating agreement, a K-1 or an accountant letter.
- An accountant letter if you seek a custom expense ratio.
A big deposit that lands right before you apply invites questions. If it comes from selling shares or a business distribution, keep the documents showing where it came from. Gift money is its own subject, and the details differ by occupancy. Lendmire’s piece How to Use Gift Funds for a Second-Home Down Payment on Bank Statements covers it.
Reserves are the second cash need, and founders often forget them. Through select programs, they run 3 months up to $500,000, 6 months up to $1,500,000, and 9 months above that. Add 2 months for each additional financed property, to a 12-month maximum. First-time investors typically need 12 months. Above the super-jumbo line, cash-out proceeds cannot satisfy reserves.
Where the General Rule Breaks
The 80% building cap is a starting point. Several situations move it.
Condotels. A condotel purchase is typically capped at 75%, and a condotel cash-out at 65%. On the bank portfolio program, the cash-out cap is 50%. 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.
Occupancy. A primary residence generally gets the highest ladder, a second home a lower one, and an investment property its own. Second homes must be one-unit properties. Take each figure from that occupancy’s own ladder, not from the primary-residence numbers.
Building-level problems. Hotel-style features, commercial space or unresolved litigation can cut the cap or end the deal. No down payment fixes a building a lender will not touch.
Partner ownership. Under 25% ownership, business statements are off the table. Between 25% and 100%, your share matters.
Status changes. A building can drift in or out of non-warrantable status as litigation resolves, reserves rebuild or investors sell. A condo that is warrantable at purchase can become non-warrantable later, which narrows your exit and refinance options.
Size. The ladder’s best cell can step up again where the bank portfolio program takes over, then step down as the loan grows. Above $4,000,000, everything is case by case.
What About the Agency Rule Change?
Older articles say a building is non-warrantable once investors own more than half the units. That is stale for conventional loans. Fannie Mae’s lender letter on condo project standards retired its 50% investor concentration limit for established projects under full review on investor loans.
The Michigan Community Association Law Blog notes that individual lenders may keep their own concentration rules. It adds that single-investor limits stay in place, at no more than 2 units in projects of 5 to 20 units, and 20% of units in projects of 21 or more. Sandberg Phoenix reported the same retirement.
Treat that as contrast only. Bank statement loans are not agency products, so a building that clears conventional review may still face a lender-level overlay here. Always confirm the current status of the project before you assume anything.
What If the Numbers Do Not Work?
If the required equity is more than you want to commit, you have options.
- Choose a lower price or put more cash down.
- Pick a different building with fewer flags.
- Change occupancy, if the plan allows it, since ladders differ.
- Consider an asset path if deposits are thin but liquid assets are strong.
- Wait for litigation to resolve or reserves to rebuild.
- Run the DSCR route for a rental.
Think about exit as well. A non-warrantable project shrinks both the resale buyer pool and the refinance lender pool. If you may later pull equity, read Lendmire’s guide How to Cash-Out Refinance a Non-Warrantable Luxury Condo on Bank Statements. Price the equity and the exit together.
Preparing as a Founder
Timing matters because the statement window looks backward.
Before a raise. Start moving pay from the business to your personal account on a regular rhythm. Clean, consistent transfers count at 100% and make 12 or 24 months easy to read.
During a raise. Avoid reshuffling accounts. Large movements between accounts or unexplained deposits add questions. Keep business and personal money separate.
After an exit. Lump-sum proceeds are usually documented as a source of funds, not recurring income. If your deposits before the exit were modest, an asset path may fit better than statements.
Frequently Asked Questions
What is the minimum down payment on a non-warrantable condo?
Typically 20% on a purchase, because the building cap is usually 80% through select wholesale programs. Your loan size and occupancy can push it higher. For example, an investment purchase near $3,200,000 sits at 60% leverage, so 40% down. Everything is subject to full underwriting.
Does non-warrantable mean I cannot get financed?
No. It means the loan will not go to a conventional lender. Portfolio and non-QM programs still review these files. Some issues, like litigation with an undefined repair cost, can stop a deal. Others, like investor concentration, mostly affect leverage.
Can a big one-time deposit count as income?
Usually not. One-time credits such as sale proceeds are typically stripped out of income. They can still count as source of funds for your down payment and reserves, with documentation.
Can I use a conventional or agency-backed loan instead?
Generally no, for a project that fails the standard rules. That is the reason these loans sit with portfolio and non-QM lenders. Founders on bank statements are outside the conventional path anyway.
Is this available in every state?
No. Lendmire’s consumer mortgage lending is licensed in 16 states: AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA and WA. Programs change, and every file is underwritten individually.
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.
Lendmire’s self-employed mortgages page presents both super jumbo programs, bank statement and DSCR, side by side.
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
1. Scotsman Guide, Get in the Game
2. Fannie Mae, lender letter on condo project standards
3. Michigan Community Association Law Blog
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: Can an Owner in a New Field Use Bank Statements for a Super Jumbo Loan? · How Much Down Payment Does a Bank Statement Mortgage for High Earners Need? · Can You Refinance a Private Bank Mortgage With Bank Statements?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.