At a Glance: Non-warrantable condos and condotels can still be financed through portfolio or non-QM bank-statement programs, but the loan faces two separate leverage ceilings — one set by the building’s status and one by loan size and occupancy — and whichever ceiling is lower typically governs the deal, subject to lender guidelines.
- Non-warrantable status describes the building (litigation, thin reserves, investor concentration, commercial space, or hotel-style operation), not the borrower’s file.
- Bank statement programs qualify income off 12 or 24 months of deposits, applying an expense ratio (typically 20%–50%) to business account income while personal deposits and business-to-personal transfers generally count at full value.
- Non-warrantable condos are typically reviewable to 80% loan-to-value through select wholesale lenders, versus 85% for a warrantable unit.
- Condotels are a separate category from non-warrantable condos, typically capped at 75% purchase and 65% cash-out, and lower still (around 50%) on some bank portfolio programs. – “Super jumbo” has no fixed government definition, but files above roughly $3,500,000–$4,000,000 typically move to case-by-case review with tighter overlays like a 700 credit floor and 48 months of seasoning on credit events.
That doesn’t mean the unit is unfinanceable — it means agency financing is off the table, and the loan moves to a portfolio or non-QM program instead. Pair that with bank statement income (qualifying off deposits instead of traditional personal-income documentation) and a loan size north of $1,000,000, and you’re now stacking three separate underwriting questions that each have their own answer. This piece walks through all three, one at a time, so the mechanics stop feeling like a black box.
What You Need to Know First
- Non-warrantable status is about the building, not the borrower — a strong bank-statement file can still get blocked if the project fails review.
- Bank statement programs qualify self-employed borrowers off 12 or 24 months of deposits, not traditional personal-income documentation, with an expense ratio applied to business account income.
- Leverage on a super jumbo file steps down as the loan size climbs, and non-warrantable or condotel status pushes that ceiling lower still. – “Super jumbo” has no government definition. It’s a lender convention, and the practical line where files start getting reviewed case by case tends to fall above $3,500,000 to $4,000,000.
- Condotels are their own category with their own leverage ceiling — they’re not just a harder version of non-warrantable.
What Makes a Condo Non-Warrantable?
Fannie Mae’s own selling guide spells this out at the project level. Buildings become ineligible for agency purchase if they require mandatory third-party recreational memberships, face active litigation tied to safety or structural soundness, or have ownership concentrated too heavily in one entity. See the Fannie Mae Selling Guide’s ineligible projects section for details.
The most common triggers investors run into are:
- Single-entity concentration — one owner or investor group holding more than 20% of units in an established project.
- Litigation — anything involving the HOA and touching structural integrity, habitability, or safety.
- Thin reserves or high delinquency — an HOA that isn’t funding its reserve account or is chasing unpaid dues from a large share of owners.
- Heavy commercial space — buildings where ground-floor retail or office space eats up too much of the total square footage.
- Hotel-style operation — a rental desk, daily housekeeping, or short-term booking through the building itself (this is the condotel category, covered below).
- New or newly converted projects that haven’t hit a sufficient presale threshold yet.
Fannie Mae reviews all of this through its Condo Project Manager tool and, for higher-risk project types like newly converted buildings over four units, a full Project Eligibility Review Service submission — a heavier lift than the standard lender-delegated path, according to Fannie Mae’s Condo Project Manager guidance. None of this machinery actually governs a non-QM or bank-statement file, since those loans are never sold to the agencies in the first place. But it’s still the shared vocabulary the industry uses to describe why a building got flagged — which is exactly what a portfolio underwriter is screening for on their own paper.
Market surveys report non-warrantable financing generally requiring larger down payments, sometimes cited in the 15% to 30% range depending on the source. Through select lenders in Lendmire’s wholesale network, non-warrantable condos are reviewable to 80% loan-to-value, compared with 85% for a warrantable unit — a five-point gap, not a wholesale reset of the deal.
Key Terms Defined
Non-warrantable condo — a condo project that fails one or more of those agency rules, which routes the loan to a portfolio or non-QM lender instead.
Bank statement loan — a loan that qualifies a self-employed borrower’s income from bank deposits over 12 or 24 months, instead of traditional personal-income documentation.
Expense ratio — the percentage of a business’s deposits assumed to cover operating costs before the rest counts as qualifying income.
Super jumbo — an informal, lender-defined tier for loan sizes well above standard jumbo limits, with no fixed government threshold.
Condotel — a condo unit operated like a hotel room, with a rental desk, short-term bookings, or centralized housekeeping, which puts it in its own financing category separate from a standard non-warrantable building.
How Bank Statement Income Actually Gets Calculated
Bank statement income isn’t a guess — it’s a formula run against real deposit history, with an expense ratio standing in for the tax deductions a self-employed borrower’s return would otherwise show. Through select wholesale programs, a lender pulls 12 or 24 consecutive months of statements, adds up eligible deposits, strips out transfers and one-time items, and divides by the number of months.
On a business account, an expense ratio gets applied before that number becomes qualifying income. Across the programs Lendmire places files with, that ratio typically scales with staffing and business type — lower for a service business with no employees, moderate for a small team, and higher for larger staffs or product-based businesses, with exact tiers varying by lender. An accountant-provided ratio can replace the fixed default, and a profit-and-loss method, capped at 80%, is also an option on some files. This is where a CPA letter for a super jumbo file can genuinely change the number — a documented, lower ratio from an accountant can move qualifying income up when the default expense ratio undersells a lean-overhead business.
One detail that surprises a lot of business owners: transfers from the borrower’s own business into a personal account count at full value, not at a discount. Personal account deposits are generally treated the same way — no expense haircut applied. That’s a real advantage over a W-2 file, where every dollar of income has already been taxed and reported before it ever hits underwriting.
Statement completeness matters mechanically, not just as a formality. Every page, every month, consecutive — a single missing statement page can stall a file. This is one of the more common paper-cut delays on bank-statement underwriting, and it has nothing to do with the borrower’s actual income.
The Two Ceilings: Property Type and Loan Size Stack
A non-warrantable condo purchased with bank-statement income at a super jumbo size doesn’t hit one leverage cap — it hits two, and the lower one wins. The first ceiling is set by the property itself: warrantable, non-warrantable, or condotel. The second is set by loan size and occupancy, and it steps down as the loan gets bigger regardless of what kind of condo it is.
On a primary residence, through select wholesale programs, leverage runs as high as 90% purchase at the $300,000 to $1,000,000 tier, steps to 85% between $1,000,000 and $2,000,000, down to 80% between $2,000,000 and $3,000,000, and 75% between $3,000,000 and $4,000,000 — all subject to underwriting and credit-tier minimums that rise alongside the loan size. Above $4,000,000, every file moves to case-by-case review before it’s even submitted, with leverage generally settling in the 60% to 65% range through $6,000,000.
Now layer a non-warrantable condo onto that same ladder. Say a borrower is buying a $2,200,000 unit as a primary residence in a building with an investor-concentration flag. The size ceiling at that tier already caps purchase leverage at 80%. The non-warrantable property ceiling is also 80%. In this case the two ceilings land in the same place, so the deal isn’t punished twice — but push that same building past $3,000,000 and the size ceiling drops to 75% while the property ceiling stays at 80%, and now the size ceiling is the one that governs. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Second homes and investment properties run roughly five points lower than primary residence at every tier through this same ladder. An investment-property purchase between $1,500,000 and $2,000,000, for example, tops out at 80% versus 85% for a primary residence at that size — the market treats non-owner-occupied risk as structurally higher regardless of the building.
| Occupancy | $1M–$1.5M purchase | $2M–$2.5M purchase | $3.5M–$4M purchase |
|---|---|---|---|
| Primary residence | 85% | 80% | 75% |
| Second home | 80% | 80% | 65% |
| Investment property | 80% | 80% | 60% |
That table only reflects the size-and-occupancy ceiling. A non-warrantable or condotel classification can still pull leverage lower on top of it — the two never cancel each other out, and the file gets the more conservative of the two every time.
Where the Super Jumbo Line Actually Sits
No regulator defines “super jumbo.” Each year, the Federal Housing Finance Agency sets the baseline conforming loan limit. This is the figure used to measure jumbo status. But once a loan goes well past that number, each lender draws its own internal line for when extra scrutiny kicks in. These lines don’t match from one program to the next.
Through Lendmire’s wholesale network, that practical line sits above $3,500,000 to $4,000,000 on a primary residence and above $3,000,000 on a second home or investment property. Above those marks, files move through full case-by-case review before submission, and overlays tighten meaningfully: a 700 credit floor, a clean housing-payment history, 48 months of seasoning on any prior credit event, U.S. citizenship or permanent residency, no non-occupant co-borrowers, and no rural property beyond ten acres. Cash-out proceeds also can’t be used to satisfy reserve requirements at this tier — reserves have to come from assets the borrower already holds separately. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Loan size at the very top end runs through two separate wholesale programs rather than one continuous ladder. A portfolio non-QM program carries bank-statement files to $6,000,000. A separate bank portfolio program, using 12-month statements, carries files to $30,000,000 on its own step-down ladder — 65% through $5,000,000, 60% through $10,000,000, and 55% through $30,000,000, with interest-only capped at 60% or the tier’s ceiling, whichever is lower. The two programs overlap between $4,000,000 and $6,000,000, which is exactly the range where shopping both matters — one program’s overlay can be meaningfully easier to clear than the other’s on the same file.
Condotels Are Not Just a Harder Non-Warrantable Condo
People constantly lump condotels in with non-warrantable condos. But condotels are a separate collateral category with their own ceiling, not a subset. A condotel operates like a hotel room — it has a rental desk, short-term bookings, and centralized housekeeping. Fannie Mae’s own guidelines rule these out entirely, no matter how healthy the HOA’s finances are.
Income on a condotel is seasonal and depends on the hotel operator. So a standard rent schedule doesn’t map cleanly onto it. Appraisers can’t just multiply a nightly rate by 30 and call it a monthly rent figure. That approach ignores vacancy, personal property, and the operator’s cut. It produces an inflated number that underwriting won’t accept at face value.
Through select wholesale programs, condotels are reviewable to 75% loan-to-value on a purchase and 65% on cash-out. The bank portfolio program caps condotels at 50% instead. That’s a meaningfully lower ceiling than the 80% available on a standard non-warrantable building. This is exactly why treating “condotel” and “non-warrantable” as interchangeable leads to bad expectations going into underwriting. A ski-town or beach-market condotel purchase needs its financing conversation reset around this separate ceiling, not around the general non-warrantable rules.
A Non-Warrantable File Isn’t a Permanent Verdict
Here’s the part that gets missed most often: non-warrantable status describes a building’s condition today, not a fixed flaw. Reserves can rebuild. Litigation resolves. An investor-heavy building can shift back toward owner-occupancy over time. None of that is guaranteed on any particular timeline, but it does mean a borrower buying into a currently non-warrantable project isn’t locked into that classification forever.
That has practical implications for how an investor structures the purchase. Buying now on a portfolio or bank-statement program, with the intention of revisiting terms once the HOA resolves its issue, is a real strategy some investors run deliberately — not a workaround, just a sequencing decision. It’s worth reviewing the warrantable condo leverage rules on a super jumbo side by side with the non-warrantable ceiling to understand exactly what changes if the building’s status flips.
Lendmire has structured many files through its wholesale network. Across these files, the buildings that clear this path fastest tend to be ones where the underlying issue is financial — a reserve shortfall or delinquency spike — rather than structural, like active litigation over habitability. A financial fix is something an HOA board can act on directly. A litigation resolution runs on its own timeline that no borrower controls.
Why Sophisticated Investors a large national bank This Deal. Instead of Avoiding It
Non-warrantable units in a given building often sell below identical warrantable units nearby. This gap exists purely because agency financing is closed off, not because of anything wrong with the unit itself. That price gap is the entire investment thesis for a certain type of buyer: find a unit priced for financing friction, finance it through a portfolio or bank-statement program, and hold it while the building’s status potentially resolves.
This only works when the numbers on both ends check out — the bank-statement income clears at whatever expense ratio applies, and the property-type ceiling doesn’t force so much extra cash into the deal that the discount gets erased. Comparing bank-statement qualification against a rental-income-based DSCR loan is worth doing here too, since an investor with strong personal cash flow and an investor buying purely on the property’s rental income can land on very different programs for the same building.
Frequently Asked Questions
Does non-warrantable mean my loan gets denied? No — it means agency financing is closed, which routes the loan to a portfolio or non-QM program instead. Through select lenders in Lendmire’s wholesale network, non-warrantable condos are reviewable to 80% loan-to-value, subject to full underwriting and credit approval.
Can a non-warrantable building become warrantable later? Yes, if the underlying issue is fixable — reserves rebuild, delinquency drops, or litigation resolves. There’s no guaranteed timeline, and status can also move the other direction if a building’s finances deteriorate.
How is bank statement income different from a tax-return income calculation? Bank statement income is built from actual deposits over 12 or 24 months rather than net income reported on a return, with an expense ratio applied to business account deposits. Personal deposits and transfers from the borrower’s own business generally count without that haircut, which often produces a higher coverage figure for self-employed borrowers whose returns show heavy deductions.
Is a condotel treated the same as a non-warrantable condo? No. Condotels are their own collateral category with a lower ceiling — typically 75% purchase and 65% cash-out through select wholesale programs, versus 80% for a standard non-warrantable building — because hotel-style rental income doesn’t map onto a standard rent schedule the way a long-term lease does.
What happens above $4,000,000 on one of these files? Every loan above that size moves to case-by-case review before submission, with tighter overlays including a 700 credit floor, 48 months of seasoning on any credit event, and no non-occupant co-borrowers. Leverage on a primary residence in that range typically runs in the 60% to 65% band, subject to full underwriting.
If you’re weighing a non-warrantable or condotel purchase against a bank-statement or asset-based path, Lendmire can help compare the loan-size ladder, the property-type ceiling, and the documentation route that fits how your income actually shows up.
For current guidelines and terms, see Lendmire’s super jumbo bank statement loan programs page.
Self-employed borrowers can compare both super jumbo programs on Lendmire’s self-employed mortgages page.
About Lendmire
Lendmire is a non-QM mortgage brokerage (NMLS# 2371349) arranging DSCR investor loans in 40 markets, including Washington, D.C. DSCR eligibility is generally reviewed around property-level rental income rather than personal income, subject to lender and program guidelines, a fit for self-employed investors and LLC-owned portfolios. Lendmire was recognized as a Scotsman Guide Top Mortgage Workplace in 2025 and 2026.
Lendmire’s Top Mortgage Workplace recognition is documented by Scotsman Guide 2025 Top Mortgage Workplace and Scotsman Guide 2026 Top Mortgage Workplace.
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References
1. Fannie Mae Selling Guide — Ineligible Projects
2. Fannie Mae — Condo Project Manager (CPM)
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.
