Asset Depletion Counts Portfolio Value Without Selling Positions — The Quick Read: Asset depletion is a mortgage qualification method that turns a borrower’s liquid holdings into a monthly “as-if” income figure, without requiring a single share or fund to be sold. A lender verifies account balances, applies a discount by asset type, then divides what’s left by a set number of months. That number stands in for a paycheck in the debt-to-income math. The brokerage account, IRA, or savings balance stays exactly where it is and keeps compounding.
This matters most to borrowers whose traditional personal-income documentation doesn’t reflect their actual wealth. Think retirees living off a portfolio, business owners between paydays after a sale, or investors whose income sits in appreciated stock rather than a W-2. It’s a non-QM underwriting path, meaning it sits outside the standard Qualified Mortgage framework. But the lender still has to make a documented, good-faith judgment that the borrower can repay the loan. Asset depletion is simply the tool used to make that judgment when there’s no paycheck to point to.
Key Terms Defined
Asset depletion is a method of counting verified liquid assets as qualifying income by dividing a discounted balance by a set number of months, instead of using pay stubs or traditional personal-income documentation.
Non-QM (non-Qualified Mortgage) describes loans underwritten outside the standard Qualified Mortgage rules, using alternative ways to document a borrower’s repayment-capacity.
Haircut is the percentage discount a lender applies to an asset’s face value before counting it — a way of pricing in volatility, taxes, or access restrictions.
Divisor is the number of months a lender uses to spread an asset balance into a monthly income figure. A shorter divisor produces a bigger monthly number from the same dollars; a longer one produces a smaller number.
LTV (loan-to-value) is the loan amount expressed as a percentage of the property’s value or purchase price — a lower LTV means more equity or down payment relative to the loan.
DTI (debt-to-income) is a borrower’s total monthly debt obligations divided by their qualifying monthly income, including the imputed income from asset depletion when that’s the qualifying method used.
Reserves are liquid funds a borrower must have left over after closing, expressed as a number of months of housing payment, to cover unexpected shortfalls.
How Does the Math Actually Work?
The short version: eligible assets minus what’s needed for closing, divided by a set number of months, equals qualifying monthly income. Nothing about that math requires a sale.
Step one is identifying which accounts are eligible — generally checking, savings, brokerage holdings in publicly traded securities, and vested retirement accounts. Step two applies a discount by asset class. This matters because not every dollar on a statement is equally accessible or equally safe to count at face value. Step three subtracts whatever is earmarked for the down payment, closing costs, and required post-closing reserves. That money can’t do double duty as both closing capital and ongoing income. Step four divides what remains by the divisor.
Through select lenders in Lendmire’s wholesale network, an asset-allowance path divides liquid assets by 36 months when the resulting income is supplemental and the borrower’s overall DTI comes in at or below 60%, by 60 months when it’s supplemental and DTI runs above 60%, or by 84 months when the asset income stands alone or the loan amount exceeds $3.5 million. That’s the network’s own structure — not a universal industry number — and it applies to primary residences and second homes, capped at 80% LTV. A separate assets-only path skips DTI altogether: the borrower simply needs U.S.-based liquid assets equal to the loan amount plus closing costs plus 60 months of any net loss on other residential real estate they own. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
The imputed monthly figure then drops into the same debt-to-income calculation a paycheck would use. The account itself is never required to be liquidated to produce it — that’s the mechanism the whole product is built around.
Which Assets Count, and at What Value?
| Asset Type | Counts Toward Qualifying Income? | Typical Treatment |
|---|---|---|
| Checking, savings, money market | Yes | Counted near face value after seasoning |
| Publicly traded stocks, bonds, mutual funds | Yes | Discounted for market volatility |
| Retirement accounts (IRA, 401(k)) | Yes, at a reduced rate | 70% of vested balance; 80% if borrower is 59½ or older |
| Business operating accounts | No | Excluded — commingled with business risk |
| Gifted or unseasoned funds | Generally no | Excluded unless properly sourced and seasoned |
| Trusts other than a revocable living trust | No | Excluded through most wholesale guidelines |
| Unvested stock, cryptocurrency | No | Excluded |
The pattern across the wholesale programs Lendmire places files with is consistent: an asset has to be verifiable, liquid or near-liquid, and not tangled up in a business or a vesting schedule. Anything that requires a long wait or a lawsuit to access generally doesn’t make the list.
Why Does Age 59½ Change the Math?
Retirement accounts get discounted more heavily below age 59½ because federal tax law penalizes early access, not because a lender arbitrarily decided older money is worth more. The IRS confirms that an early withdrawal from an IRA before age 59½ is included in gross income and subject to an additional 10% tax. That penalty is the reason a 401(k) or IRA balance held by a younger borrower is typically counted at 70% of its vested value, while the same account type held by a borrower who has already crossed 59½ is typically counted at 80%. The lender isn’t guessing at risk — it’s pricing in a real cost the borrower would face if forced to tap those funds early.
Why Not Just Sell and Buy With Cash?
Selling defeats the entire purpose of the structure. Liquidating appreciated stock or a mutual-fund position to generate cash or provable income usually triggers a taxable event and knocks the position out of the market at the exact moment it’s being sold to solve a housing problem, not because it was the right time to sell.
Asset depletion lets the same portfolio prove repayment capacity while staying fully invested. That’s the whole trade: the borrower keeps compounding, and the lender gets statements instead of a wire transfer. A lender still has a legal obligation to make a documented, good-faith determination that a borrower can repay the loan. The CFPB’s Ability-to-Repay/Qualified Mortgage rule puts that requirement into practice under the Truth in Lending Act. A non-QM asset-depletion loan doesn’t carry the legal-liability protections a Qualified Mortgage does. But the underlying duty to verify repayment ability doesn’t go away. It’s simply satisfied with account statements instead of a W-2.
Any margin balance or loan against a brokerage account reduces what counts before the depletion math runs. A lender is qualifying net accessible wealth, not the gross number on a statement.
How Big Can These Loans Get, and What Leverage Applies?
Through select wholesale programs, asset-depletion-qualified loans run from roughly $300,000 up to $30 million — but not on one leverage schedule. A portfolio non-QM program carries files to $6 million. A separate bank-portfolio program, built around 12 months of statements, carries its own files to $30 million on a size ladder that begins above $4 million and overlaps the portfolio program up to $6 million.
| Loan Size | Program | Typical Max LTV |
|---|---|---|
| $300K–$1M | Portfolio program | 90% purchase (primary residence) |
| $2M–$2.5M | Portfolio program | 80% purchase |
| $3M–$3.5M | Portfolio program | 75% purchase |
| $4M–$5M | Bank-portfolio ladder | 65%, reviewed case by case |
| $5M–$10M | Bank-portfolio ladder | 60% |
| $10M–$30M | Bank-portfolio ladder | 55% |
Every band above $4 million is reviewed case by case before submission — none of these figures should be treated as guaranteed, and outcomes remain subject to underwriting. Interest-only structures may be available up to 85% LTV with a 700 credit floor on the portfolio program, running as a 40-year term with a 10-year interest-only period; the bank program’s interest-only ceiling sits at 60%, and its interest-only pricing is capped at 60% or the band’s own ceiling, whichever is lower. Second homes and investment properties typically run leverage about five points lower than a primary residence at every size tier. Above $3.5 million on a primary residence, or $3 million on a second home or investment property, super-jumbo overlays can apply: a 700 credit floor, a clean 24-month housing-payment history, 48-month seasoning on any credit event, and cash-out proceeds that can’t be used to satisfy reserve requirements. Credit minimums typically run 660 on the portfolio program, 680 on the bank program, and 700 above the super-jumbo threshold, with debt-to-income considered up to 50% and reserves scaling from three months on smaller loans to nine months or more on larger ones.
Reading the guidelines from many lenders at once — which is what a broker does all day — makes one pattern obvious: no two programs discount retirement accounts, size their divisors, or set their leverage ceilings the same way. The gap between a 36-month divisor and an 84-month divisor on an identical portfolio can be the difference between a file that clears debt-to-income comfortably and one that doesn’t clear at all. That’s the value a wholesale-network broker adds — matching the borrower’s asset mix to the program whose math actually fits it.
Can Asset Depletion Help a Rental Property That Doesn’t Cash Flow?
Sometimes. Take a rental property that doesn’t quite generate enough rent to cover its own payment on paper. Some lenders in the wholesale network will consider a borrower’s liquid assets as a supplement to the rental income calculation — but not as a replacement for it. Leverage and terms adjust when that happens. This is a different animal than a straightforward home-purchase asset-depletion loan: here, asset strength patches a coverage gap, rather than serving as the sole basis for the file.
Most DSCR — debt-service-coverage-ratio — programs qualify a rental property mainly on its own rental income covering the payment. This is subject to lender guidelines. That stays true whether or not asset depletion enters the picture. Investors who want the fuller mechanics of that qualification path can review Lendmire’s complete DSCR loans guide. Some investors specifically weigh whether to stay invested rather than sell down a portfolio to force a deal to work. For them, Lendmire’s breakdown on staying invested while qualifying on asset depletion walks through that trade-off directly.
Common Misconceptions
- “The lender will make me spend down my portfolio.” Generally the opposite is true. Liquidation is typically required only for the specific cash needed at closing — the down payment, costs, and reserves — not for the imputed income calculation itself.
- “Every asset counts at full value.” Retirement funds and marketable securities are commonly counted at a percentage of their statement value, not 100%, and the exact percentage is program-specific.
- “This is only for retirees.” Retirees are the most commonly cited use case, but business owners between exits, self-employed borrowers with low taxable income, and investors living off portfolio growth all fit the same lane.
- “Interest, dividends, or gains from the same account can be added on top of the depletion income.” Most guidelines treat that as double-counting the same asset pool and exclude it.
For a side-by-side on when this path makes more sense than a straight profit-and-loss loan for a retiree specifically, Lendmire’s comparison of asset depletion versus a P&L loan for a retiree covers that decision in more depth.
Tax treatment can depend on how funds are used and how a property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction.
Frequently Asked Questions
Do I have to move my accounts to a specific bank to use asset depletion?
No — most wholesale guidelines require the accounts to be verifiable and U.S.-based, not held at a particular institution. What matters is that statements show seasoning and that the funds are genuinely accessible, not the name on the account.
Can I combine asset depletion with my Social Security or pension income?
In many cases, yes — asset-depletion income can often be layered on top of other qualifying income depending on the specific program, though a few lenders in the network require it to be the sole qualifying source. This is a program-by-program overlay, not a fixed rule.
Does asset depletion work for an investment property, or just a primary residence?
The asset-allowance divisor structure described above applies to primary residences and second homes; investment-property files typically lean more on the property’s own rental income, with asset strength used to supplement a shortfall rather than carry the file alone, subject to lender guidelines.
What happens to my qualifying income if the market drops after I close?
The loan qualification is based on the asset balances at the time of underwriting — it isn’t re-tested against market swings after closing. That’s part of why lenders discount volatile asset classes upfront rather than counting them at full statement value.
Is there a minimum amount of assets needed to make this worth pursuing?
It depends on the loan amount, the leverage requested, and the reserve requirement at that size — there’s no single dollar floor across every program. A broker working multiple wholesale lenders can size that against the specific loan being requested rather than guessing at a rule of thumb. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
If you’re weighing whether to qualify on a portfolio instead of selling positions, Lendmire — a mortgage broker offering this program through select wholesale lenders, licensed for consumer mortgage lending in 16 states — can help compare how different programs discount your specific asset mix and where the leverage lands at your loan size. Reach the team at 828-256-2183 or request a quote to walk through the numbers.
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, NMLS# 2371349, is a non-QM mortgage broker serving real estate investors in 40 markets, including Washington, D.C., through DSCR investor loan programs. Qualification is generally reviewed around the subject property’s rental income, not the borrower’s W-2 history — a practical fit for LLC-titled portfolios and self-employed investors. All scenarios remain subject to lender review and program guidelines. Two consecutive Scotsman Guide Top Mortgage Workplace recognitions (2025, 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. IRS – What if I withdraw money from my IRA
2. CFPB – Ability-to-Repay/Qualified Mortgage Final Rule
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.
