Asset Depletion Loans In Beverly Hills: Qualifying On Assets Alone — The Quick Read: An asset depletion loan lets a borrower with heavy liquidity and thin reportable income qualify using a monthly income figure calculated from their brokerage, cash, and retirement balances. That flexibility is why one program’s qualifying income can look very different from another’s on the identical bank balance.
This matters most in high-cost, high-net-worth markets, where a buyer’s traditional personal-income documentation often understate what they can actually afford. A retired executive, a business owner between W-2 jobs, or someone sitting on a large brokerage account after a liquidity event can look weak on paper and strong on a statement. Asset depletion underwriting exists to close that gap — for owner-occupied and second-home purchases. It is not, as a rule, the tool that finances the rental property itself. That distinction drives most of what follows.
Key Terms Defined
Asset depletion (or asset dissipation) underwriting is a method that converts a borrower’s liquid assets into a hypothetical monthly income figure, without requiring the borrower to actually spend the money.
Haircut is the discount a lender applies to a volatile asset class — stocks, retirement funds — to account for market risk and, on retirement accounts, early-withdrawal penalties.
Divisor is the number of months a lender divides qualifying assets by to produce the monthly income figure. There is no single required number; it varies by lender and by loan size.
Repayment-capacity (repayment-capacity) rule is the federal requirement that a lender document a reasonable belief the borrower can repay the loan, using verified income, assets, employment, and debt — a rule that applies to every mortgage, not just asset depletion files, per the federal consumer-finance regulator.
DTI (debt-to-income ratio) compares the borrower’s monthly debt obligations to their monthly qualifying income — including the imputed income an asset depletion calculation produces.
What Asset Depletion Loans Actually Do
An asset depletion loan does not require the borrower to sell anything. The lender simply treats a portion of the borrower’s liquid net worth as if it were an income stream, runs it through a formula, and uses the output for standard debt-to-income qualification alongside credit, reserves, and file strength.
Nobody drains the account. The portfolio stays invested, the retirement fund stays untouched, and the borrower keeps earning whatever the market gives them. “Depletion” describes the underwriting fiction — the assets could be drawn down — not an instruction to actually do it.
The federal repayment-capacity framework requires lenders to consider and verify a borrower’s income or assets, employment, and credit history before making a covered loan. But it doesn’t tell a lender how to turn assets into a number, per the federal consumer-finance regulator’s compliance guide. Each individual program fills that gap on its own. Only one federal regulator has weighed in on the specific mechanics: the OCC, and only for the national banks it supervises. Its 2019 bulletin on Asset Dissipation Underwriting says the divisor a bank chooses just has to be prudent and supportable, similar to terms used on other residential loans. It doesn’t have to match one universal number (OCC Bulletin 2019-36). Non-bank lenders aren’t examined under that bulletin at all. That’s a big reason divisors and haircuts vary so widely across the non-QM space.
How Underwriting Turns Assets Into Income, Step By Step
Every asset depletion file runs through the same basic sequence, even though the specific numbers differ by lender.
1. Identify eligible assets. Cash, brokerage holdings, and vested retirement accounts typically count. Business accounts, unseasoned foreign accounts, restricted stock, and gift funds typically do not.
2. Apply a haircut to volatile categories. Retirement funds are usually credited at a partial value — a common convention on files placed through select wholesale programs credits retirement balances around 70%, rising to roughly 80% once the borrower clears age 59½, the point where the IRS early-withdrawal penalty no longer applies.
3. Subtract the money needed to close. Down payment, closing costs, and required reserves come off the top first — the same dollar cannot fund the purchase and generate qualifying income at once.
4. Divide by the chosen term. What remains gets divided by a set number of months to produce a monthly qualifying figure. This divisor is the single biggest lever in the whole calculation, and it is entirely lender-designed.
5. Feed the result into standard DTI. The imputed figure gets treated like any other income line — weighed against credit profile, reserves, and the rest of the file. Qualification never rests on the asset number alone.
Documentation follows the math: recent statements for every account used, proof of ownership and access, and — for retirement accounts — confirmation of the borrower’s age and distribution rights. Purchase agreements and closing cost estimates matter too, since they drive step three.
The Structures Available Through Select Wholesale Programs
Two distinct asset-based paths show up across the wholesale lenders Lendmire places files with. They solve different problems. No single federal rule fixes the math. Lenders build their own divisors and haircuts. The CFPB’s ability-to-repay rule only requires that lenders consider and verify assets — it doesn’t require converting them in a specific way.
Asset allowance treats the asset-derived income as supplemental — something layered alongside other qualifying income rather than replacing it. On files where overall debt-to-income sits at or below 60%, the balance divides by 36 months; above 60% DTI, or when the asset income needs to stand on its own, the divisor stretches to 60 months, and on any loan above $3,500,000 the standalone divisor moves to 84 months. This path is generally available on primary residences and second homes, up to 80% loan-to-value.
Assets-only qualification skips DTI math entirely. The borrower needs U.S.-based liquid assets equal to the full loan amount, plus closing costs, plus sixty months of coverage for any net loss on other residential real estate they hold. It’s a higher liquidity bar, but it removes income ratios from the conversation completely.
Retirement accounts count at 70% of value generally, moving to 80% once the borrower is 59½ or older. Business funds, gifts, trust assets outside a revocable living trust, unvested stock, and cryptocurrency don’t count in either path.
Sizing follows a broad ladder. Loans through this channel run from $300,000 up to $6,000,000 on the portfolio non-QM side, with a separate bank-portfolio program carrying twelve-month-statement files as high as $30,000,000 on its own leverage tiers — roughly 65% loan-to-value to $5,000,000, 60% to $10,000,000, and 55% up to $30,000,000, with interest-only capped at 60% or the tier’s ceiling, whichever is lower.
Leverage on a primary residence purchase steps down as the loan gets bigger: typically 90% up to $1,000,000, 85% up to $1,500,000-$2,000,000, tightening to roughly 75-80% in the $2,000,000-$3,500,000 range, then to roughly 65% once the loan crosses $4,000,000 — every file above that point goes through case-by-case review before it’s even submitted, subject to full underwriting. Second-home and investment-property leverage runs about five points lower at comparable loan sizes. Credit floors generally sit at 660 on the portfolio program, 680 on the bank program, and step up to 700 once a loan crosses into super-jumbo territory. Reserve requirements typically run 3 months of payments on smaller loans, 6 months in the mid-range, and 9 months on the largest files — figures that shift with loan size and file strength, subject to lender guidelines.
Where the General Rule Breaks
The age-59½ line is the single most consequential edge case in the whole calculation. Below that age, retirement funds still count — they just carry the heavier haircut, since the IRS applies a 10% additional tax to most early distributions from a qualified plan or IRA. There’s no hard age floor or ceiling on the program itself; a 38-year-old with a large brokerage account and a 74-year-old retiree qualify through the identical formula, just with different retirement-account math if that’s part of their balance sheet.
Business assets are a common trap. Liquidity sitting inside an operating LLC or corporate account generally doesn’t count toward the personal asset pool without first being moved and seasoned in the borrower’s own name. Many self-employed and business-owner borrowers assume their company’s cash reserves help their file — they typically don’t, at least not directly.
Trust-held assets are a genuine gray zone. Revocable living trusts are usually workable; other trust structures depend heavily on whether the borrower has direct, immediate, penalty-free access to the funds, and that gets reviewed case by case.
The biggest break in the general rule, though, is occupancy. Asset depletion was built around owner-occupied and second-home borrowers whose personal balance sheet stands in for missing income. It was not built to finance the rental property itself. That’s where the next section matters most.
Asset Depletion vs. DSCR: The Real Decision
If the property being financed is the investor’s own home or a second home, asset depletion is a legitimate tool. If the property being financed is a rental, a different structure almost always fits better.
A DSCR loan is reviewed primarily on the property’s own rental income covering the payment, subject to lender guidelines — not on the borrower’s personal bank balance. That’s a completely different underwriting question. Lendmire’s complete DSCR loans guide walks through how that qualification math actually runs.
This distinction matters. These two paths solve the same core problem from opposite directions: thin, deduction-heavy traditional personal-income documentation doesn’t reflect real financial strength. Asset depletion reads the borrower’s balance sheet. DSCR reads the property’s cash flow. An investor buying their primary residence off a large brokerage account is squarely in asset-depletion territory. An investor buying or refinancing a rental fourplex is almost always better served by DSCR financing instead. For a side-by-side of how that comparison plays out on program mechanics, check Lendmire’s breakdown of DSCR loans versus asset depletion loans. It covers the crossover cases directly.
The real overlap shows up at the margins. Take a rental property whose income alone doesn’t fully clear a program’s coverage floor. In select cases, a borrower’s separate liquid assets can support or supplement that file alongside the property’s own cash flow. Availability and terms depend heavily on the specific lender and the overall strength of the file, subject to underwriting. DSCR loans below a 1.00 coverage ratio are available through select programs in Lendmire’s network. But loan-to-value and pricing terms typically adjust when coverage runs light.
Here’s a pattern worth knowing: borrowers who recently sold a business or got a big cash windfall often show statements that look huge. But those statements are often heavy on new deposits or one large stock position. These files usually need extra time. Lenders must check where the money came from and how long it’s been sitting there. Only then does the asset pool the lender will actually credit match what the borrower expects to see on paper.
DSCR loans are business-purpose investor loans. Lenders review them differently from a standard owner-occupied mortgage. Because of that, they sit outside the consumer mortgage disclosure timelines that apply to owner-occupied purchases. Tax treatment on either structure can depend on how you use the funds and how you hold title. Borrowers should keep clear records and talk to a qualified tax professional before relying on any deduction.
What The Investor Decision Looks Like In Practice
Start with occupancy. If the loan is for a primary residence or second home and the borrower’s strength is on the balance sheet rather than the paycheck, asset depletion — through Lendmire’s 16-state consumer lending footprint — is the direct path, and the asset allowance or assets-only structures above cover most scenarios.
If the loan is for a rental property, occupancy answers the question differently. Lendmire also arranges DSCR investor loans across 39 states plus Washington, D.C., including Washington, D.C. — through select lenders in its wholesale network. That’s typically the more direct route for financing the property itself, rather than the borrower’s personal liquidity.
Either way, credit, reserves, and documentation quality still decide the outcome — not the size of the account alone.
Frequently Asked Questions
Does my portfolio have to be liquidated to use it for qualification?
No. The lender calculates a hypothetical monthly income from the balance; the borrower never has to sell anything to close or maintain the loan. The investments, retirement accounts, and cash stay exactly where they are.
Can I combine asset depletion with other income, like a pension or rental income?
Often, yes — asset-derived income is frequently layered alongside other verifiable income sources rather than used as the sole basis for qualification, particularly under an asset-allowance structure. Whether that blend works for a specific file depends on the borrower’s full income picture and the lender’s guidelines.
Why don’t asset depletion loans typically work for buying a rental property?
Because the category was built to solve a personal-income documentation gap for owner-occupied and second-home borrowers, not to underwrite the property itself. A rental purchase is usually a better fit for a DSCR loan, which qualifies off the property’s own rental income rather than the borrower’s personal assets.
Do retirement accounts count the same as a brokerage account?
No. Retirement funds are typically discounted more heavily — often credited around 70% of value, rising toward 80% once the borrower reaches 59½ — because of early-withdrawal tax exposure and market risk. Taxable brokerage accounts and cash generally carry different, usually lighter, discounts.
Is there a minimum age to use an asset depletion loan?
No. There’s no age floor or ceiling on the program itself. Age only changes the math on retirement accounts specifically, through the 59½ distribution threshold — it isn’t a standalone eligibility requirement.
Are you weighing whether your balance sheet or your rental property’s income is the stronger path to financing? Lendmire can help you compare asset depletion and DSCR loan options based on your assets, credit profile, leverage needs, and property type.
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 mortgage brokerage built around DSCR investor lending, with programs available in 40 markets, including Washington, D.C. DSCR lenders commonly evaluate rental-income coverage instead of personal income paperwork — a practical fit for LLC-owned and multi-property investors. Terms vary by lender, property, leverage, and program. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB — Ability-to-Repay Rule consumer page
2. CFPB — ATR/QM Small Entity Compliance Guide
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.
