Asset Depletion Loans In Telluride — The Quick Read: Asset depletion lets a borrower qualify for a mortgage using liquid assets instead of pay stubs or traditional personal-income documentation. A lender divides eligible balances by a set number of months to produce a monthly income figure, then underwrites the file against that number. It works best for retirees, founders, and investors whose real income doesn’t show up cleanly on a tax return. Sizes on this type of file run from $300,000 to $30,000,000 through select wholesale programs, subject to underwriting.
Asset depletion solves a specific problem. Plenty of high-net-worth borrowers have thin taxable income and a large balance sheet. A retiree living off a brokerage account, a founder who just sold a company, or an investor who reinvests most cash flow into new deals — none of them look strong on a W-2 or a 1040. Their bank statements and investment accounts tell the real story.
Key Takeaways
- Asset depletion converts liquid assets into a monthly qualifying-income figure by dividing the balance by a fixed number of months.
- Programs across the wholesale network typically use 36-, 60-, or 84-month divisors depending on the borrower’s debt-to-income and loan size.
- Retirement accounts usually count at a discount before age 59½ and at a higher rate afterward.
- Sizes on this program run from $300,000 to $30,000,000, with leverage stepping down as the loan gets bigger.
- Above $4,000,000, every file goes through case-by-case review before it’s even submitted.
Key Terms Defined
Asset depletion is an underwriting method that turns liquid assets into an imputed monthly income figure instead of using wage or self-employment income.
Divisor is the number of months a lender divides eligible assets by to calculate that monthly income figure — commonly 36, 60, or 84 months on the programs Lendmire places files with.
Debt-to-income (DTI) is the borrower’s total monthly debt obligations measured against their qualifying income, including the imputed income from asset depletion.
Reserves are the months of housing payment a borrower must have left over in liquid funds after closing, separate from the assets used to qualify.
Non-QM describes a mortgage that falls outside the Qualified Mortgage box — it doesn’t follow agency income rules, which is exactly what makes asset depletion possible.
How Underwriting Actually Treats an Asset-Depletion File
The mechanics run in a set order, and skipping a step is usually what stalls a file. Most lenders across the wholesale network Lendmire works with follow roughly the same sequence, even when the exact divisor or discount varies.
First, the lender collects statements on every account the borrower wants counted. This includes checking, savings, brokerage, and retirement accounts. Recent, consecutive statements matter more here than almost anywhere else in non-QM underwriting. A missing month or an unexplained large deposit is the single most common reason these files get held up.
Second, the lender screens which assets actually count. Business funds, gift funds, trusts other than a revocable living trust, unvested stock, and cryptocurrency generally don’t count at all on the programs Lendmire places files with. Retirement accounts count, but usually at a discount — commonly 70% of the balance below age 59½, stepping up to around 80% once the borrower clears that age threshold. That threshold isn’t arbitrary. The IRS imposes a 10% early withdrawal tax on money pulled from an IRA or retirement plan before age 59½, unless a specific exception applies, and that real cost is exactly why lenders discount the balance before that birthday.
Third comes the divisor. The lender takes the net eligible balance and divides it by a fixed number of months — often 36, 60, or 84 depending on the borrower’s overall debt load and the size of the loan. A shorter divisor produces more monthly qualifying income from the same asset pile; a longer one produces less but requires a smaller pool of assets to clear a given payment.
Fourth, the lender blends that imputed income into a standard debt-to-income calculation. This includes the proposed housing payment and any other debts. On most programs in Lendmire’s network, DTI can run as high as 50% on an asset-depletion file. That’s meaningfully looser than what a conventional file typically allows.
The Divisor Math: 36, 60, or 84 Months
The divisor is the single biggest lever in this whole product, and it’s set by the lender, not by any regulator. Across the programs Lendmire places files with, three bands show up most often.
A 36-month divisor is typically supplemental. That means it’s layered alongside some other qualifying income. It’s generally reserved for borrowers whose overall DTI, after adding the imputed income, sits at or below 60%. A 60-month divisor is also usually a supplemental option. But it’s the fallback when the borrower’s DTI runs above that 60% line. An 84-month divisor is the deepest stretch. It’s used either as a standalone qualification method with no other income at all, or it’s required outright on loans above $3,500,000 regardless of what else is in the file.
The tradeoff is straightforward: a shorter divisor spreads a smaller asset pool further, and a longer one demands more liquidity to hit the same monthly qualifying figure. Borrowers with concentrated but sizable holdings — a large brokerage account and not much else — tend to land on the shorter divisors when their DTI supports it. Borrowers relying on assets as the entire qualification story, with no other income to lean on, typically land on the 84-month path.
Structures and Variations That Actually Exist
Asset depletion isn’t the only way to qualify on a balance sheet, and conflating the variations is a common mistake. Three distinct paths show up across the wholesale network.
Asset allowance is the version most people mean when they say “asset depletion.” It uses the 36-, 60-, or 84-month divisor described above, applies only to primary residences and second homes, and typically caps leverage around 80%.
Assets-only qualification skips DTI entirely. Instead, the borrower needs U.S.-based liquid assets equal to the full loan amount, plus closing costs, plus up to sixty months of any net loss on other residential real estate they own. There’s no monthly income calculation at all — just a liquidity test against the total obligation.
Twelve- or twenty-four-month bank statements, and profit-and-loss-only documentation, are adjacent but different tools. Bank statement programs use actual deposit activity — including transfers from the borrower’s own business, which count at full value — divided by the statement period after an expense ratio (with the exact percentage varying by lender and business type, such as a service business with no employees versus a small team versus larger or product-based operations, or a documented accountant-provided ratio). A P&L-only path exists too, generally capped at a set expense allowance. None of these three require the balance-sheet math that defines asset depletion, but they solve a similar problem for a borrower whose traditional personal-income documentation doesn’t reflect real cash flow.
Fannie Mae’s own Selling Guide has a related but narrower concept for conventional loans. It’s called Employment Related Assets as Qualifying Income. It’s worth knowing this exists, mostly so an investor doesn’t confuse it with the non-QM version. The conventional rule is stricter. It generally requires proof the asset-based income can continue for three years. And it doesn’t offer the same flexibility on divisor length or asset type that the programs in Lendmire’s network provide.
Where the General Rule Breaks
A few edge cases change the math meaningfully, and a borrower who doesn’t account for them going in usually gets a surprise mid-file.
Age matters more than the balance itself. Two borrowers with identical account totals can qualify for very different monthly figures purely because one has crossed 59½ and the other hasn’t. The discount isn’t a lender quirk — it tracks a real IRS penalty on early withdrawals, and it’s not something a file can talk its way around.
Size changes everything above $3,500,000. On a primary residence, loans above $3,500,000 trigger super-jumbo overlays: a 700 credit floor instead of the standard 660, a clean 0x30x24 housing payment history, 48 months of seasoning on any past credit event, and a requirement that the borrower be a U.S. citizen or permanent resident with no non-occupant co-borrowers. Second homes and investment properties hit that same overlay line at $3,000,000. And on the 84-month standalone divisor specifically, that path is required — not optional — on any loan above $3,500,000, regardless of the borrower’s DTI.
Above $4,000,000, nothing is automatic. Every file at that size goes through case-by-case review before it’s even submitted. Leverage generally steps down to around 65% on a primary residence in that range, then follows a separate size ladder — roughly 65% through $5,000,000, 60% through $10,000,000, and 55% up to the $30,000,000 ceiling — through the bank portfolio program that carries the largest files on twelve months of statements. Interest-only structuring on that ladder tops out at 60% or the applicable band’s ceiling, whichever is lower.
Cash-out has its own cap. On the portfolio program, cash-out proceeds are unlimited at or below 60% LTV, but above that line, cash-in-hand is capped at $1,500,000. That cap surprises borrowers who assume a big asset base automatically means unlimited access to equity. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Some assets simply don’t count, no matter how large the balance. Business operating funds, gifted money, most trust structures, unvested stock, and cryptocurrency are excluded outright on the programs Lendmire places files with. A borrower who’s asset-rich on paper but holds most of that wealth in one of these excluded categories may qualify for far less than the headline balance suggests.
Asset Depletion vs. a Property Cash-Flow Loan
Asset depletion qualifies the borrower’s balance sheet. It has nothing to do with what a rental property earns on its own. That distinction matters for anyone buying investment real estate rather than a primary or second home. That’s because asset allowance and assets-only paths on this program apply only to primary residences and second homes — not to investment property.
For a rental purchase, the more common tool is a loan that qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. The industry commonly calls this a DSCR loan. An investor with a thin personal balance sheet but a property that generates strong rent may do far better on that kind of file. That’s better than trying to force an asset-depletion application that was never built for a non-owner-occupied purchase. Lendmire’s complete DSCR loans guide breaks down how that qualification math works property by property. The side-by-side comparison in DSCR loan vs. asset depletion loan is also worth a read for anyone weighing which path actually fits their file. Investors comparing how these programs play out for other high-net-worth buyers can also look at how the asset-depletion path is structured for buyers in La Jolla, where the same balance-sheet mechanics apply against a different price point.
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.
What the Decision Looks Like in Practice
A borrower deciding between documentation paths is really answering one question: does the income story live on a tax return, in bank deposits, or on a balance sheet? Someone with steady, provable deposits from an active business is usually better served by a 12- or 24-month bank statement file. Someone with a large but static pool of investments and little recurring cash flow is the natural asset-depletion candidate. This is the classic early retiree or post-liquidity-event founder.
Credit still matters throughout. The floor sits at 660 on the portfolio program, 680 on the bank portfolio program, and steps up to 700 once a loan crosses into super-jumbo territory. Reserve requirements scale with loan size too — typically three months of payments up to $500,000, six months up to $1,500,000, and nine months above that, plus additional months for each other financed property a borrower carries.
Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction.
Lendmire operates as a broker. It arranges financing through select lenders in its wholesale network across 40 markets, including Washington, D.C. It doesn’t underwrite or fund these loans directly. Instead, it shops the file across multiple wholesale programs to find the leverage and documentation path that fits a specific borrower’s balance sheet. If you’re weighing an asset-depletion path against a bank-statement or property cash-flow structure, Lendmire can help compare how the numbers actually run, based on the assets, the property, and the loan size involved.
Frequently Asked Questions
Do all my liquid assets count toward the divisor?
No. Retirement accounts typically count at a discount — around 70% before age 59½ and closer to 80% afterward — and several categories don’t count at all, including business operating funds, gifted funds, most trusts other than a revocable living trust, unvested stock, and cryptocurrency. Only U.S.-based, verifiable liquid assets go into the calculation.
Can I use asset depletion to buy a rental property?
Generally no. The asset allowance and assets-only paths on this program apply to primary residences and second homes, not investment property. Rental purchases typically move to a loan that qualifies primarily on the property’s own rental income covering the payment, subject to lender guidelines.
What’s the difference between the 36-, 60-, and 84-month divisors?
The shorter divisors (36 and 60 months) are usually supplemental, layered with some other income, and tied to the borrower’s overall debt-to-income. The 84-month divisor is used either as a standalone qualification method with no other income at all, or required outright on any loan above $3,500,000.
Is there a maximum loan size for asset depletion?
The overall wholesale program this qualification path sits within runs from $300,000 to $30,000,000, though leverage steps down significantly at the top of that range and every file above $4,000,000 goes through case-by-case review before submission. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Why does my retirement account count less than my brokerage account?
Because early withdrawals before age 59½ carry a real cost. The IRS applies a 10% additional tax on most early distributions from retirement accounts, and lenders discount the balance to reflect that money isn’t fully accessible without a penalty.
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 specializing in DSCR investor loans, helping arrange financing across 40 markets, including Washington, D.C., through wholesale and investor-lending channels. The model centers on property-level rental income reviewed by the lender rather than W-2 documentation, subject to lender guidelines, suiting entity-owned and multi-property investors. Lendmire holds Scotsman Guide Top Mortgage Workplace recognition for 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. IRS — Retirement topics: Exceptions to tax on early distributions
2. Fannie Mae Selling Guide — B3-3.4-06 Employment Related Assets as Qualifying Income
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.
