Asset Depletion Loans In Brentwood — The Quick Read: Asset depletion turns liquid savings, brokerage holdings, and retirement accounts into a monthly income figure a lender can underwrite, instead of requiring pay stubs or traditional personal-income documentation. It works by dividing eligible assets by a set number of months, and it typically applies to a primary residence or second home rather than a rental purchase. Investors buying property to rent it out almost always move to a different lane: DSCR underwriting, which qualifies the deal on the property’s own rent.
Key Takeaways
- Asset depletion converts a balance sheet into imputed monthly income by dividing eligible liquid assets by a term of months — the divisor, not the asset total, decides how much income gets credited.
- Retirement accounts, brokerage holdings, and cash all count differently. Retirement funds typically credit at 70% of value, or 80% once the borrower clears age 59.5, per select wholesale-network guidelines.
- No one is forced to sell anything. The assets stay invested; they only prove capacity to pay.
- This is fundamentally an owner-occupied and second-home tool. Most asset depletion programs exclude investment property outright, which is the single biggest reason rental buyers end up in DSCR loans instead.
- Loan sizes on select wholesale asset-based and bank-statement programs run from roughly $300,000 to $30,000,000, with leverage stepping down as the loan amount climbs and everything above $4,000,000 reviewed case by case.
What Is an Asset Depletion Loan?
An asset depletion loan is a non-QM mortgage. It replaces income documentation with a math problem: how much monthly income can a pile of liquid assets reasonably support over the life of the loan? Instead of pay stubs, the lender looks at bank, brokerage, and retirement statements. The lender then converts a portion of that balance into a monthly figure that functions like income in the debt-to-income calculation.
This product exists because plenty of financially strong borrowers don’t look strong on a tax return. Retirees living off a portfolio, someone who just sold a business, or an investor sitting on a large brokerage account may show little or no W-2 or 1099 income, even though they clearly have the means to carry a mortgage. Regulators have recognized this for years. The OCC Bulletin 2019-36 describes what it calls “asset dissipation underwriting” and notes it “has existed and been prudently administered for many years” — this is not a workaround, it’s an established underwriting method that banks and non-bank lenders alike use inside a documented, verifiable framework.
That verification requirement isn’t optional. Asset depletion doesn’t skip that duty. It satisfies it with a different type of evidence.
Key Terms Defined
Asset dissipation underwriting (ADU): the formal regulatory term for asset depletion — using verified liquid assets, converted to a monthly figure, as an income substitute in mortgage underwriting.
Divisor (or depletion term): the number of months eligible assets get divided by to produce a monthly qualifying income figure. Shorter divisors produce higher monthly income and more buying power; longer divisors produce less.
Eligible assets: liquid or near-liquid holdings a lender will count — typically cash, brokerage/investment accounts, and vested retirement balances. Real estate equity, business-owned assets, and personal property generally don’t qualify.
Haircut: a discount applied to a volatile asset class before it enters the calculation, reflecting the risk that its value could drop before the borrower needs it.
Asset-based vs. assets-only: two different structures. Asset-based (sometimes called asset allowance) supplements or generates qualifying income through a divisor. Assets-only requires liquidity roughly equal to the full loan amount plus costs, with no debt-to-income calculation at all.
How Underwriting Actually Treats Your Assets, Step by Step
The process runs in a fixed sequence, and skipping a step is how borrowers end up disappointed by a number that’s much smaller than they expected.
Step one: sort assets into eligible and ineligible buckets. Cash, brokerage accounts, and vested retirement funds are the usual eligible categories. Business equity, unvested stock, cryptocurrency, and most trusts other than a revocable living trust typically don’t count at all in select wholesale-network guidelines.
Step two: apply a haircut to anything that isn’t cash. The OCC’s guidance frames this as a soundness expectation rather than a fixed number, noting that “discounts or adjustments for eligible asset values should consider liquidity and price volatility, and any liens or penalties for accessing the assets before maturity” (OCC Bulletin 2019-36). In practice, across the wholesale network Lendmire places files with, retirement accounts commonly credit at 70% of value, stepping up to 80% once the account holder passes age 59.5 — the point at which early-withdrawal penalties disappear.
Step three: remove funds already spoken for. Anything earmarked for the down payment, closing costs, or required post-closing reserves comes out of the pool before the depletion math runs. A dollar can’t double as both a reserve and a source of qualifying income.
Step four: divide by the term. This is where programs diverge the most, and it’s the single biggest lever in the whole calculation. Two loans with identical assets can produce very different qualifying income depending on whether the lender uses a 36-month, 60-month, or 84-month divisor. On select wholesale asset-allowance programs, a 36-month term applies when it’s supplementing other income and debt-to-income sits at or below 60%; a 60-month term applies when it’s supplementing income above that DTI threshold; and an 84-month term applies when the asset income is standing on its own, or on any loan above $3,500,000. Run a scenario: an investor holding $2,000,000 in eligible brokerage assets after haircuts, using the 84-month standalone term, produces a monthly qualifying-income figure that then gets fed into ordinary debt-to-income underwriting alongside credit, property, and reserve review — nothing about that figure guarantees approval on its own.
Step five: run it through normal underwriting. The resulting income figure joins any other documented income and gets tested against debt-to-income limits, credit history, and property review just like a paycheck would be. Nothing about asset depletion replaces underwriting; it replaces one input into it.
No forced liquidation. The assets used in the math never have to be sold. They stay invested. The whole point is proving capacity, not spending it down.
Structures and Variations: Two Different Ways to Qualify
Not every asset-based file works the same way. The two most common structures in select wholesale programs solve different problems. Under the Ability-to-Repay rule, lenders “must generally find out, consider, and document a borrower’s income, assets, employment, credit history, and monthly expenses” before extending a mortgage, according to the Consumer Financial Protection Bureau.
Asset allowance treats the depleted asset figure as a supplement or standalone income source, using the 36/60/84-month divisor structure described above. It’s built for a primary residence or second home, tops out around 80% loan-to-value on most files, and is where the majority of asset-depletion borrowers land.
Assets-only is a more conservative structure with no debt-to-income calculation whatsoever. It requires the borrower to show U.S.-based liquid assets equal to the full loan amount, plus closing costs, plus sixty months of any net loss the borrower is carrying on other residential property. There’s no divisor here because there’s no income being manufactured — the lender is simply confirming the borrower could pay off the loan in full if it came to that.
Loan sizes across these programs, plus the parallel bank-statement path in the same wholesale network, run from roughly $300,000 up to $30,000,000 through two distinct channels: a portfolio non-QM program carrying files to $6,000,000, and a separate bank-portfolio program built around twelve-month statements that carries its own size ladder to $30,000,000 — 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 band’s ceiling, whichever is lower. Leverage on a primary residence steps down as loan size climbs — from around 90% on smaller balances down through the mid-80s, mid-70s, and eventually into case-by-case territory above roughly $4,000,000, where every file gets individual review before it’s even submitted. Second-home and investment-property leverage typically runs several points lower than primary-residence leverage at every size tier.
Reserve requirements scale with loan size too. Lenders commonly require three months of payments up to $500,000, six months up to $1,500,000, and nine months above that. Borrowers who already own several financed properties may need additional reserves layered in. Credit score floors also step up with risk: 660 is a common floor on the portfolio program, 680 on the bank-statement ladder, and 700 once a loan crosses into super-jumbo territory — above roughly $3,500,000 on a primary residence or $3,000,000 on a second home or investment property.
For a side-by-side sense of how this compares structurally to a DSCR loan, Lendmire’s DSCR loan vs. asset depletion loan comparison walks through the underwriting logic of each in more depth than fits here.
Where the General Rule Breaks: Edge Cases
Occupancy is the biggest edge case, and it’s the one that matters most for a rental buyer. Most asset depletion programs — including the asset-allowance structure described above — are built for a primary residence or second home. They typically aren’t available for a straight investment-property purchase. That’s not a technicality; it reflects how the product is priced and risk-managed. A borrower buying a home to live in, or a second home to use personally, is a fundamentally different underwriting question than an investor buying a rental purely for the income it produces.
Age changes the retirement-account math meaningfully. Below age 59.5, retirement funds typically get credited at a lower percentage because early withdrawal can trigger tax penalties, making that money less reliably accessible. Past that age threshold, the haircut relaxes, since the borrower could tap the account penalty-free if they needed to.
Unseasoned deposits get more scrutiny, not less. A large sum that shows up in an account right before application — a gift, an inheritance, business-sale proceeds — typically needs to season for a period before it’s treated the same as long-held funds. Lenders want to see the money has actually settled into the borrower’s financial picture, not just landed there in time for underwriting.
Bank-regulated asset dissipation underwriting and non-bank asset depletion aren’t identical animals. The OCC’s 2019 bulletin governs how national banks build and monitor this calculation. A large share of non-QM asset-depletion lending happens outside that direct bank supervision, though the CFPB’s ability-to-repay verification duty still applies to any residential mortgage regardless of who originates it — described in detail in the CFPB’s summary of the Ability-to-Repay and Qualified Mortgage rule, which lists asset and income evaluation among the eight underwriting factors every mortgage lender has to consider.
Asset Depletion vs. DSCR: Which Fits an Investor’s Deal?
These two products get confused constantly because they both sit in the non-QM world and both avoid traditional tax-return income documentation. They solve different problems.
| Factor | Asset Depletion | DSCR |
|---|---|---|
| What’s evaluated | Borrower’s liquid asset balance | Property’s rental income vs. its payment |
| Typical occupancy | Primary residence, second home | Investment property |
| Qualifying math | Assets ÷ divisor = monthly income | Rent ÷ debt service = coverage ratio |
| Best fit for | High-asset, low-documented-income borrowers | Landlords and rental investors, entity or personal |
An investor with heavy brokerage and retirement balances but thin tax-return income is a textbook asset-depletion candidate — for the home they live in. The same investor buying a rental typically shifts into DSCR underwriting instead. There, the property’s own rent carries the file, not the owner’s balance sheet. Lendmire’s complete DSCR loans guide covers how that coverage-ratio math actually gets built. It also covers how a select network handles files below a 1.00x ratio with reduced leverage — never a guarantee, always subject to lender guidelines.
There’s a sequencing trap worth flagging here. An investor who ties up most of their liquid reserves qualifying a primary residence through asset depletion may find they’ve thinned out the cushion they’ll need to satisfy a subsequent DSCR loan’s reserve requirement. Reserves and qualifying assets generally can’t be pulled from the same dollars twice — spend them proving capacity on the house, and there’s less left to prove reserves on the rental purchase that follows.
DSCR files in the network Lendmire places business through often come from borrowers who have both a strong balance sheet and an asset-depletion-eligible primary residence already in place. The two products often show up back-to-back in the same investor’s file history, rather than competing for the same transaction. Getting the sequencing right — primary residence first, or rental purchase first — often matters more to the overall approval odds than either individual product’s guidelines.
What This Looks Like in Practice: Sizing a File
Consider an investor with roughly $1,500,000 in eligible brokerage and cash holdings, buying a primary residence in the $1,000,000–$1,500,000 range. After haircuts on the non-cash portion, the eligible balance runs through an 84-month divisor if it stands alone. This produces a monthly qualifying-income figure. Lenders then weigh that figure against credit profile, reserves, and the property itself. The loan isn’t approved on the asset math alone.
Now flip the scenario: the same investor wants to buy a rental property instead of a primary residence. Because most asset-depletion structures exclude investment property, that same $1,500,000 balance sheet doesn’t do the qualifying work directly. Instead, the property’s own rent has to clear a coverage ratio under DSCR underwriting, with the investor’s liquidity showing up as reserves rather than as imputed income. Same investor, same balance sheet, two structurally different loans depending on what’s being purchased and how it will be occupied.
Some borrowers’ income documentation falls in between two options. They have enough deposit activity to show cash flow, but not enough tax-return income to qualify conventionally. For these borrowers, the same wholesale network also runs bank-statement programs using 12 or 24 consecutive months of statements. Qualifying income gets calculated after an expense ratio tied to business type. That’s a separate documentation path from asset depletion. But it lives in the same non-QM toolkit, and it’s worth comparing before you lock into one structure.
Anyone weighing which path fits — asset-based, bank-statement, or DSCR — can call Lendmire at 828-256-2183 or request a quote to compare structures against the specific property and balance sheet involved.
Frequently Asked Questions
Do I have to sell my investments to qualify with asset depletion? No. The assets used in the calculation stay invested throughout the loan. They only serve as documented evidence of the borrower’s ability to make payments, not as a funding source the lender expects to be liquidated.
Can I use asset depletion to buy a rental property? Typically not through most standard asset-depletion structures, since they’re generally built for a primary residence or second home. Rental purchases usually move to DSCR underwriting instead, where the property’s rent — not the buyer’s balance sheet — carries the qualification.
What happens if my invested assets drop in value after I’m approved? The eligible-asset calculation is generally locked in at the point of underwriting rather than re-tested monthly, though this varies by lender and program, and any material change disclosed before closing can affect the file.
Do retirement accounts count the same as cash? No. Cash typically credits at full value, while retirement accounts commonly credit at a reduced percentage — often around 70% of value before age 59.5, moving up once the account holder clears that age threshold — reflecting the tax and access differences between the two.
Is there one standard divisor every lender uses? No, and this is the detail that changes outcomes the most. Divisors vary by program and by whether the asset income is supplementing other income or standing on its own; a shorter divisor produces more monthly qualifying income than a longer one on the exact same asset balance.
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. OCC Bulletin 2019-36 — Asset Dissipation Underwriting
2. Consumer Financial Protection Bureau — What Is the Ability-to-Repay Rule
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.
