Asset Depletion Loans In The Woodlands — The Quick Read: These loans let a borrower turn liquid assets — brokerage accounts, savings, retirement funds — into a monthly qualifying income figure instead of using pay stubs or traditional personal-income documentation. A lender divides eligible assets by a set number of months, and that number stands in for income on the debt-to-income calculation. It’s a consumer tool, built for primary homes and second homes. It is not the mechanism that gets a rental property financed — that’s a separate conversation, covered below.
Key Takeaways
- Asset depletion converts liquid assets into a hypothetical monthly income figure using a divisor — 36, 60, or 84 months are common on select wholesale programs.
- Not every account counts equally. Retirement funds typically count at 70%, stepping to 80% once the borrower clears age 59½, through select lenders in the network.
- Down payment, closing costs, and required reserves come off the top before the remaining balance gets divided — the same dollar can’t do double duty.
- This is a primary-residence and second-home tool. Financing a rental property runs through a different lane entirely: DSCR loans, which qualify on the property’s own rental income.
- Above certain loan sizes, files move to case-by-case underwriting rather than a fixed leverage grid — more on that below.
What Asset Depletion Actually Solves
Plenty of borrowers look wealthy on paper and thin on income. A retiree with a seven-figure portfolio might show almost nothing on a tax return. A founder who just sold a company might have eight figures sitting in a brokerage account and zero traditional employment income this year. Standard mortgage underwriting, built around paychecks and tax filings, doesn’t know what to do with that.
Asset depletion underwriting exists to close that gap. Instead of asking “what did you earn,” it asks “what do you hold, and how long could it support a payment.” The lender takes a slice of the borrower’s liquid net worth, spreads it across a set number of months, and treats the result as income for qualifying purposes.
This isn’t a workaround or a loophole. The federal consumer-finance regulator’s repayment-capacity summary frames current assets alongside current income as one of the factors a creditor weighs before extending residential credit.
Key Terms Defined
Asset depletion (or asset dissipation) underwriting is a method of turning a borrower’s liquid assets into a hypothetical monthly income figure, used when standard income documents don’t reflect the borrower’s real capacity to pay.
Divisor is the number of months a lender spreads a borrower’s eligible assets across to produce that monthly income figure — shorter divisors produce a bigger monthly number from the same asset pool.
Repayment-capacity (repayment-capacity) is the federal standard requiring a mortgage lender to reasonably determine, using documented information, that a borrower can afford the loan.
Business-purpose loan is financing tied to a non-owner-occupied property held for income or investment rather than as a personal residence — these loans sit outside consumer mortgage rules entirely.
Reserves are liquid funds a borrower must have left over after closing, kept separate from whatever is being used to qualify for income.
DSCR (debt-service coverage ratio) is a measure of whether a rental property’s own income covers its full monthly housing obligation — used to qualify investment-property loans without touching the borrower’s personal income at all. Lendmire’s complete DSCR loans guide walks through that framework in full.
How Underwriting Actually Treats It, Step by Step
The mechanics follow a fixed sequence, even though the specific numbers vary by lender.
First, the lender builds an asset inventory. Every account that might qualify — checking, savings, brokerage, retirement — gets documented with statements. Ownership matters: joint accounts, business accounts, and accounts the borrower can’t freely access get flagged early.
Second, haircuts get applied by asset class. Cash generally counts close to full value. Stocks, bonds, and mutual funds get discounted to account for market swings. Retirement accounts get discounted further because of early-withdrawal exposure — the OCC’s guidance on asset dissipation underwriting describes this method as converting assets into a “hypothetical cash annuity stream,” which only works if the underlying balance is realistically accessible.
Third, the lender nets out what the deal itself consumes. Down payment, closing costs, and required post-closing reserves come off the eligible-asset total before anything gets divided. A dollar earmarked for closing can’t also generate qualifying income.
Fourth, the divisor gets applied. The remaining net eligible assets get divided by a term of months, producing a monthly figure that feeds directly into the debt-to-income math.
Fifth, that imputed figure runs through standard underwriting — credit, reserves, debt ratios, and everything else a full file requires.
Through select programs Lendmire places files with, the divisor choices commonly run 36, 60, or 84 months. A shorter divisor produces a bigger monthly qualifying figure from the same asset pool, but it’s typically only available when the borrower’s overall debt load is modest. Longer divisors, or a standalone asset-only approach, get used when the loan is larger or the asset pool needs to stand entirely on its own without other income support.
The Structures That Actually Exist
There isn’t just one asset-depletion product. There are at least two different types, and mixing them up confuses borrowers. Federal guidance on residential mortgage underwriting has long allowed lenders to treat assets as a stand-in for income when checking if a borrower can repay a loan. The assets just need solid documentation — the same standard used for wage income also applies to asset-based qualification.
Asset allowance treats the depleted-asset figure as supplemental income, blended alongside whatever else the borrower earns. On the programs Lendmire’s wholesale network carries, this path typically uses a 36-month divisor when overall debt-to-income sits at or below 60%, stretching to a 60-month divisor when the DTI runs higher. It’s available on primary residences and second homes, generally to 80% loan-to-value.
Standalone asset qualification treats the asset pool as the entire qualifying story — no supplemental income needed, no debt-to-income ratio calculated at all. This path typically runs on an 84-month divisor, and it’s also the required approach on larger loan amounts, generally above $3,500,000, where the underwriting wants a longer runway before it will lean on assets alone.
Assets-only is a step further still. Instead of dividing anything, the lender simply confirms the borrower holds liquid, U.S.-based assets equal to the full loan amount, plus closing costs, plus an offset equal to sixty months of any net loss the borrower carries on other residential property. No division, no DTI — just proof the liquidity exists.
Retirement accounts get their own treatment across all three structures. They typically count at 70% of the vested balance, rising to 80% once the borrower turns 59½. This reflects the borrower’s reduced access to those funds before that age. Business accounts, gifted funds, trusts other than a revocable living trust, unvested stock, and cryptocurrency generally don’t count at all under these programs. They simply don’t meet the basic test of being liquid, seasoned, and freely accessible.
Loan sizes on these bank-statement and asset-based programs run from $300,000 up through $30,000,000, spread across two separate wholesale ladders. A portfolio non-QM program carries files to $6,000,000. A bank-statement portfolio program picks up twelve-month files on its own size ladder — 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% loan-to-value or the band’s own ceiling, whichever is lower. Above $4,000,000, every file moves to case-by-case underwriting before it’s even submitted — that’s true regardless of which structure is used.
Where the General Rule Breaks
A few edge cases trip up borrowers who think of asset depletion as a single, uniform formula.
Age 59½ is a hard line, not a gradient. Below that age, retirement funds get counted at a lower percentage because an early withdrawal would trigger a penalty — the usable qualifying value is lower than the account statement suggests. Cross that birthday and the same account counts at a higher percentage. Two borrowers with identical retirement balances can qualify very differently depending on which side of that line they sit on.
Income and assets from the same account can’t stack. If a brokerage account throws off dividends or interest, that income generally can’t be counted separately on top of the depletion figure calculated from the same account balance. It’s one or the other from those dollars, not both.
Reserves and qualifying assets are separate pools. A common mistake is assuming the same liquid balance can satisfy both the income calculation and the post-closing reserve requirement. It can’t — the required reserve amount typically has to sit apart from whatever gets divided for qualifying income. Through select lenders in Lendmire’s network, reserves scale with loan size: roughly three months of housing payment on loans to $500,000, six months to $1,500,000, and nine months above that, plus two additional months for each other financed property the borrower carries, up to a twelve-month ceiling. First-time real estate investors are typically held to the full twelve months regardless of loan size.
Credit and occupancy limits tighten as size grows. Credit floors on these programs typically start around 660 on the portfolio path and 680 on the bank-statement path, moving to 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 — additional overlays commonly apply: a clean 24-month payment history, 48 months of seasoning on any past credit event, and no non-occupant co-borrowers.
Occupancy is the biggest edge case of all. Asset depletion is a consumer, owner-occupied qualification tool — it’s built around personal ability-to-repay analysis for a primary residence or second home. It was never designed to finance a property the borrower doesn’t live in.
Why This Isn’t the Tool for Buying the Rental Itself
This is the point where a lot of investors get tangled up, and it’s worth being direct about it: a large asset position is a powerful lever for a primary residence or a second home, but it typically isn’t what gets a rental property financed.
DSCR loans are built for non-owner-occupied investment properties. Since they’re business-purpose loans for investors, lenders review them differently than a standard owner-occupied mortgage. That difference is exactly why DSCR loans exist as their own product, separate from asset depletion, rather than just a variation of it.
Rather than measuring the borrower’s assets or income, a DSCR loan measures the property’s own rent against its full monthly payment. For a single-unit rental, that rent figure typically comes from the same standardized rent-schedule appraisal form the industry has used for years. This is the same form referenced in Fannie Mae’s guidance on short-term rental income, which notes that you can’t just multiply a nightly short-term rate to replace a standard market-rent conclusion. Non-QM lenders rely on this same appraisal approach, even though DSCR loans themselves don’t follow agency eligibility rules.
Through select programs in Lendmire’s wholesale network, DSCR loans qualify primarily on property-level rental income covering the payment, subject to lender guidelines — not on the borrower’s traditional personal-income documentation, W-2s, or personal asset statements. Leverage on investment property purchases through these programs runs as high as 85% on smaller loan amounts, stepping down as the loan size grows, with an 80% ceiling on cash-out refinances above 60% loan-to-value and 75% on standard-rental cash-out at the top of that range. Sub-1.00 coverage scenarios can sometimes still work through select lenders in the network, though leverage and terms adjust accordingly.
Sometimes an investor’s rental income alone doesn’t cover the payment. In these cases, some non-QM programs let liquid assets supplement — not replace — the property’s cash flow analysis. This option is worth asking about specifically, since it’s different from standalone asset depletion and isn’t available on every program. If you’re comparing the two structures, you may find it helpful to see how asset depletion stacks up against a DSCR loan.
The Investor Decision in Practice
The decision usually comes down to what’s actually being financed and whose financial picture is doing the qualifying.
If the property is a primary residence or second home, and the borrower’s actual income doesn’t match their real net worth, asset depletion is worth exploring. This is especially true for standalone or assets-only structures, for borrowers who’d rather not blend other income into the file. Tax treatment can depend on how the funds are used and how the property is held. So, investors should keep clear records and talk with a qualified tax professional before counting on any specific tax outcome.
If the property is a rental — something the borrower doesn’t plan to occupy — the more direct path is almost always a DSCR loan, qualifying on what the property itself produces. That’s true whether the borrower has $50,000 in liquid assets or $50 million; occupancy, not net worth, is what routes the file.
Investors handling both situations at once — say, buying a personal home while also picking up a rental property — often end up running two separate files through two separate underwriting paths. That’s normal. It’s worth noting this from the network’s underwriting side: files that try to combine an asset-depletion purchase for a primary home with rental-property financing in one submission tend to slow down. That’s because the two products follow entirely different review standards. Keeping them separate from the start is usually the cleaner path.
Investors comparing structures across different markets sometimes find it useful to see how the same asset-based approach plays out for other property types and borrower profiles — asset depletion loans in Wrightsville Beach covers one such variation.
Frequently Asked Questions
Do I have to actually sell or withdraw my assets to use them for qualifying?
No. The lender only needs to document that the assets exist and meet eligibility and seasoning standards. The money can stay invested; the depletion calculation is a qualifying exercise, not a withdrawal requirement.
Can I combine asset depletion with my job income?
On the asset-allowance structure, yes — the depleted-asset figure is designed to supplement other income sources. On the standalone or assets-only structures, the asset figure typically has to stand on its own without blending in outside income.
Does my retirement account count the same as my brokerage account?
No. Retirement funds typically count at a lower percentage than liquid brokerage or cash accounts, and that percentage changes once the borrower passes age 59½ due to reduced early-withdrawal exposure.
Can I use asset depletion to buy a rental property?
Generally not directly — asset depletion is built around personal, owner-occupied qualification. A rental property purchase is typically financed instead through a DSCR loan, which is reviewed on the property’s own rental income rather than the borrower’s balance sheet.
What happens if my loan amount is very large?
Above roughly $4,000,000, files on these programs move to case-by-case underwriting rather than a fixed leverage grid, and additional overlays — tighter credit floors, longer seasoning on credit events, and reserve restrictions — typically apply above $3,500,000 on a primary residence.
If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire can help you compare DSCR loan options based on the property’s income, credit profile, leverage, and investor goals.
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 focused on DSCR investor financing, helping arrange programs through wholesale and investor-lending channels in 40 markets, including Washington, D.C. DSCR loans are evaluated by the lender on property cash flow rather than personal income, subject to lender guidelines, supporting LLC closings and accommodating investors with four or more financed properties. Scotsman Guide Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB Ability-to-Repay Summary (PDF)
2. OCC Bulletin 2019-36, Asset Dissipation Underwriting
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.
