Asset Depletion Loans In Horseshoe Bay — The Quick Read: An asset depletion loan converts liquid assets — brokerage accounts, retirement funds, cash — into a monthly qualifying income figure, without selling or touching the underlying money. Lenders divide eligible balances by a set number of months instead of looking at a paycheck. Through select lenders in Lendmire’s wholesale network, that divisor runs 36, 60, or 84 months depending on the structure, and a separate assets-only path skips income math altogether if liquidity is high enough. Nothing gets liquidated; the arithmetic is the whole product.
This matters for a specific kind of buyer: someone with real net worth and a tax return that doesn’t reflect it. Retirees living off a portfolio. A founder two years post-exit with no W-2. A physician whose K-1 shows losses on paper. Asset depletion fixes that mismatch.
Key Terms Defined
Asset depletion (or asset dissipation): a method of calculating qualifying income by dividing a borrower’s eligible liquid assets by a fixed number of months, instead of using pay stubs or traditional personal-income documentation.
Divisor: the number of months a lender divides assets by to produce a monthly income figure. A shorter divisor produces more monthly income and a bigger coverage figure; a longer divisor produces less.
Asset allowance: a structure where the asset-based income figure supplements another income source rather than standing alone, often used to push a borderline debt-to-income ratio into range.
Assets-only qualification: a structure with no debt-to-income calculation at all — the borrower simply needs liquid assets equal to the loan amount, closing costs, and a cushion for any net loss on other owned residential property.
Haircut: the discount applied to certain asset types before they count toward the calculation. Retirement funds, for example, typically count at less than full value.
How Underwriting Actually Treats Your Assets
The math happens in a fixed sequence, and skipping a step is where files get stuck. Across the wholesale programs Lendmire places files with, the sequence looks like this.
First, the file inventories every liquid account: checking, savings, brokerage, and retirement. Business funds, gifts, most trusts other than a revocable living trust, unvested stock, and cryptocurrency never count toward this pool in the programs Lendmire works with. That’s a hard line, not a negotiable one.
Second, retirement accounts get discounted based on the borrower’s age. Funds count at 70% of value generally, rising to 80% once the borrower has cleared 59½ — the age tied to penalty-free access under federal retirement rules. A 55-year-old with $1,000,000 in an IRA and a 62-year-old with the identical balance produce two different qualifying numbers, purely on the age line.
Third, the lender backs out whatever the transaction itself consumes — down payment, closing costs, and any required reserves — because that money won’t be sitting in the account generating ongoing qualifying power.
Fourth, whatever remains gets divided by the program’s divisor: 36 months, 60 months, or 84 months, depending on the structure chosen (more on that below). The result becomes a monthly income figure that drops into the file exactly like a paycheck would.
Fifth, that imputed income runs through the same debt-to-income math as any other file — credit, appraisal, title, and reserves proceed the normal way from there. Debt-to-income can run to 50% on most files in this program set, and the qualifying income from assets counts toward that ceiling just like wage income would.
What Divisor and Allowance Structures Are Available?
There isn’t one asset depletion formula — there are several, and the one a lender picks changes the coverage figure by a wide margin on the identical bank statement. In the programs Lendmire’s wholesale network places files through, three structures cover most files.
The 36-month divisor is the most aggressive of the three. It’s used as a supplemental income source when the borrower’s overall debt-to-income ratio is already at or below 60%, and it produces the largest monthly income figure of the three options because the assets are spread over the shortest window.
The 60-month divisor is also supplemental, reserved for files where debt-to-income runs above 60%. It’s a middle path — less generous than 36 months, still meaningfully stronger than a long-window calculation.
The 84-month divisor stands on its own as a standalone qualification method, and it’s also the required structure any time the loan amount runs above $3,500,000. It produces a smaller monthly figure per dollar of assets than the shorter divisors, but it doesn’t need to lean on another income source to work.
All three of these — 36, 60, and 84 months — are capped at 80% loan-to-value and apply to primary residences and second homes only in this program set; they’re not the vehicle for a rental-property purchase.
Separate from the divisor math entirely is the assets-only path, which skips debt-to-income altogether. To qualify this way, your U.S. liquid assets need to equal the loan amount, plus closing costs, plus sixty months of coverage for any net loss reported on other residential real estate you own. No ratio gets calculated because none is needed — liquidity itself is the qualification.
| Structure | Divisor / Test | Debt-to-Income Treatment | Loan-to-Value Ceiling |
|---|---|---|---|
| Asset allowance (36-mo) | 36 months | Supplemental, DTI ≤ 60% | 80% |
| Asset allowance (60-mo) | 60 months | Supplemental, DTI > 60% | 80% |
| Asset allowance (84-mo) | 84 months | Standalone, or any loan above $3.5M | 80% |
| Assets-only | Loan + costs + 60-mo loss cushion | No DTI calculated | Per property/program ladder |
Credit floors sit around 660 on the portfolio program and 680 on the bank-statement program that carries larger files, tightening to 700 above the point where super-jumbo overlays apply. Reserve requirements generally run 3 months of payments on loans to $500,000, 6 months to $1,500,000, and 9 months above that, with 2 additional months required per other financed property, up to a 12-month ceiling. These are typical figures from select wholesale-network guidelines, not universal terms, and every file is underwritten individually.
Where the General Rule Breaks: Edge Cases That Change the Math
The 84-month standalone path and the assets-only path cover most straightforward files. But several situations change the outcome entirely. None of these borrowers fail the ability-to-repay test because they lack money. They fail because standard underwriting only looks at income documents.
Above $3,500,000 on a primary residence — or $3,000,000 on a second home or investment property — super-jumbo overlays take over. Credit needs to clear 700, housing history needs to show a clean 24 months, and any credit event on record needs 48 months of seasoning. Non-occupant co-borrowers aren’t permitted, rural property is excluded, and cash-out proceeds can’t be used to satisfy the reserve requirement. Every file at this size is reviewed case by case before submission — never assume a flat leverage ceiling applies once a loan crosses this line. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Real estate equity doesn’t enter the calculation. A borrower with $2,000,000 in home equity and $200,000 in a brokerage account is reviewed on the $200,000, not the equity. This surprises borrowers more than any other part of the process, because equity is real net worth — it just isn’t liquid, and asset depletion is built entirely around liquidity.
Recently deposited funds — gifts, inheritance, a business sale — face scrutiny before they count at full value. A lump sum that landed in an account last month reads differently than one that’s been sitting there through several statement cycles. This is a documentation issue as much as an eligibility one: statements need to be complete, consecutive, and unbroken, with every page included even where a page is marked blank.
Combined-source stacking is common, and it can obscure what’s actually qualifying the file. Asset allowance income frequently gets paired with Social Security, pension income, or part-time wages to reach a qualifying total — that’s exactly what the 36- and 60-month supplemental structures are built for. The practical takeaway for a borrower: ask for the breakdown. Know exactly how much of the coverage figure is coming from assets versus other income, because that split affects how much of the portfolio needs to stay untouched.
Short-term rental income and asset depletion don’t combine the way some investors expect. If the plan is to buy a lake house, live in it part-time, and rent it out on a nightly basis, the appraisal forms used to document rental value on a standard 1- to 4-unit property weren’t built for nightly-rate bookings — a separate consideration entirely from the asset math, and one worth raising with a broker before assuming a short-term rental projection will support the file.
The federal regulatory posture on this method is deliberately unspecific. The Office of the Comptroller of the Currency addressed asset dissipation underwriting directly in OCC Bulletin 2019-36, describing it as a legitimate way for banks to work with borrowers who have real repayment capacity even when they don’t meet traditional income-based standards — but the bulletin stops short of mandating a single formula, which is exactly why divisors and haircuts vary from one guideline set to the next. On the consumer-protection side, the CFPB’s Ability-to-Repay and Qualified Mortgage rule lists current or reasonably expected assets as one of eight factors a lender may weigh, right alongside income — which is the legal basis every non-QM lender leans on when qualifying a file this way. Neither agency’s language changes how any individual wholesale program runs its own divisor; it just explains why the industry has several different ones.
Is an Asset Depletion Loan the Right Structure for You?
The decision usually comes down to one question: does the borrower want the asset math to stand alone, or does it need to work alongside another income source?
Picture a retiree with a large, seasoned brokerage account and no other income. This is the clearest fit for the standalone 84-month path or the assets-only route, depending on how much liquidity sits in the account relative to the loan size. A borrower with partial income — Social Security, a pension, part-time consulting — is often better served by the 36- or 60-month supplemental structure. This lets a smaller pool of assets do less of the work.
Cash-out is worth flagging separately. On the portfolio program, cash-out proceeds are uncapped at or below 60% loan-to-value. Above that threshold, there’s a $1,500,000 cash-in-hand ceiling. Interest-only structuring runs to 85% loan-to-value with a 700 credit floor on the portfolio program, or 60% on the larger bank-statement program. None of these cash-out or interest-only figures apply on the assets-only path. That structure is built for straightforward purchase or rate-term scenarios, not equity extraction.
Say you’re an investor buying a rental property, not a primary or second home. Asset depletion generally isn’t the right tool for you — these asset-allowance structures are built for primary and second-home occupancy. A rental purchase usually fits better with a DSCR loan. This type of loan qualifies mainly on the property’s own rental income covering the payment, subject to lender guidelines, not on your personal balance sheet. Want to compare the two? You can look at how asset depletion compares to a DSCR loan directly before deciding which one fits your purchase.
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.
Frequently Asked Questions
Do I have to sell my investments to use an asset depletion loan?
No. Nothing gets liquidated and nothing gets pledged as collateral for the loan itself. The lender counts what’s already sitting in the account, applies the divisor, and produces a qualifying income figure — the portfolio stays invested exactly as it was before the application went in.
Does my age affect how much of my retirement account counts?
Yes. In the wholesale programs Lendmire places files with, retirement funds typically count at 70% of value, rising to 80% once a borrower has passed 59½ — the age tied to penalty-free withdrawal access. A borrower closer to that age threshold sees a stronger coverage figure from the identical account balance.
Can I combine asset depletion with Social Security or pension income?
Yes, and it’s common. The 36-month and 60-month asset allowance structures are specifically built to supplement another income source rather than carry the file alone, which is why they’re categorized by the borrower’s resulting debt-to-income ratio rather than treated as a standalone calculation.
What happens if my loan amount is above $3,500,000?
The 84-month divisor becomes mandatory rather than optional at that size, and super-jumbo overlays apply — a 700 credit floor, clean 24-month housing history, and 48 months of seasoning on any credit event, among other requirements. Every file at this size is reviewed case by case before submission rather than approved against a flat published ceiling.
Does home equity count toward the asset pool?
No. Only liquid or near-liquid holdings — checking, savings, brokerage, retirement — count toward the depletion calculation. Real estate equity, however substantial, sits outside the pool entirely, which is one of the most common points of confusion for borrowers coming into this process for the first time.
Are you weighing an asset-based purchase or refinance? Do you want to see how the divisor structures line up with your actual account balances? Lendmire can help. It compares options across its wholesale lending network based on your assets, the property, and the loan size.
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
As a DSCR and non-QM mortgage broker, Lendmire — NMLS# 2371349 — connects investors with wholesale lending channels across 40 markets, including Washington, D.C. The property’s rental income, not the borrower’s tax returns, is central to lender review, which works for self-employed operators and portfolios beyond four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
2. CFPB Ability-to-Repay and Qualified Mortgage Standards Under TILA (Regulation Z)
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.
