Asset Depletion Mortgages In Colorado — The Quick Read: An asset depletion mortgage lets a borrower qualify using liquid assets instead of pay stubs or traditional personal-income documentation. Lenders take eligible accounts — checking, brokerage, retirement — and convert them into a monthly income figure by dividing the balance over a set number of months. Not every asset counts, and the ones that do often count at a discount. Real estate equity, business funds, and unseasoned gifts are usually excluded entirely.
Key Takeaways
- Asset depletion converts liquid balances into a monthly income figure a lender can use for qualification — it doesn’t require selling anything.
- Retirement accounts typically count at a reduced value, and the discount often depends on whether the borrower has passed age 59½.
- Business-titled funds, unseasoned gifts, unvested stock, and cryptocurrency generally don’t count at all.
- Two program structures exist: one blends asset income with other verified income, the other is reviewed on assets alone with no debt-to-income test.
- Real estate equity is not a qualifying asset in this framework — it’s excluded from the liquid-asset pool entirely.
Key Terms Defined
Asset depletion is an underwriting method that turns a borrower’s liquid savings into a hypothetical monthly income figure, used in place of — or alongside — traditional pay stubs.
LTV (loan-to-value) is the loan amount expressed as a percentage of the property’s value; a lower LTV means a bigger down payment.
Reserves are the months of housing payments a borrower must have left over in liquid savings after closing, held as a cushion.
Business-purpose loan is a loan made to an investment property, not a primary home — it’s underwritten around the deal, not the borrower’s personal tax return.
Which Assets Actually Count
Liquid accounts that are easy to verify count the most. Checking, savings, money market, and brokerage accounts form the core of any asset depletion file. These are the funds a lender can confirm exist, confirm belong to the borrower, and confirm can be accessed without any penalty.
Retirement accounts count too, but almost never at full value. Across the wholesale network Lendmire works with, retirement funds are typically counted at 70% of balance, stepping up to 80% once the borrower is past age 59½ — the age at which the IRS drops the 10% early-withdrawal penalty on most retirement distributions. That penalty is exactly why the discount exists: a dollar in an IRA isn’t worth a full dollar in liquidity if pulling it early costs the borrower a tax hit.
Here’s the asset lineup lenders in Lendmire’s network typically apply, in plain terms:
| Asset Type | Counts Toward Qualification? | Typical Treatment |
|---|---|---|
| Checking, savings, money market | Yes | Full value, after down payment and reserves |
| Brokerage / investment accounts | Yes | Full or near-full value, subject to review |
| Retirement accounts (IRA, 401(k)) | Yes | 70% of balance; 80% if borrower is 59½+ |
| Business-titled bank accounts | Rarely | Generally excluded — funds may be needed for operations |
| Gifted or inherited funds (unseasoned) | Rarely | Excluded until seasoned and documented |
| Trusts other than a revocable living trust | No | Excluded |
| Unvested stock or RSUs | No | Excluded — not yet the borrower’s asset |
| Cryptocurrency | No | Excluded |
| Real estate equity | No | Not a liquid asset in this framework |
That last row surprises a lot of people. Net worth and qualifying liquidity are two different things. A borrower sitting on several million dollars of paid-off real estate but modest cash reserves can look asset-rich on paper and still come up short on an asset depletion file — because equity locked in a house isn’t cash a lender can convert into a monthly figure without a sale or a separate loan.
How the Math Actually Works
The mechanics are simple once you see them written out. A lender takes eligible liquid assets, subtracts what’s needed for the down payment and closing costs, and divides what’s left by a set number of months. That result becomes the borrower’s monthly qualifying income for the file.
The dividing number — the “divisor” — is a program design choice, not a fixed rule everyone follows. Through the wholesale programs Lendmire places files with, the asset allowance path typically divides remaining liquid assets by 36 months when the file is a supplement to other income and the debt-to-income ratio sits at or below 60%, by 60 months when that ratio runs higher, or by 84 months on a standalone asset file — or on any loan size above $3,500,000. Shorter divisors produce a bigger monthly income figure; longer divisors are the more conservative read, which is usually why lenders reach for them on larger loans.
This asset allowance structure is currently available on primary and second homes, capped at 80% loan-to-value on most files. It’s a supplemental or standalone qualification tool, not a separate loan product with its own rate sheet.
The Assets-Only Path
Some files skip income math altogether. Instead of calculating a monthly figure and running it through a debt-to-income test, an assets-only structure simply requires the borrower’s liquid U.S. assets to equal the loan amount, plus closing costs, plus sixty months of any documented net loss on other residential property they hold. No income figure gets calculated. No DTI ratio gets tested. The liquidity itself is the qualification.
This loan option usually suits a specific type of borrower — someone with strong, well-documented liquid assets who doesn’t want an income calculation to complicate their file. It’s not a way to skip underwriting. It’s a different underwriting approach designed for a particular kind of balance sheet.
Where the General Rule Breaks
The clean version of asset depletion — eligible assets divided by months, discount applied, done — has real exceptions worth knowing before an investor assumes their portfolio will qualify at face value.
Business funds usually don’t travel. Money sitting in an entity-titled account, even one the borrower controls, is frequently treated as off-limits for personal qualification. The concern is straightforward: those dollars may be needed to run the business, not to buy a house.
Trusts split into two categories. A revocable living trust generally works fine, since the borrower retains full control. Other trust structures — irrevocable trusts, third-party trusts — typically don’t count at all, because the borrower doesn’t have unrestricted access to the funds.
Unseasoned money gets discounted or excluded. A large deposit that shows up right before an application, without a documented paper trail, doesn’t automatically become qualifying liquidity. Lenders want to see money that’s been sitting, sourced, and seasoned — not money that just landed.
Unvested stock and cryptocurrency are hard excludes. Across the network Lendmire places files with, unvested equity compensation and digital currency don’t count toward asset depletion qualification at all, regardless of balance. The volatility and access restrictions on both make them a poor fit for a calculation built around stable, accessible liquidity.
Age 59½ is a real dividing line, not a rounding error. A borrower a few months short of that threshold can see a meaningfully lower qualifying figure on the exact same retirement balance a slightly older borrower holds. It’s worth checking birthdates against the application timeline before assuming a number.
Where DSCR Fits Into the Picture
For rental properties, the property’s own cash flow often matters more than the borrower’s bank statements. A DSCR loan is reviewed mainly based on whether the property’s rental income covers the payment, subject to lender guidelines. This is a completely different approach from asset depletion. Investors who don’t have enough liquid assets to qualify through asset depletion, but own a property that generates enough rent to cover its own costs, often find the DSCR loan a more direct option. Lendmire’s complete DSCR loans guide explains exactly how property-income qualification works. For a closer look at how the two loan types differ, see Lendmire’s DSCR loan vs. asset depletion loan comparison.
Because these are business-purpose investor loans, they’re reviewed differently from a standard owner-occupied mortgage — they’re exempt from the consumer disclosure timelines that apply to owner-occupied purchases.
Sizing the Loan Once the Assets Qualify
Once a borrower’s liquid assets clear the qualification test, the loan itself can run from $300,000 up to $30,000,000 through two separate wholesale channels — a portfolio non-QM program carrying files to $6,000,000, and a bank portfolio program that handles twelve-month statement or asset-based files up to $30,000,000 on its own ladder: typically 65% loan-to-value to $5,000,000, 60% to $10,000,000, and 55% up to $30,000,000, interest-only available at 60% or the band’s ceiling, whichever is lower. Leverage steps down as the loan gets bigger — a primary residence might see up to 90% at the smaller end of the size range, tightening as the balance climbs — and every file above $4,000,000 gets reviewed case by case before it’s even submitted, regardless of how strong the asset picture looks.
Credit typically needs to clear a 660 floor on the portfolio program, rising to 700 above the super-jumbo size threshold. Reserves generally run 3 months on smaller loans, 6 months into the mid-range, and 9 months above that — all subject to lender guidelines and full underwriting.
This type of loan often fits an investor who has a large, diversified brokerage account but only modest traditional employment income. Picture someone who built wealth through investments instead of a regular paycheck. A standard mortgage application, which relies on traditional income documents, doesn’t capture that person’s real ability to make payments. Asset depletion loans exist to solve this problem. Lendmire arranges these loans through select lenders in 40 markets, including Washington, D.C.
For deeper background on the mechanics discussed here, see OCC Bulletin 2019-36.
Frequently Asked Questions
Do I have to spend down my savings to use asset depletion? No. The calculation is notional — it estimates what your assets could generate as income, but you don’t liquidate anything to qualify. The assets simply need to be documented and verified as available.
Does my home equity count toward the asset total? No. Real estate equity sits outside this framework entirely. The calculation is built around liquid or near-liquid assets — cash, brokerage holdings, retirement funds — not net worth broadly.
Can I combine my job income with asset depletion income? Often, yes, depending on the program structure. Some files blend a calculated asset-income figure with other verified income and run a standard debt-to-income test; others use an assets-only structure that skips DTI altogether. Which structure applies depends on the specific lender and file.
Why do retirement accounts count for less than my checking account? Retirement funds carry access restrictions and, for borrowers under 59½, a tax penalty on early withdrawal. Lenders discount the balance to reflect that reduced liquidity rather than treating every account the same way.
Can I use this for a rental property instead of a primary home? The asset allowance structure described here currently applies to primary and second homes. Investors buying rental property more commonly use DSCR financing, which is reviewed on the property’s rental income instead of the borrower’s personal assets.
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 DSCR and non-QM mortgage brokerage with investor loan programs in 40 markets, including Washington, D.C. DSCR eligibility is commonly reviewed by the lender around property-level rent rather than personal income documentation, subject to lender guidelines, and the brokerage helps arrange financing for LLC-owned portfolios beyond conventional financed-property limits. Recognized by Scotsman Guide as a Top Mortgage Workplace in 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 Newsroom — What if I withdraw money from my IRA
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.
