Asset Depletion Mortgages In Illinois: Which Assets Count — The Quick Read: Asset depletion (sometimes called asset qualifier or asset dissipation) is an underwriting method that converts a borrower’s liquid assets into an imputed monthly income figure instead of relying on pay stubs or traditional personal-income documentation. Not every dollar in a brokerage or retirement account counts the same way — cash counts close to full value, securities and retirement funds get discounted, and business equity, unvested stock, and most trust assets generally don’t count at all. Which assets qualify, and at what percentage, is set by each lender’s own program guidelines rather than a single federal rule.
Illinois isn’t one of the 16 states where Lendmire holds a direct-to-consumer lending license. Those states are Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, and Washington. But an Illinois-based real estate investor isn’t out of options. If you want rental-property financing based on the property’s own income instead of your personal assets, Lendmire’s DSCR investor-loan network can help. It reaches a much broader footprint of 39 states plus Washington, D.C. This is a separate program with its own qualification logic. You can read about it in Lendmire’s complete DSCR loans guide. Still, it’s worth understanding how asset depletion works no matter where you live, since the same math shows up across the non-QM world.
Key Terms Defined
Asset depletion (asset dissipation): an underwriting method that divides a discounted pool of liquid assets by a set number of months to produce a monthly qualifying-income figure, used in place of — or alongside — W-2 or tax-return income.
Asset qualifier: a related structure, sometimes used interchangeably with asset depletion, that in some program variants skips a debt-to-income calculation entirely and instead tests whether liquid assets alone cover the loan balance plus costs.
Haircut (discount): the percentage reduction a lender applies to an asset class before it counts toward qualification — cash gets little or no haircut, retirement funds and securities get a bigger one because of tax exposure or price volatility.
Divisor: the number of months a lender divides the discounted asset total by to arrive at imputed monthly income. A shorter divisor produces a bigger monthly figure; a longer one produces a smaller, more conservative figure.
Seasoning: the requirement that funds sit in a verifiable account for a set period before an underwriter will count them, meant to screen out last-minute deposits.
How Underwriting Actually Treats This, Step By Step
That’s the room asset depletion programs operate inside, and it’s why the mechanics below vary lender to lender even though the sequence is consistent.
Step 1: Sort the balance sheet. Underwriters separate fully liquid accounts (checking, savings, money market, CDs) from securities (stocks, bonds, mutual funds) and retirement accounts (401(k), IRA, Keogh). Illiquid holdings — private business equity, real estate equity, unvested stock — generally get set aside entirely before the math even starts.
Step 2: Apply asset-class discounts. Cash counts near full value. Retirement funds and securities get discounted because of early-withdrawal tax exposure or market volatility. Across the wholesale programs Lendmire places files with, retirement accounts typically count at 70% of vested balance, stepping up to 80% once the borrower is 59½ or older — the age line that matters for early IRA withdrawal tax treatment under IRS rules, which impose a 10% additional tax on top of ordinary income tax for early distributions.
Step 3: Season and verify. Funds need recent statements and a track record in the account. A missing statement page or an unexplained large deposit is one of the fastest ways an otherwise-strong asset pool gets trimmed during underwriting.
Step 4: Convert to a monthly figure. The discounted total gets divided by a divisor. In the network Lendmire works with, the asset allowance path divides by 36 months when it’s supplementing other documented income and overall debt-to-income sits at or below 60%, by 60 months when it’s supplementing income above that 60% DTI threshold, or by 84 months when it’s standing alone or the loan amount exceeds $3,500,000. Longer divisors mean a smaller monthly figure and a more conservative file; shorter divisors move faster toward qualifying but ask more of the asset pool per dollar of loan.
Step 5: Run it through underwriting. The imputed figure either blends into a standard debt-to-income calculation alongside other income, or, on an assets-only structure, replaces DTI math entirely — qualification instead runs on whether liquid U.S. assets equal the loan amount plus closing costs plus sixty months of any net loss carried on other residential real estate the borrower owns.
Step 6: Confirm the funds aren’t double-counted. Underwriters check that the same dollars aren’t being claimed for down payment, closing costs, and reserves simultaneously. That’s a common point of confusion for borrowers who assume one large brokerage statement covers everything at once.
Which Assets Count — and Which Don’t
| Asset Type | Typical Treatment |
|---|---|
| Cash, checking, savings, CDs | Counted near full value |
| Stocks, bonds, mutual funds | Counted at a discount for volatility |
| Retirement accounts (under 59½) | Counted at roughly 70% of vested balance |
| Retirement accounts (59½ and older) | Counted at roughly 80% of vested balance |
| Revocable living trust assets | May count, with documentation of accessible ownership |
| Business operating accounts, gifts, other trusts, unvested stock, cryptocurrency | Generally excluded entirely |
That exclusion list matters as much as the eligible list. Business funds raise a continuity question. Pulling money out of an operating account can hurt the business itself, so lenders scrutinize or exclude it. Unvested restricted stock isn’t accessible, and inaccessible funds don’t count toward a method built entirely on accessible liquidity. Gifted funds and most non-revocable trust structures fall outside standard eligibility for the same reason — you can’t reliably convert them to cash on your own authority. There’s no single federal formula for this. The Consumer Financial Protection Bureau’s ability-to-repay framework requires lenders to weigh a borrower’s income or assets among several underwriting factors, but it doesn’t mandate a specific model for how that weighing happens.
The Structures and Variations
Not every “asset depletion” program is the same math. Across the wholesale network Lendmire shops, there are at least two structurally different products wearing similar names, and the difference matters more than the label:
- Asset allowance (supplemental). Liquid assets get divided by 36 or 60 months and blended into a standard debt-to-income calculation alongside other documented income, up to 80% loan-to-value on primary and second homes.
- Assets-only (standalone). No DTI calculation at all. Eligibility review depends on whether U.S. liquid assets equal the full loan amount plus closing costs plus sixty months of net loss on any other residential property the borrower carries — a materially higher liquidity bar than the supplemental path.
- Bank-statement income (a related but different tool). For self-employed borrowers whose traditional personal-income documentation understate real cash flow, deposits across 12 or 24 months of personal or business statements get run through an expense ratio instead of an asset divisor. Business account transfers into the borrower’s personal account count in full at 100%. This isn’t asset depletion, but the two get confused often enough that it’s worth naming the distinction plainly.
Leverage on these programs steps down as loan size climbs. On a primary residence, the ladder Lendmire’s wholesale network runs starts around 90% loan-to-value at the $300,000–$1,000,000 tier and works down through the mid-80s and mid-70s as size increases, dropping into the 60s once a loan crosses $4,000,000 — every figure above that line is reviewed case by case, not offered as a flat ceiling. Second homes and investment properties generally price roughly five points lower in loan-to-value at every size tier than a primary residence, subject to lender guidelines and full underwriting.
Above $4,000,000, everything moves to individual review before submission regardless of asset quality. That’s not a formality — it reflects how concentrated the risk gets when a single asset pool is backing an eight-figure mortgage.
For loans that outgrow the standard non-QM ceiling, a bank portfolio program in the network carries twelve-month-statement files to $30,000,000 on its own 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 tier’s own ceiling, whichever is lower. This program overlaps the standard non-QM ceiling between $4,000,000 and $6,000,000 before standing entirely on its own above that point.
Where the General Rule Breaks
The age line isn’t cosmetic. Take a borrower at 58 with a $600,000 IRA and a borrower at 61 with the same balance. They can end up with meaningfully different qualifying-income figures — purely because of the 59½ threshold tied to early-distribution tax treatment. The IRS addresses this same threshold in its list of exceptions to the early-withdrawal penalty.
Vesting is the other trap. A tech executive with a large restricted stock balance often assumes the whole account counts — it doesn’t, until the shares vest and become the borrower’s own liquid property. Same logic applies to unexercised options.
Business assets get treated more skeptically than personal assets across nearly every program, because pulling capital out of an active business raises a going-concern question underwriting isn’t built to answer with a bank statement alone.
The label confusion here is real. Marketing copy often uses “asset depletion” and “asset qualifier” interchangeably. But one blends into a DTI calculation, while the other replaces DTI math entirely with a straight liquidity test. The name on a rate sheet won’t tell you which math applies — only the actual guideline sheet will. That’s why it helps to work with a broker who reviews terms across multiple wholesale lenders, rather than sticking to one lender’s guidelines. This approach tends to surface the better fit for you.
Conventional lending draws a much narrower box here. Fannie Mae’s selling guide provisions on asset-based income require lenders to document that income is expected to continue for at least three years from the note date whenever it depends on asset depletion — a continuity test built for agency loans, not the broader non-QM market this article covers. Non-QM programs exist specifically to serve borrowers who don’t fit that narrower agency box.
What the Investor Decision Looks Like in Practice
For a real estate investor, asset depletion solves a personal financing problem, not a property one. You might be between business cycles, recently retired, or sitting on money from a liquidity event. In these cases, you may have thin documented income even though you carry real financial capacity. A DSCR loan works differently — it’s reviewed based on a rental property’s own rent-to-payment coverage. Asset depletion instead looks at your own qualification picture: where your down payment comes from, whether you meet reserve requirements, or your personal income on a non-investor transaction. It lets you do this without selling off a portfolio that’s still growing. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Credit floors on these programs typically run around 660 on the standard non-QM portfolio path. They step up to 700 above the super-jumbo line — past roughly $3,500,000 on a primary residence, or $3,000,000 on a second home or investment property. Reserve requirements typically run three months of housing payment on smaller loan amounts, six months on mid-range balances, and nine months above that. Add extra months for each other financed property you carry. Debt-to-income can run as high as 50% on the blended path. These are typical ranges from select wholesale-network guidelines, not universal figures. Every file still gets underwritten individually.
Frequently Asked Questions
Does my age really change how my retirement accounts are valued?
Yes. Retirement accounts commonly count at a lower percentage before age 59½ than after, since early withdrawals trigger the IRS’s additional 10% tax on top of ordinary income tax. Reaching that age threshold can meaningfully change a borrower’s qualifying-income figure even if the account balance stays flat.
Do I have to cash out my investments to use asset depletion?
No. The lender counts the discounted value toward a qualifying calculation without requiring a withdrawal, so a portfolio can stay invested and continue compounding through and after closing.
Is asset depletion the same thing as a DSCR loan?
No, and confusing them causes real problems. Asset depletion converts the borrower’s personal assets into imputed income; a DSCR loan is reviewed primarily on the property’s own rental income covering the payment, subject to lender guidelines. They solve different underwriting problems and aren’t typically stacked together on a single file.
What happens if my investment accounts drop in value while my loan is in process?
Because the qualifying figure is tied to a discounted asset balance, a meaningful market drop during underwriting can change the qualifying-income number before closing. Lenders generally re-verify balances close to closing, which is one reason volatile portfolios sometimes get a more conservative discount up front.
Can business account balances ever count toward asset depletion?
Generally no, or only very partially. Withdrawing funds from an active business raises questions about whether the business can keep operating, so most programs in Lendmire’s wholesale network exclude business operating funds or scrutinize them heavily rather than crediting them at face value.
Does your rental strategy in Illinois — or anywhere else — depend more on a property’s own income than on your personal assets? If so, Lendmire can help you compare DSCR loan options based on the property’s rental income, your credit profile, leverage, and your goals as an investor.
Investors who want the broader program framework can review how DSCR loans work.
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.
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your home or investment property. No commitment required.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. IRS — What if I withdraw money from my IRA?
2. IRS — Retirement topics: Exceptions to tax on early distributions
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.
