Asset Depletion Mortgages In Louisiana — The Quick Read: These loans turn a borrower’s savings, brokerage accounts, and retirement funds into a monthly qualifying income figure. No W-2s. No traditional personal-income documentation proving employment. The lender divides eligible assets by a set number of months and treats the result as income. In Louisiana, where landlord insurance runs among the highest in the country and vacancy sits above the national rate, that liquidity cushion often matters as much for reserves as it does for qualifying income itself.
Key Terms Defined
Asset depletion (or asset dissipation): a loan qualification method that converts verified liquid assets into a monthly income number, instead of using pay stubs or traditional personal-income documentation.
Depletion divisor: the number of months a lender divides total eligible assets by to produce that monthly income figure. A shorter divisor produces more qualifying income from the same asset pool.
Asset haircut: a discount applied to certain asset types — retirement accounts, brokerage holdings — to account for market risk, taxes, or early-withdrawal penalties before the divisor is applied.
Non-QM (non-qualified mortgage): a loan that doesn’t meet the standardized federal qualified-mortgage box, which gives lenders room to underwrite income, assets, and reserves in flexible ways.
Business-purpose loan: a loan made to finance an investment or rental property rather than a home the borrower lives in — this distinction matters for how the loan is regulated.
How the Math Actually Works
The calculation happens in four steps, and it never requires the borrower to spend a dollar.
First, the lender totals every eligible liquid asset — checking, savings, brokerage, retirement accounts. Second, it applies a haircut to anything that isn’t cash. Retirement funds in Lendmire’s wholesale network typically count at 70% of face value, stepping up to 80% once the borrower has cleared age 59½ and can access the money without penalty. Third, the lender subtracts the down payment, closing costs, and required reserves from what’s left. Fourth, it divides that remaining balance by the program’s divisor to produce a monthly qualifying figure.
The divisor is the single biggest variable across the industry, and it is why two borrowers with identical bank balances can walk away with very different loan sizes. A shorter divisor spreads the same pool of money over fewer months, producing a higher monthly income number. A longer divisor spreads it thinner. Through select lenders in Lendmire’s wholesale network, the asset allowance path typically divides by 36 months when it’s layered alongside other income and debt-to-income stays at or below 60%, by 60 months when debt-to-income runs higher, or by 84 months when it stands alone or the loan amount exceeds $3.5 million. None of these divisors are guaranteed on any given file — they reflect typical program structure, subject to underwriting.
The borrower never has to liquidate anything. The lender confirms the balance exists and could be accessed if needed. Everything past that is arithmetic, not a withdrawal plan.
The Structures That Actually Exist
Asset depletion isn’t one product — it’s a family of structures, and picking the wrong one is a common mistake.
Supplemental asset allowance. This layers asset-based income on top of other income sources — Social Security, pension, rental income, part-time wages. It’s the most common structure for retirees who have some income but not enough to qualify on their own.
Standalone asset qualification. Here, assets carry the entire file with no other income counted at all. This structure typically uses the longer 84-month divisor and applies to primary and second homes up to 80% loan-to-value through Lendmire’s network.
Assets-only, no-DTI qualification. This is the most conservative structure and the least common. It requires U.S.-based liquid assets equal to the full loan amount, plus closing costs, plus sixty months of any documented net loss on other residential property the borrower owns. There’s no debt-to-income calculation at all — the assets simply have to cover the exposure outright.
Credit still matters across every structure. Select lenders in the network typically look for a 660 credit floor on the portfolio program, 680 on the bank-statement portfolio ladder, and 700 once loan size crosses into super-jumbo territory. Debt-to-income can run as high as 50% where DTI is calculated at all. Reserve requirements scale with loan size — typically three months of payment reserves to $500,000, six months to $1.5 million, and nine months above that, plus two additional months for every other financed property an investor already holds, up to a twelve-month ceiling. First-time investors are often held to the full twelve months regardless of loan size.
Where the General Rule Breaks
The clean version of asset depletion — total assets, apply haircuts, divide, done — has real edges, and Louisiana investors run into most of them.
Real estate equity doesn’t count. This is the most common source of frustration for an investor whose net worth sits mostly in rental property. Equity is wealth, but it isn’t liquid, and asset depletion is built entirely on money that can theoretically be deployed month to month. An investor sitting on substantial equity across a few Louisiana rentals but light on cash reserves is often a better fit for a complete DSCR loans guide approach, where the property’s own rental income — not the borrower’s balance sheet — drives qualification.
Crypto, unvested stock, business funds, and most trusts don’t count either. Through Lendmire’s network, business account balances, gifted funds, trusts other than a revocable living trust, unvested equity, and cryptocurrency holdings are excluded from the eligible-asset pool entirely. An investor who assumes a large crypto position will help their file is usually disappointed.
Retirement age changes the math meaningfully. Under 59½, retirement funds typically count at 70% of value because of early-withdrawal exposure. Past that age, the haircut typically eases to 80%. It’s a modest difference on paper, but on a large IRA or 401(k) balance it can shift qualifying income by a real margin.
Super-jumbo files get reviewed case by case. Anything above $3.5 million on a primary residence, or $3 million on a second home or investment property, runs into tighter overlays: a 700 credit floor, 48-month seasoning on any credit event, no non-occupant co-borrowers, and cash-out proceeds that can’t be counted toward reserves. Every file above $4 million in Lendmire’s network goes through individual review before it’s ever submitted — there’s no flat leverage number that applies automatically at that size.
Louisiana’s Numbers Make Reserves Matter More
Louisiana carries carrying costs that squeeze rental cash flow harder than most states, and that changes how much weight an investor’s liquid asset position should carry in the file. According to Steadily’s guide to buying rental property in Louisiana, the state’s landlord insurance runs among the most expensive in the country, and properties in flood-prone parishes often need a second, separate flood policy on top of it. The same report puts Louisiana’s statewide rental vacancy rate at 11.1%, well above the national rate — meaning a rental sitting empty longer than expected is a real risk, not a hypothetical one.
None of that changes how asset depletion math works. What it changes is how an investor should think about reserves. A borrower whose liquid assets clear the qualifying threshold with room to spare — enough to also satisfy the full reserve requirement without straining the file — walks into underwriting in a stronger position than one who just barely clears the income number. In a market with above-average vacancy and elevated insurance exposure, that reserve cushion is doing real work, not just checking a box. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
The Investor Decision: Asset Depletion or DSCR?
For most Louisiana real estate investors, the honest answer is this: it depends on where the wealth sits. Asset depletion works well for someone with strong liquid savings. That means retirement accounts, brokerage holdings, or cash from a business sale. But it also means limited or unconventional income on paper. A DSCR loan works differently. It qualifies the property itself, based on whether the rent covers the mortgage payment. It doesn’t touch the borrower’s personal income or require traditional personal-income documentation at all. DSCR loans are business-purpose investor loans. That means they’re reviewed differently than a standard owner-occupied mortgage.
Picture an investor who already owns several rentals. They have equity but not much cash. This investor usually fits the DSCR path better. Here’s why: the property’s cash flow drives the lender’s review. The stricter liquidity math of asset depletion never enters the picture. Now picture a different investor. They have a large brokerage or retirement account, but they’re buying a first or second rental with thinner rental income. This investor might do better by layering asset depletion income onto the file. Or they could use it to shore up reserves alongside a DSCR purchase. Coastal high-net-worth markets face a similar split. The same tension shows up in how asset depletion gets used in Duck, North Carolina. There, seasonal rental income and liquid wealth often need to be weighed against each other, file by file.
Neither structure is universally better. The right question isn’t which program sounds stronger — it’s which one matches where this specific investor’s wealth actually lives: in a bank account, in a portfolio, or in a rent roll.
For deeper background on the mechanics discussed here, see Consumer Financial Protection Bureau — Ability-to-Repay/QM Rule.
Frequently Asked Questions
Do I have to sell my investments to qualify with asset depletion?
No. The lender documents that the balance exists and could be accessed if needed, then applies a formula to express it as monthly income. Nothing gets liquidated as part of qualifying.
Can I combine asset depletion with rental income from my Louisiana properties?
Often, yes — the supplemental asset allowance structure is built for exactly this, layering asset-based income with rental income, Social Security, or pension income rather than replacing it.
Does my home equity in Louisiana count toward asset depletion?
No. Real estate equity isn’t a liquid asset, so it’s excluded from every version of this calculation. If most of an investor’s net worth sits in property equity, a cash-out refinance or DSCR purchase loan is typically the better fit.
Is asset depletion only for retirees?
No, though retirees are common users of it. Business owners post-sale, high-net-worth self-employed borrowers, and investors with large brokerage accounts but irregular income all use asset depletion structures too.
How does Louisiana’s flood and insurance exposure affect an asset depletion file?
It doesn’t change the underwriting formula, but it raises the practical value of having reserves beyond the bare minimum, since higher carrying costs and above-average vacancy can strain a rental’s margin faster than in lower-cost states.
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
1. Steadily — Guide to Buying Rental Property in Louisiana
2. Consumer Financial Protection Bureau — Ability-to-Repay/QM Rule
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.
