The Quick Read: The check from a jumbo refinance equals the new loan, capped by loan-to-value and loan size, minus the payoff of every existing lien, closing costs, prepaids and escrows. A retiree reaches that number only if the verified portfolio, after haircuts and reserves, converts to enough imputed monthly income to carry the new payment.
- On an owner-occupied cash-out, the leverage ceiling is up to 80% LTV (75% with an accountant-prepared expense ratio), never the 90% purchase and rate-term ceiling on a primary residence.
- On an investment property, cash-out tops out around 75% LTV.
- Loan amounts across the network run from $125,000 to $3,500,000, and reserves commonly sit near 6 months of the housing payment.
- Cash taken out at this closing does not count as an eligible asset for the same loan.
- Whether an asset-depletion program allows cash-out at all varies by lender program sheet. Confirm that first.
Key Terms Defined
Cash-out refinance: a new, larger loan that pays off the old one and hands the borrower the difference in cash.
Jumbo: a loan above the conforming limit for the county. The current baseline limit for a one-unit home is $832,750, and the high-cost ceiling is $1,249,125, per an Orrick summary of the FHFA announcement. Loans above the applicable county limit are jumbo.
LTV: the loan balance divided by the appraised value.
Asset depletion: a method that treats a verified portfolio as if it were drawn down over a set period, producing imputed monthly income. Nothing is actually sold.
Reserves: liquid funds left after closing, measured in months of the housing payment.
DTI: monthly debts, including the new housing payment, divided by qualifying monthly income.
Haircut: the percentage of an account’s value a program will count, since stocks swing and retirement funds can carry withdrawal penalties.
How a Jumbo Cash-Out Release Is Calculated
The release is a subtraction problem with several ceilings, and the lowest ceiling wins. Most retirees assume the portfolio sets the number. Often it is the leverage cap or the loan-size cap instead.
Here is how a file gets sized:
1. Set the value. The appraisal sets the figure every percentage works from. A low appraisal cuts the release dollar for dollar.
2. Apply the cash-out LTV ceiling. On an owner-occupied home, primary or second, the network’s cash-out ceiling is up to 80% LTV with a fixed expense ratio, or 75% with an accountant-prepared ratio, depending on loan size and credit. On an investment property it is around 75%. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
3. Check the loan-size ceiling. Programs in the network run from $125,000 to $3,500,000. On very high-value homes this cap can bind before LTV does.
4. Subtract the payoff. Every existing lien comes off the top, including a second mortgage or HELOC.
5. Subtract costs. Closing costs, prepaids and escrow deposits come out of the proceeds.
6. Run the income test. The new payment, taxes, insurance and any HOA dues must fit the borrower’s qualifying income. For this borrower, income is the depletion figure plus any documented pension or Social Security.
7. Confirm reserves. Reserves commonly run around 6 months of the housing payment, and the cash-out check itself does not satisfy them.
The smallest result from steps 2, 3 and 6 is the loan. Subtract steps 4 and 5 and you have the release.
How Asset Depletion Turns a Portfolio Into Qualifying Income
The mechanics run in a fixed order, and most borrowers lose ground in the early steps.
1. List the liquid accounts. Cash, brokerage accounts and retirement accounts, all backed by statements. Home equity and business equity are generally treated as illiquid and left out.
2. Apply haircuts. Programs discount accounts that can lose value or carry penalties. Cash typically counts in full. Stocks, bonds and retirement funds count at a reduced percentage, and the percentage often depends on the owner’s age.
3. Take out what the deal consumes. Funds needed for closing, reserves and any pledged assets leave the pool before it converts to income.
4. Divide over a depletion period. The net pool is divided by a number of months set by the lender program. A shorter period produces more income. Halve the period and the same pool produces twice the income.
5. Add documented income. Pension, Social Security and annuity income can sit on top of depletion income. The same assets cannot be counted twice, so an annuity’s income cannot also be pooled as an asset.
6. Test the ratio. Imputed income goes into the DTI test against the full new housing payment and every other monthly debt.
Here is a general comparison of how asset types are usually treated. Exact percentages follow each lender’s program sheet.
| Asset type | Typical treatment | Common catch |
|---|---|---|
| Cash and savings | Counts at or near full value | Must be seasoned and documented |
| Stocks and bonds | Counts at a reduced share | Value moves with the market |
| Retirement accounts | Reduced share, age-dependent | Penalties before the program’s age line |
| Home or business equity | Generally excluded | Illiquid by definition |
| Cash-out proceeds | Never counted for this loan | Cannot qualify the loan that creates them |
Across the wholesale network, the divisor and the haircuts swing qualifying income more than any other input. Two lenders can look at identical statements and produce income that differs several-fold. A longer-divisor agency-style approach, for contrast, produces far less income from the same pool. That spread is why a retiree shops program sheets, not just pricing.
Can Depletion Income Support a Cash-Out?
Sometimes, and it depends on the program. Some asset-depletion programs are written for purchases and rate-and-term refinances only. Others permit cash-out with tighter leverage. Published guidance can look inconsistent for that reason, because each lender’s sheet sets its own rules, so a borrower should confirm cash-out eligibility against the specific program before planning around it.
What the network figures say: the asset-depletion route runs to about 80% LTV on a primary residence. The brokerage does not treat that figure as proof that depletion supports cash-out on every program. A broker checks the specific program sheet for cash-out eligibility before a file is built around it. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
The practical rule is simple. Ask for the program’s cash-out eligibility in writing before gathering statements.
A secondary path is documented income. A retiree whose IRA distributions, pension and investment income actually land in bank accounts can sometimes qualify on 12 months of statements, with qualifying income coming from deposit averages and lender-specific expense factors. That route is reviewed on documented income under the applicable program, subject to lender guidelines, and its owner-occupied cash-out ceiling is up to 80% LTV. For a retiree who spends from the portfolio each month, the deposits may tell a stronger story than the divisor does.
Worked Example: Reading the Release as Percentages
Run the numbers on a retired couple who own a primary residence appraised near $2,000,000. They want cash to buy a rental. These inputs are modeled assumptions, not market data.
- Existing liens: assume the payoff equals about 40% of the appraised value.
- Leverage ceiling: an owner-occupied cash-out at up to 80% LTV.
- Gross room before costs: the gap between the two, roughly 40% of value.
- Costs, prepaids, escrows: these come out of that room, so the net check is smaller.
- Income test: the new payment must fit inside depletion income plus Social Security and pension. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Now the second layer. Suppose the leverage ceiling says one number and the income test says a smaller one. The smaller loan governs, and the release shrinks with it. A couple with a large portfolio and a long divisor may find the income test binding. The same couple under a program with a shorter divisor may find leverage binding instead.
Now the depletion paradox. Take the release as cash and deposit it into the brokerage account, and the pool looks bigger. It does not help. Cash-out proceeds are not counted as an eligible asset on the loan that produced them. The pool is measured from what the borrower already had.
Reserves work the same way. Plan for them to come from assets that existed before closing.
Which Limit Binds First?
Which limit binds depends on the home’s value, the existing lien and the portfolio. This table shows where each one usually bites.
| Limit | What it caps | When it binds |
|---|---|---|
| Cash-out LTV | Loan versus appraised value | Homes with large existing liens |
| Loan-size ceiling | Total loan amount | Very high-value homes |
| Income and DTI test | Payment the income can carry | Thin pools or long divisors |
| Reserves | Cash left after closing | Portfolios mostly in illiquid assets |
| Appraisal | The value base itself | Light comps in the neighborhood |
A retiree with a modest lien on a mid-priced jumbo home usually hits the income test first. A retiree with a deep portfolio and a heavily leveraged mansion usually hits LTV first. Work out which one is yours before choosing a program.
Retiree Income Paths Compared
A retiree rarely has only one way to document a file. These are the main ones the network sees.
| Path | What counts | Main trade-off |
|---|---|---|
| Documented pension and Social Security | Verified benefit income | Often too small alone on a jumbo |
| Asset depletion | Net eligible pool over a set period | Cash-out eligibility varies by program |
| Bank statement | Deposit averages, 12 months | Deposits must show real flow |
| DSCR on a rental | The property’s rent versus its payment | Only for non-owner-occupied rentals |
The first two stack. Pension and Social Security can be added to depletion income. Bank statements are a separate route, and mixing methods in one file is a program-specific question. Lendmire’s network does not treat blending as automatic.
For retirees with rentals, the comparison of a DSCR loan against an asset-depletion loan is worth reading before choosing a lane.
Where the General Rule Breaks
Five edge cases account for most surprises on retiree files.
Home equity is not an asset for depletion. The rule that lets lenders look at assets rather than paychecks excludes the value of the dwelling securing the loan. The federal ability-to-repay text on income or assets, published by Cornell’s Legal Information Institute, says the lender must verify what it relies on with reasonably reliable third-party records. In practice that means statements, not estimates.
Occupancy decides the paperwork. A cash-out on a primary residence or second home is a consumer mortgage, and consumer disclosure rules, TRID included, apply. DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. The CFPB’s ability-to-repay provision frames the consumer side: a lender must make a reasonable, good-faith determination that the borrower can repay. Asset depletion is a tool for that consumer test. It has no role on a business-purpose rental loan.
Investment-property cash-out is a different ceiling. On a non-owner-occupied rental, cash-out tops out around 75% LTV, and the file is reviewed on the property’s own income. A retiree refinancing a rental should not apply the 80% owner-occupied figure to it. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Trust titling. Many retirees hold the home in a revocable trust. Whether a trust-vested consumer loan fits a given depletion program is a program-by-program question. Raise it before the appraisal is ordered.
Age and account type. Retirement accounts often carry a smaller haircut once the owner passes the program’s age line. A couple with one spouse over the line and one under is a common wrinkle. The lender sets the treatment.
What Can Derail the File
Most failed retiree cash-out files stall on documentation, not on the portfolio. Common derailers:
- Statements that do not match. Account balances that differ from what the application lists.
- Unseasoned deposits. Large recent transfers between accounts without a paper trail.
- Reserves that double count. The same account listed for both the depletion pool and the reserve requirement.
- Appraisal short of expectation. A light value shrinks every percentage tied to it. Appraisal reconsideration with recent in-neighborhood sales is routine and often recovers some of the gap.
- Title surprises. An old lien, a trust vesting issue or a recorded second that was never listed.
- Credit movement. A new account or a missed payment between application and closing.
Alternatives If Depletion Does Not Fit
A retiree who cannot use depletion for cash-out still has options.
Rate-and-term refinance. No cash comes out, so asset-depletion programs that exclude cash-out may still work. On a primary residence, rate-and-term leverage through select lenders can reach up to 90% LTV, subject to lender guidelines. That figure is not a cash-out ceiling.
Bank statement cash-out. For a retiree whose distributions show up as deposits, a bank statement program may allow up to 80% LTV on an owner-occupied cash-out. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
DSCR on the rental itself. If the goal is leverage on a rental the retiree already owns, a loan that qualifies primarily on property-level rental income covering the payment, subject to lender guidelines, avoids the personal DTI test. Some programs below 1.00 coverage are available through select lenders, but LTV and terms adjust. Details sit in Lendmire’s complete DSCR loans guide.
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 investments to qualify on asset depletion?
No. The portfolio is a qualifying measure. It stays invested, and nothing has to be liquidated to satisfy the loan, though reserves and closing funds do have to be available.
Can the cash I take out count toward reserves?
Generally not. Cash-out proceeds are not treated as an eligible asset for the loan that creates them, so reserves should come from assets already in the file. Confirm the treatment on the specific program sheet.
Does age change how my retirement accounts count?
Often, yes. Many programs apply a smaller haircut once the account owner reaches the program’s age line, and a larger one before it. The exact percentages are lender-specific, so ask for the sheet.
What is the highest LTV on a retiree cash-out?
On an owner-occupied cash-out, up to 80% LTV with a fixed expense ratio, or 75% with an accountant-prepared ratio, depending on loan size and credit. On an investment property, around 75%. The 90% ceiling applies to primary-residence purchases and rate-and-term refinances only. Leverage and reserves vary by lender and program; the final terms follow the full file review.
Can a retiree use bank statements instead?
Yes, when distributions and benefits are deposited consistently. The loan is reviewed on documented income under the applicable program, subject to lender guidelines, using 12 months of statements and deposit averaging with lender expense factors.
Next Step
If you are retired and want to see how the numbers work, Lendmire can help you compare asset-depletion options, and bank statement options where deposits tell the stronger story, based on your portfolio, the property, credit profile, leverage and your goals. The brokerage arranges these consumer loans through select lenders in its wholesale network, and its consumer mortgage licensing covers 16 states, so availability depends on where the home sits. Qualification is subject to lender guidelines, and nothing here is a commitment to lend.
A retiree’s real constraint is rarely the size of the portfolio. It is which program sheet turns that portfolio into income, and whether that sheet allows cash-out at all.
For current guidelines and terms, see Lendmire’s DSCR loan programs page.
About Lendmire
Lendmire is a non-QM mortgage brokerage (NMLS# 2371349) that arranges asset-depletion and bank statement home loans for retirees, self-employed borrowers and other borrowers with documented income, through select lenders in its wholesale network. Its consumer mortgage licensing covers 16 states. These loans qualify on documented income under the applicable program, subject to lender guidelines, and every file is underwritten individually. Recognized as a Scotsman Guide Top Mortgage Workplace in 2025 and 2026.
For the mechanics of pulling equity out of a rental property, see Lendmire’s guide to cash-out refinance on an investment property.
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References
1. Orrick InfoBytes, FHFA conforming loan limits
2. Cornell Legal Information Institute, 12 CFR 1026.43
3. CFPB, 12 CFR 1026.43 ability-to-repay provision
This article is part of Lendmire’s self-employed mortgage guides — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Use Asset Depletion for a Jumbo Cash-Out in Retirement · How Much Equity Jumbo Cash-Out Leaves an Asset-Depletion Retiree · Jumbo Cash-Out Asset Depletion Documentation for an Asset-Rich Retiree
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.