The Quick Read: A lender can count the same household portfolio three different ways, and the method it picks changes the income the file shows. Dividends count what the accounts already pay out. Withdrawals count what you already draw. Depletion converts a balance into notional monthly income without selling anything. Dividends suit people with a long, documented payout history. Withdrawals suit people already living off an IRA or 401(k). Depletion suits people who are asset-rich and income-light on paper.
Here is the plain version of who each method is for:
- Dividends and interest: the taxable brokerage account has paid for at least two years and will keep paying after closing.
- Withdrawals: you already take distributions, and enough is left in the account to keep them going.
- Depletion: the balance is large, the documented income is thin, and you would rather not set up a draw just to qualify.
- Not forced: none of the three requires you to liquidate the portfolio to apply.
- Lender-dependent: jumbo lenders write their own guidelines, so which methods are available depends on the program.
Jumbo payment estimate
The starting figures are an example price in the jumbo range with ten percent down on a thirty-year fixed. Replace them with yours.
Editable benchmark: 7.40% as of October 15, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a jumbo loan quote.
Illustrative starting assumptions: a $1,000,000 price in the jumbo range, ten percent down on the top-leverage lane, a thirty-year fixed structure at the current Freddie Mac conforming benchmark, and property taxes and insurance estimated at typical national rates. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conforming benchmark, a market reference and not a jumbo loan quote; jumbo rates are set by the lender and the lane at lock and differ from the conforming benchmark. An adjustable-rate scenario is shown at the benchmark for the whole term; the rate after the initial period is unknown. Reserve months and appraisal counts follow the lane sheet for the amount band; the automated finding may require more. Taxes, insurance and dues are editable estimates; closing costs are not included. On most lanes the conforming limit for the county decides whether a loan is jumbo at all; two lanes start at a stated dollar floor instead. Licensed in sixteen states for consumer mortgages.
Lendmire’s jumbo loan programs are arranged through wholesale lenders, and the income method is one of the first things to settle on a mixed-account file. It affects how the lender sees your debt-to-income ratio. It does not change the loan payment.
Side-by-Side
The table below compares the three methods on the factors that move a jumbo file. Leverage, credit floor and mortgage insurance come from the jumbo lane, not from the income method. Those rows are the same across all three columns.
| Factor | Dividends | Withdrawals | Depletion |
|---|---|---|---|
| What counts | Payouts already earned | Distributions already taken | Balance turned into income |
| Leverage | Set by the lane, up to 90% | Set by the lane, up to 90% | Set by the lane; some lenders cap lower |
| Credit floor | 660 decision score, headline lane | 660 decision score, headline lane | 660 decision score, headline lane |
| Mortgage insurance | Tied to lane and leverage | Tied to lane and leverage | Tied to lane and leverage |
| Occupancy | Primary or second home, by lane | Primary or second home, by lane | Often primary or second only |
| Documentation | Returns or statements, ownership | Receipt proof, account statements | Statements, ownership, access |
| Portfolio effect | Nothing sold | Cash leaves the account | Nothing sold |
Every figure is subject to lender guidelines and full file review. The 660 score and the leverage ceiling describe the headline lane. Other lanes stop at lower leverage.
A jumbo loan sits above the county’s conforming limit. Fannie Mae and Freddie Mac rules do not govern it directly. Jumbo lenders set their own guidelines, and many borrow the agency logic and add overlays. This article uses the agency guides as a neutral reference for how each method works. Read them as a benchmark, not as the jumbo rulebook.
Key Terms Defined
Mixed accounts: a household holding taxable brokerage accounts, such as stocks, bonds and mutual funds, plus retirement accounts such as IRAs and 401(k)s.
Documented income: money a lender can verify with traditional personal-income documentation, statements or award letters, not an estimate.
Continuance: proof that the income will likely last. For retirement withdrawals, that means enough balance remains to keep paying.
Depletion (assets as income): a qualifying calculation that divides eligible assets by a set number of months to create notional monthly income.
Reserves: liquid funds left after closing, measured in months of the full housing payment. On jumbo files they rise with the loan amount.
Decision score: the credit score the lender uses to make its decision on the file.
How Dividend and Interest Income Works
Dividend income is the cleanest method when the history exists. Fannie Mae’s guide on interest and dividend income asks for signed traditional personal-income documentation covering the two most recent years, or 24 months of account statements. The lender also verifies that you own the assets producing the income.
Two details matter on real files:
1. If the income is stable or rising, the agency method averages the two years. If it is falling, it uses the most recent year.
2. Funds used for the down payment or closing costs come out of the asset total before future dividends are projected. Cash that goes to closing stops paying dividends, and the math reflects that.
On a jumbo purchase, that second point catches people. A household may count the brokerage account as the down payment and also as the dividend source. The lender will not count it twice.
How Withdrawals Work
Withdrawals count what you already take from a 401(k), IRA or similar account. The test is continuance. Under Freddie Mac’s retirement income guidance, the lender documents that enough eligible retirement assets remain to support the income for at least three years. If one account is projected to run dry inside that window, other retirement accounts can be added to cover the gap.
Fannie Mae narrowed its three-year test to distributions from 401(k), IRA and Keogh accounts. It also lets eligible balances be combined and dropped the old 30% reduction on stocks, bonds and mutual funds held inside retirement accounts. If a source still applies that haircut, it is outdated against the agency guide.
Proof of current receipt usually means award letters, account statements, 1099s or bank statements showing the deposits. The borrower also needs penalty-free access to the funds. A borrower who is not yet drawing from the account has nothing for this method to count.
How Depletion Works
Depletion takes a different path. Nothing is withdrawn, and nothing has to be sold. In the agency version, Fannie Mae’s method for employment-related assets takes eligible assets, subtracts the penalty that would apply if the account were fully distributed, and divides the result by the loan’s amortization term in months. It carries lower leverage caps than a standard file, with a higher cap for older asset owners. It also covers only principal residences and second homes, and cash-out is limited.
Freddie Mac’s version has changed recently. It totals eligible assets, subtracts funds needed to close and certain excluded funds, and divides by a set number of months. Check the current guide before relying on any divisor you read online.
Jumbo lenders can use shorter periods or different discounts than the agencies. The divisor is the lever that swings the answer. Run the same portfolio through two divisors and the qualifying income can differ widely. On a jumbo file, ask which divisor the lender uses before you build a plan around the number.
When Dividends and Withdrawals Are the Better Fit
Documented income methods fit when the file already tells the story. The lender sees real deposits and real returns, which is easier to verify than a formula.
Dividends fit best when:
- The brokerage account has paid steadily for at least two years.
- The income is stable or rising.
- The dollars producing it are not also earmarked for the down payment or reserves.
- You would rather not lean on lender-specific depletion divisors.
Withdrawals fit best when:
- You are already drawing from an IRA or 401(k), for example through required distributions.
- Enough balance remains to meet the continuance test.
- You hold more than one retirement account that can be combined.
- You have penalty-free access and can show current receipt.
Say a retiree has a taxable account that has paid dividends for years and takes distributions from an IRA. Both streams are already on paper. The lender can count them as income, each with its own proof, and the file never needs a formula. Whether a lender will count both sources in the same file is lender-dependent. Ask before you assume it.
For a closer look at this exact choice for retired borrowers, Lendmire’s piece Dividends vs Withdrawals vs Asset Depletion for a Jumbo Loan Retiree covers the retiree angle.
When Depletion Is the Better Fit
Depletion fits when the documented income is thin and the balances are large. A recent sale, a retirement transition, a bonus year that will not repeat or an account that has not paid for two years can all leave the file light on income despite real wealth.
Depletion fits best when:
- Dividend history is short or uneven.
- You are not drawing from the retirement accounts yet and do not want to start.
- Balances are large compared with the loan.
- You want the portfolio left intact through closing.
The tradeoffs are real. Depletion is the method where lender policy matters most, because the divisor, the account discounts and the leverage caps are all the lender’s choice. The balance has to survive until closing, and a market drop between application and closing can shrink the income the file shows. The same dollars also cannot serve as down payment, reserves and income at once. The usual order is closing funds first, reserves second, then whatever remains counts toward income.
Jumbo loans carry reserves that scale with the amount, and some lanes ask for two appraisals above a threshold. Depletion files are asset-heavy by design, so reserves and the appraisal both get a close look. Lendmire’s explainer How Jumbo Loan Asset Depletion Rules Work for Mixed Accounts goes deeper on account sorting.
Sorting a Mixed Portfolio by Account
The three methods do not have to compete for the same account. A practical sort looks like this:
| Account type | Likely treatment |
|---|---|
| Taxable account with steady payouts | Dividends |
| IRA or 401(k) already paying out | Withdrawals |
| Retirement account not yet drawn | Depletion, if the lender allows |
| Cash and savings | Down payment and reserves first |
Combining methods in one file is lender-dependent. Some programs allow one method per file. Others let you count documented income from one account and depletion from another. Ask early, because the answer changes how you stage the cash.
Assets used for the down payment or reserves leave the pool that earns income or feeds the depletion math. A taxable account sold to fund the down payment generally needs a record of the sale and the funds arriving. Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
What Federal Law Says About All Three
Federal ability-to-repay rules apply to every consumer mortgage, jumbo included. The CFPB’s Regulation Z commentary says a lender may base its decision on income, on assets other than the home, or both. It also lists the assets a lender may consider, including savings, vested retirement funds, stocks and bonds. The lender verifies only what it relies on, with third-party records.
So the law permits all three methods and prescribes none of the math. The formula is the lender’s policy. That is why two lenders can return different answers on the same portfolio.
Common Mistakes on Mixed-Account Files
- Counting the same dollars three times. The down payment, the reserves and the income source cannot be the same money.
- Assuming jumbo follows agency rules. Agency guides are a benchmark. The lender’s own guidelines decide.
- Starting withdrawals just to qualify. Setting up a draw before applying adds tax cost and may not beat depletion. Weigh it with a tax professional.
- Skipping the ownership proof. Jointly held accounts and trust accounts need clear documentation.
- Ignoring balance swings. A drop between application and closing can change the file.
- Quoting an outdated haircut. The old 30% reduction on stocks inside retirement accounts has been removed in the agency guidance.
The Balanced Verdict
No method wins on every file. Documented income methods, dividends and withdrawals, rest on facts the lender can verify, so they suit borrowers with a clear payout history. Depletion rests on a formula, so it suits borrowers whose wealth shows up in balances rather than in a payout stream. The jumbo lane sets leverage, credit floor and reserves whichever method you choose. The method only changes how the income side looks.
The useful first step is to ask which method the lender will rely on. Because the lender verifies only one, that answer shapes which statements to gather and which accounts to leave alone.
Frequently Asked Questions
Do I have to sell investments or start withdrawals to use my accounts on a jumbo loan?
No. Dividend income counts what the account already pays, and depletion converts the balance into notional income without a sale. Only the withdrawal method needs an actual distribution stream.
Can I combine dividends, withdrawals and depletion on one file?
It depends on the lender. Some programs allow one method per file, and others let you document income from one account and use depletion for another. Ask before you stage your cash.
Do dividends always count as income?
Not automatically. Agency guidance asks for a two-year history, and funds used to close are removed first. If the income is falling, the lender may use the most recent year only.
Do retirement accounts count at full value?
Not always. Lenders may discount balances, subtract any penalty for a full distribution, and require penalty-free access. The old 30% reduction on stocks inside retirement accounts has been dropped from agency guidance, but jumbo lenders set their own treatment.
Which method gives the highest qualifying income?
It depends on the portfolio and the lender’s divisor. A long dividend history can beat depletion on one file, and large balances can beat thin dividends on another. Comparing the methods against the same statements is the only reliable way to tell.
Next Step
If you are buying a home and want to see whether a jumbo loan fits your file, Lendmire can help you compare the options and what each one asks of the file.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges FHA, VA, conventional and jumbo home purchase and refinance financing in 16 states through wholesale lenders. Every option is subject to the lender’s guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Selling Guide B3-3.4-08, Interest and Dividend Income
2. Freddie Mac Guide 5305.1, Retirement Income
3. Fannie Mae Selling Guide Announcement SEL-2020-07
4. Fannie Mae Selling Guide B3-3.4-06, Employment Related Assets as Qualifying Income
5. CFPB Regulation Z 1026.43 Official Commentary
This article is part of Lendmire’s jumbo loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Use a Jumbo Cash-Out on RSU Income to Pay Off a Margin Loan? · Can a Cash Buyer Get a Jumbo Cash-Out Within the First Year? · How to Prepare Accounts for an Electronically Verified Jumbo Cash-Out
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.