The Quick Read: Usually, non-QM asset depletion counts more of your assets, because it accepts cash, securities, and retirement balances at set percentages, while Fannie Mae’s version counts only employment-related assets and caps leverage lower, though Fannie can fit better when you have documented income and want a conventional owner-occupied loan.
- Non-QM has two paths: assets that cover the whole loan, or assets converted into monthly income.
- Fannie Mae’s method is limited to principal residences and second homes. It is not available for a rental purchase.
- Ordinary brokerage and bank balances often do not count under Fannie’s method unless they trace to an employment source.
- Under non-QM depletion, a brokerage portfolio can count at 80% and cash at 100%, through select programs and subject to underwriting.
The Honest Answer on Who Each Is For
Fannie Mae’s asset method is for a borrower who is retiring or changing jobs and holds a 401(k), IRA, or severance package. They want a standard agency loan on a home they will live in. It rewards clean paperwork on a narrow set of accounts.
Non-QM asset depletion is for the cash-heavy, income-light borrower. Think of a retiree living on a portfolio, someone who just sold a business, or a household that received an inheritance. Their balances are large and their documented income is small. Across the wholesale network Lendmire works with, this is the borrower who gets turned away elsewhere, not because the money is missing but because the income line is.
Neither option is better in the abstract. The right one depends on what you own, what you are buying, and whether you can document income at all.
Side-by-Side
The Fannie Mae column reflects published agency rules. The non-QM column reflects typical guidelines on select programs in Lendmire’s network, subject to underwriting.
| Factor | Fannie Mae | Non-QM Asset Depletion |
|---|---|---|
| Review basis | Assets added to income, then DTI | Assets alone, or assets turned into income |
| Which assets count | Employment-related assets | Cash, CDs, securities, retirement, more |
| Property use | Primary and second home | Primary, second home, investment (depletion path) |
| Loan purpose | Purchase, limited cash-out refi | Purchase and refinance; cash-out at lower leverage |
| Leverage | 70%, or 80% at age 62+ | 80% purchase on a home; 65% on investment property |
| Documentation | Employer letters, 1099-R, statements | Statements; no income documented on one path |
| Entity vesting | Assets must be borrower-owned | Varies by program; confirm per file |
| Reserves | Deducted before dividing | Qualifier: none at 75% LTV or below |
Read that table with one caution. The two sides are not mirror images, and each row has exceptions. The sections below explain them.
How Each Method Turns Assets Into Qualifying Power
Start with Fannie Mae. Under Fannie Mae’s Selling Guide topic on employment-related assets, the method applies to purchases and limited cash-out refinances. The home must be a principal residence or second home. A rental investment property is outside the policy. The guide also requires the assets to be owned by the borrower, or a co-owner must be a co-borrower. If a penalty would apply to a full withdrawal today, that penalty comes off the balance first.
The rule’s name tells you the catch: employment-related. A mortgage insurer’s training material summarizes the eligible group as severance or lump-sum retirement distributions documented with an employer letter and a 1099-R, plus 401(k), IRA, SEP, and Keogh accounts the borrower can access. An ordinary brokerage account or bank balance is generally left out unless it traces back to one of those sources. As commonly described, the usable total is reduced by the down payment, closing costs, and reserves, divided over the loan term, and added to income for the debt-to-income test.
Non-QM runs on two separate paths. You are qualified on one path at a time, and the figures never blend.
Asset qualifier path. Your eligible assets, after the credit percentages below, must equal or exceed the entire loan amount. No employment or income is documented. Brokerage accounts, CDs, money market, and savings count at 100%. A 401(k) or IRA counts at 90% under age 59½ and at 100% at 59½ or older. Accounts combine. Leverage runs up to 80% on a purchase and 75% on a refinance, on a principal residence or second home, with loans up to $4,000,000.
Asset depletion path. Usable assets, after haircuts, are divided by 60 months. That becomes monthly qualifying income, and it must carry the housing payment and other debts through the debt-to-income test. Cash and CDs count at 100%, securities at 80%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%. Loans run from $125,000 to $3,500,000.
Here is the sanctioned shape of the depletion math. Say you hold $1,500,000 in securities and $300,000 in cash. Securities at 80% count as $1,200,000. Cash at 100% counts as $300,000. That is $1,500,000 of usable assets, divided by 60 months, for $25,000 of monthly qualifying income. The qualifier math is simpler. An $800,000 loan with $330,000 in brokerage accounts, $300,000 in a 401(k) under 59½ (counted at 90%, or $270,000), and $200,000 in savings counts $800,000 of usable assets. That is reviewed on assets alone. Both examples are illustrative, and the lender’s own calculation governs.
Which Assets Actually Count
This is where the two sides split most sharply.
Under Fannie Mae’s method, the answer is narrow. Retirement accounts you can access count. Qualifying lump sums with an employer letter count. A plain taxable brokerage account usually does not, and savings sitting in a bank usually do not either. That matters, because many asset-rich borrowers hold most of their wealth in exactly those accounts.
Under non-QM depletion, the list is wider. Cash, CDs, securities, private stock, retirement accounts, and real-estate equity all count at a percentage. A few categories are excluded: custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options, and unvested restricted stock units. Cryptocurrency, precious metals, and collectibles are not published as eligible on either non-QM path. The documented route is to convert them into a seasoned cash balance in a regulated account, with the lender reviewing the source.
One more distinction trips people up. A retirement account is counted differently on each side. Fannie nets out any early-withdrawal penalty. Non-QM applies a flat percentage and does not require you to liquidate anything. You keep the money. The haircut is only a conservative valuation. If you are weighing retirement against taxable money, Lendmire’s guide Asset Depletion Mortgage Rules for Retirement vs Liquid Assets covers the tradeoffs. Tax treatment varies; consult a qualified professional before moving funds.
When Fannie Mae Is the Better Fit
Fannie Mae wins when you have other income and a clean employment-related asset story. Here is when that looks like you.
- You are retiring and your wealth sits in a 401(k) or IRA. The method was built for this. Retirement balances you can access fit the rule, and the paperwork is familiar.
- You are 62 or older. Fannie raises its maximum LTV from 70% to 80% for an asset owner at least 62 at closing, a tier added in Fannie Mae’s Announcement SEL-2018-08. If the assets are jointly owned, all owners must be borrowers.
- You have Social Security, a pension, or other income too. Assets can fill a gap rather than carry the whole file. Fannie also has fallback topics for interest, dividends, and annuity or pension income if a loan misses the asset parameters.
- You want a conventional owner-occupied loan and your file is simple. Fewer moving parts can mean a smoother file.
- You received a severance package. An employer letter plus a 1099-R is a well-worn path.
The tradeoff is rigidity. The rule is narrow, leverage is lower, and a rental purchase is out. If the asset you hold does not trace to an employment source, the method may not help you at all.
When Non-QM Asset Depletion Is the Better Fit
Non-QM wins when your balance sheet is strong and your income line is weak or undocumented. That describes a lot of retirees and sellers.
- Your wealth sits in brokerage, cash, or CDs. Those count at 80% to 100% on the depletion path, and at 100% on the qualifier path. Fannie’s method would likely ignore them.
- You want no income documented. On the asset qualifier path, no employment or income is documented, and the file rests on assets alone. Be clear on this: the assets themselves are fully documented. Seasoning is 60 days, with two months of statements for each qualifying account.
- You are buying an investment property and want to qualify on personal assets. The depletion path allows it, at up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out, on investment property. If the rental itself carries the payment and you would rather qualify on property income, read the complete DSCR loans guide to compare that route.
- You want higher leverage on a home. Depletion reaches 80% on a purchase or rate-and-term refinance on a principal residence or second home, with 60% on a cash-out. Cash-out proceeds never count as qualifying assets.
- You just sold a business or received an inheritance or settlement. Those funds are excused from the depletion path’s statement-age requirement, though the lender still reviews the source.
Now the costs of this route. The depletion path has real minimums: qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 liquid when asset depletion is your only income source. Statements must be at least 120 days old at application, plus a recent one within 45 days. A first-time investor on the depletion path needs a 700 score. Otherwise credit follows the lender’s matrix, and the qualifier path has a 600 floor. Housing history is expected to be clean, and a housing event needs four years of seasoning on the depletion path. Pricing and terms differ from agency loans, and every file is underwritten individually.
One Practitioner Observation
Across the programs Lendmire places files with, the borrower who struggles most is rarely short of assets. It is the one whose assets sit in the wrong place. Someone with a large taxable brokerage account and a small IRA looks very different under each method. That is why the first conversation is always about account types and ownership, not net worth.
Key Terms Defined
Asset qualifier path: A non-QM route where eligible assets must cover the entire loan amount, and no income is documented.
Asset depletion path: A non-QM route where usable assets divided by 60 months become monthly qualifying income.
Haircut: The percentage of an asset’s balance that a lender counts. A securities account counted at 80% has a 20% haircut.
Seasoning: How long funds must sit in an account, shown by statements, before they count.
Debt-to-income (DTI): Your monthly debts divided by your monthly income, including the new housing payment.
Employment-related assets: Fannie Mae’s term for retirement accounts and employment lump sums, such as severance, that can be turned into qualifying income.
The Verdict
If you hold mostly retirement accounts, plan to live in the home, and have other income to pair with them, Fannie Mae’s method is worth a look first. It is narrow, but it is familiar. If your wealth is in brokerage, cash, or CDs, or you want to buy an investment property on personal assets, non-QM asset depletion counts more of what you own. That is not a claim that non-QM is better. It means the method fits a wider set of balance sheets, at the cost of minimum asset thresholds and lender-specific terms.
Sometimes it is a genuine toss-up. A 63-year-old with a large IRA and a modest home purchase could go either way. The deciding factors are leverage, how much other income exists, and whether anything about the file is unusual.
If you are qualifying on assets rather than income and want to see how the numbers work, Lendmire can help you compare asset-based mortgage options based on your statements, the property, credit profile, leverage, and your goals. Lendmire is licensed for consumer mortgage lending in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, and Washington. Lendmire is a broker, and loans are placed through select lenders subject to underwriting.
Frequently Asked Questions
Can I use non-QM asset depletion together with other income?
Yes, on the depletion path. Asset-derived income can supplement documented income up to a 45% debt-to-income ratio, and when it supplements, the minimum-assets rule is waived. On the qualifier path, no income is documented at all.
Do I have to sell my investments or drain my accounts?
No. The haircut is a conservative way of valuing what you hold. You keep the assets, and the lender documents them through statements.
Does cryptocurrency count under either method?
Not directly. Crypto is not published as eligible on either non-QM path, and Fannie Mae’s method is limited to employment-related assets. The documented route is to convert it to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Can I use Fannie Mae’s asset method to buy a rental?
No. The policy is limited to principal residences and second homes. For an investment property, non-QM asset depletion is one option, and a DSCR loan, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines, is another.
Is a 401(k) treated the same on both sides?
No. Fannie Mae counts access to the account and subtracts any penalty that would apply to a full withdrawal. Non-QM applies a percentage: 90% under age 59½ and 100% at 59½ or older on the qualifier path, and 70% at any age on the depletion path.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges bank statement, P&L-only, 1099-only and asset-based home financing in 16 states through wholesale lenders, on primary residences, second homes and investment properties. 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: Employment Related Assets as Qualifying Income
2. Enact MI training presentation on assets and repayment obligations
3. Fannie Mae Selling Guide Announcement SEL-2018-08
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How Asset Depletion Income Is Calculated From Your Portfolio · How Much Do You Need in Assets for an Asset Depletion Loan? · Do Cash-Out Proceeds Count as Assets on an Asset Depletion Refinance?
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.