The Quick Read: The two options qualify you on different things. An asset depletion loan counts your balances, either against the whole loan or as monthly income. A conventional loan that uses employment-related assets counts only a narrow set of employment-linked accounts and lump sums. Which one fits depends on the property you are buying and on what you actually own.
- Assets cover the loan outright. On the asset qualifier path, eligible assets must equal or exceed the entire loan amount, and no employment or income is documented.
- Assets become income. On the asset depletion path, usable assets are divided by 60 months to create a monthly qualifying income, which then runs through the debt-to-income test.
- Conventional is narrow. Fannie Mae’s employment-related assets policy applies to a principal residence or second home, so it does not fit a rental purchase.
- Stock compensation is the trap. Non-vested restricted stock units and stock options are not eligible on the depletion path, though vested shares in a brokerage account can count.
- Documentation still exists. Assets are documented on every path. Asset-based does not mean no paperwork.
The Honest Answer
Choose asset depletion if your balances are large, your documented income is thin, or the property is an investment property. Choose a conventional loan if your income already documents cleanly, or if you are drawing a steady stream from an employment-related account and buying a home you will live in. Many borrowers fit both, and then the decision comes down to leverage, paperwork, and how much of your portfolio you want counted.
Lendmire is a broker. It arranges asset-based mortgages through select lenders in its wholesale network, and every file is subject to underwriting. Its consumer mortgage lending is licensed in 16 states. The conventional column below shows published industry norms, and Lendmire’s network can place either kind of loan.
Key Terms Defined
Asset qualifier path: the route where eligible assets, after the credit percentages, must equal or exceed the entire loan. No employment or income is documented.
Asset depletion path: the route where eligible assets, after haircuts, are divided by 60 months into a monthly income. That income must carry the housing payment and your other debts.
Haircut: the share of an account’s balance a lender refuses to count, because the balance can move or carry penalties.
Employment-related assets: in conventional guidelines, a defined set of assets tied to work. Examples are retirement accounts you can access and lump sums from a severance or retirement package for a non-self-employed borrower.
Seasoning: how long funds must sit in your account, shown on statements, before a lender counts them.
Debt-to-income (DTI): your monthly debts, including the new housing payment, compared with your monthly income.
Side-by-Side
The table shows the Lendmire network’s two asset-based paths next to published industry norms for the conventional route. All figures are ceilings, floors, or typical ranges, not offers, and are subject to underwriting.
| Factor | Asset Qualifier Path | Asset Depletion Path | Conventional (industry norms) |
|---|---|---|---|
| Review basis | Assets cover the whole loan | Assets ÷ 60 months = income | Income from a defined asset stream |
| Income documented | None; assets are documented | Derived income, DTI test | Derived stream plus DTI |
| Assets counted | Brokerage, CDs, savings at 100% | Cash 100%, securities 80% | Specified employment-related assets |
| Property use | Primary, second home | Primary, second, investment | Primary, second home only |
| Leverage | 80% purchase, 75% refinance | Primary/second: 80% purchase, 60% cash-out | 70% max, or 80% if asset owner is 62+ |
| Seasoning | 60 days, two statements | Statements 120 days old plus one in 45 days | Assets documented per the Guide |
| Reserves | None at or below 75% LTV | No published reserve months | Set by agency and lender rules |
| Vesting | Individual borrower | Individual borrower | Assets owned by borrower or co-borrower |
The qualifier path’s 75% refinance figure applies to a principal residence or second home. The depletion path’s investment property ceilings are 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Cash-out proceeds never count as qualifying assets on the depletion path. The conventional leverage figures come from Fannie Mae’s Selling Guide. That policy covers purchases and limited cash-out refinances only.
Asset-based consumer loans are written to individual borrowers. Loans to LLC-titled entities generally belong to business-purpose financing, subject to lender program eligibility.
How the Math Differs
The qualifier path asks one question: do your counted assets equal the loan? Say you want an $800,000 loan. You hold $330,000 in brokerage accounts, which count at 100%. You hold $300,000 in a 401(k) while under age 59½, which counts at 90%, or $270,000. You also hold $200,000 in savings at 100%. That adds up to $800,000 of usable assets, so the file is reviewed on assets alone, subject to underwriting. Credit still matters, with a 600 minimum score on this path.
The depletion path turns assets into a paycheck. Take $1,500,000 in securities, which count at 80%, or $1,200,000. Add $300,000 in cash at 100%. That is $1,500,000 usable. Divided by 60 months, it produces $25,000 of monthly qualifying income. That income must then carry the housing payment and your other debts. Lender guidelines and the lender’s own calculation govern the final result.
Retirement accounts illustrate the gap between paths. On the qualifier path, 401(k) and IRA balances count at 90% under age 59½ and 100% after. On the depletion path, they count at 70% at any age.
The conventional route works differently. It starts from a specific account or lump sum and derives an income stream from it. It does not pool your whole portfolio. If a distribution penalty would apply, the Guide subtracts the penalty on a complete distribution, after transaction costs, to arrive at the income stream.
Whichever path you take, the lender verifies assets from third-party records. Federal ability-to-repay rules require this for any income or assets a lender relies on, per 12 CFR 1026.43 on eCFR. That is why statements, not traditional personal-income documentation, become your core paperwork.
What Counts as an Employment-Related Asset?
Conventional guidelines sort assets by one test: is the money tied to your work? A mortgage-insurer training deck from Enact MI lists retirement accounts the borrower can access and lump sums from a non-self-employed severance or retirement package. Fannie Mae’s Guide adds that assets outside these parameters may still count under other standard income rules, such as interest and dividends or pension and retirement income.
Asset depletion in Lendmire’s network sorts by a different test: is the money seasoned, owned, and unrestricted? Here is how common work-related holdings land:
- 401(k) and IRA balances: these count at 90% under 59½ and 100% after on the qualifier path. They count at 70% on the depletion path.
- Vested shares in a brokerage account: these count as securities. On the depletion path that means 80%, and on the qualifier path brokerage accounts count at 100%.
- Non-vested restricted stock units and stock options: not eligible on the depletion path.
- Deferred compensation: not eligible on the depletion path.
- Severance or lump sums: once they sit in a regulated cash account, the lender reviews the source and the seasoning. Sale-of-business, inheritance, and legal-settlement funds are excused from the depletion path’s seasoning rule.
- Cryptocurrency, precious metals, and collectibles: not published as eligible on either path. The documented route is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Moving money mid-file is a common stumble. A lump sum that lands in a new account may need fresh seasoning. For account-type treatment, see Lendmire’s piece Retirement Assets vs Liquid Assets in Asset Depletion Qualifying.
Across our wholesale network, the strongest files have clean paper trails. The borrower can point to each account, show two consistent months of statements, and explain any large deposit. Programs that look similar on paper often differ in which accounts they accept, so the same portfolio can score very differently from lender to lender.
When Asset Depletion Is the Better Fit
Asset depletion fits when your wealth is large and your documented income is not. Typical profiles are retirees, people who sold a business, heirs, early-retired professionals, and households living off a portfolio.
It also fits when the property is an investment property. The depletion path allows investment property at up to 65% on a purchase or rate-and-term refinance. Conventional employment-related-asset rules, as published by Fannie Mae, exclude that occupancy.
The qualifier path suits a cash-rich buyer whose accounts can cover the whole loan. Loans reach $4,000,000 on that path. No reserves are required at or below 75% loan-to-value, and above that the lender sets them. A first-time investor on the depletion path needs a 700 score, while the lender’s matrix governs everyone else’s.
The depletion path has its own hurdles. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When asset depletion is your only income source, you also need at least $250,000 in liquid assets. Loan amounts run from $125,000 to $3,500,000. Derived income may supplement documented income up to a 45% debt-to-income ratio, and in that case the minimum-assets rule is waived.
The tradeoff is real. Asset-based qualification keeps a large share of your portfolio tied up in the file, and haircuts shrink what counts. Only you can decide whether that fits your plans. Tax treatment varies; consult a qualified professional.
When Conventional Is the Better Fit
Conventional is the better fit when your income already documents cleanly. A borrower with steady pay or a pension has little reason to convert a portfolio into income.
It also fits when you are drawing from an account that conventional rules understand. Under the Guide, a retiree already taking pension, annuity, or retirement distributions may qualify on that income directly. A borrower with a severance or retirement lump sum, buying a principal residence or second home, may fit the employment-related-assets policy.
The limits are firm. Published norms cover purchase and limited cash-out refinance only. They cover principal residence and second home only. Fannie Mae’s Guide caps leverage at 70%, or 80% if the asset owner is 62 or older. Assets must belong to you, or the co-owner must be a co-borrower. If a penalty would apply to a full distribution, it reduces the income you can use. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
A conventional loan can also make sense when you want a standard, widely understood file. Lenders know how to review it, and your portfolio does not need to be as large as the depletion path’s minimums imply. These are general industry norms. Each lender sets its own overlays, so confirm what yours requires.
What About a Pure Rental Purchase?
If you are buying a rental you will not live in, neither route above is usually the first place to look. The conventional employment-asset policy excludes investment property. Asset depletion allows it, but only at the lower 65% and 60% ceilings for investment property.
That is where DSCR loans come in. They 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. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines, so your personal portfolio is not the test. Lendmire’s complete DSCR loans guide covers how the ratio works and when it fits better than an asset-based file.
The Balanced Verdict
Neither option wins on its own. Conventional wins when your income is documentable and the property is a home you will live in. Asset depletion wins when your balances are strong, your income is light, or the property is an investment. For a rental purchase alone, DSCR may be the cleaner fit.
Choose by what you hold and what you are buying. If your assets cover the whole loan, the qualifier path asks the least of your income history. If assets must stand in for a paycheck, the depletion path’s 60-month divisor and haircuts decide how much income you get. If you hold mostly unvested equity, the depletion path does not count it yet, so wait until it vests and seasons.
Frequently Asked Questions
Is asset depletion a conventional loan?
No. Conventional usually means an agency-style loan, and its asset policy is limited to specified employment-related assets. Asset depletion is a separate asset-based program, placed through select lenders in Lendmire’s network and underwritten individually.
Can I use unvested RSUs or stock options?
Not on the depletion path. Non-vested restricted stock units and stock options are ineligible. Once shares vest and land in a brokerage account, they can count as securities, subject to seasoning and underwriting.
Does my 401(k) count under both options?
It counts, but differently. On the qualifier path it counts at 90% under age 59½ and 100% at 59½ or older. On the depletion path it counts at 70% at any age. Conventional guidelines treat it as an employment-related asset and subtract any distribution penalty.
Can I buy a rental with a conventional employment-related-assets loan?
Published norms say no. Fannie Mae’s policy is limited to a principal residence or second home. Asset depletion in Lendmire’s network allows investment property at 65% on a purchase or rate-and-term refinance, and a DSCR loan is the business-purpose alternative.
Do I still have to document my assets?
Yes. The qualifier path needs 60 days of seasoning and two months of statements per account. The depletion path wants statements at least 120 days old plus a recent one within 45 days. Lenders verify the assets they rely on.
Compare Both Paths With Your Statements
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. Final eligibility rests with the lender, and this article is not a commitment to lend.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving self-employed and high-net-worth borrowers in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Selling Guide B3-3.4-06, Employment Related Assets as Qualifying Income
3. Enact MI, Assets and Repayment Obligations training deck
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 to Document a Bank Statement, 1099 or Asset Depletion Loan · How Much Do You Need in Assets for an Asset Depletion Loan? · How to Qualify for an Asset Depletion Jumbo Loan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.