The Quick Read: Your ceiling depends on the path, the occupancy and the loan purpose, and the strictest cap wins. On a principal residence or second home, the asset qualifier path reaches 80% on a purchase and 75% on a refinance, while the asset depletion path reaches 80% on a purchase and 60% on a cash-out. Investment property is available only on the depletion path. All figures are ceilings through select programs, subject to underwriting.
- Asset qualifier path: your eligible assets must cover the entire loan, and no employment or income is documented.
- Asset depletion path: usable assets divided by 60 months become qualifying income that runs through the debt-to-income test.
- Occupancy: investment property gets 65% on a purchase or rate-and-term refinance and 60% on a cash-out, on the depletion path only.
- One path at a time: a borrower is qualified on one path per file, never a blend of the two.
- Documents: assets are always documented, so this is never a no-documentation loan.
What Is an Asset-Based Mortgage, and Which Path Fits You?
An asset-based mortgage is reviewed around what you own rather than what you earn. It fits people with large balances and small documented income: retirees, business sellers, heirs, early-retired professionals and households living off a portfolio. Lendmire, a mortgage broker, places these files through select lenders in its wholesale network. Consumer lending is licensed in 16 states.
The two paths work differently, and the difference drives every number below.
On the asset qualifier path, your eligible assets, after the credit percentages, must equal or exceed the whole loan amount. Nothing about employment or income is documented. The lender’s review rests on the assets.
On the asset depletion path, the lender counts your assets at a discount (a haircut) and divides the total by 60 months. The result is a monthly qualifying income. That income must carry the housing payment and your other debts through the debt-to-income test.
Most borrowers fit one path better than the other. If your assets cover the loan outright, the qualifier path is cleaner. If they do not, or the property is an investment, the depletion path is the one that applies.
Key Terms Defined
Loan-to-value (LTV): the loan amount divided by the property’s value, shown as a percentage.
Haircut: the discount a lender applies to an asset, so only part of the balance counts.
Divisor: the number of months, here 60, that usable assets are divided by to create monthly income.
Seasoning: how long funds have sat in your account, shown by statements, before they count.
Binding constraint: the single limit that stops your loan from getting bigger, whether that is leverage, assets or debt-to-income.
Debt-to-income (DTI): your monthly debts, including the new housing payment, compared with your qualifying income.
What Sets Your Leverage Limit?
Five layers set it: the path, the occupancy, the loan purpose, the loan size and your credit. The lowest applicable cap governs. No regulator publishes one universal number, so every ceiling here comes from program guidelines, and each lender’s matrix can sit below the ceiling.
Think of it as a series of gates. You choose a path. The path sets a base ceiling for your occupancy and purpose. The loan-size range and your credit score then decide whether you reach that ceiling. Whichever gate is lowest is your real number.
That last point trips up borrowers. A headline 80% does not mean 80% for you. On the depletion path, the lender’s score and loan-amount matrix can pull the ceiling lower. On the qualifier path, the asset total can stop you well before leverage does.
Leverage by Path and Occupancy
Here is the core grid. Each figure is a program ceiling, subject to underwriting and the lender’s own matrix.
| Occupancy | Qualifier path | Depletion path |
|---|---|---|
| Principal residence, purchase | Up to 80% | Up to 80% |
| Principal residence, rate-and-term | Up to 75% | Up to 80% |
| Principal residence, cash-out | Set by lender, not published | Up to 60% |
| Second home, purchase | Up to 80% | Up to 80% |
| Second home, rate-and-term | Up to 75% | Up to 80% |
| Second home, cash-out | Set by lender, not published | Up to 60% |
| Investment property, purchase or rate-and-term | Not offered | Up to 65% |
| Investment property, cash-out | Not offered | Up to 60% |
Two notes on reading it. First, the qualifier path lists one refinance figure, 75%. Whether cash-out proceeds are allowed on that path, and at what leverage, is the lender’s call and is not published, so do not plan around a number. Second, cash-out proceeds never count toward your qualifying assets on the depletion path.
Occupancy moves the ceiling most on the depletion path. A principal residence or second home gets 80% on a purchase, while an investment property gets 65%. That 15-point gap is the price of the property earning rather than housing you.
Does Purpose Change the Limit?
Yes. Cash-out is always the lowest tier, because you are taking equity out rather than buying with it.
On the depletion path, a purchase or rate-and-term refinance of a principal residence or second home gets up to 80%. A cash-out on the same properties drops to 60%. On an investment property, the drop is smaller in points but starts from a lower base: 65% falls to 60%.
On the qualifier path, a purchase gets up to 80% and a refinance up to 75%. Reserves also follow leverage there. None are required at or below 75% LTV, and above that the lender sets them. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
A rate-and-term refinance means no cash comes back to you beyond closing costs. A cash-out refinance does return cash. Lenders treat the second as riskier, so the ceiling falls.
How Loan Size Interacts With the Cap
Loan size sets the outer boundary, and the lender’s matrix can tighten leverage inside it. Through select programs, the qualifier path covers loans up to $4,000,000. The depletion path covers $125,000 to $3,500,000.
Above those ranges the file leaves this program. Between the floor and the ceiling, the lender’s score and loan-amount matrix may pull your maximum LTV below the headline figure, especially on the depletion path. These step-downs vary by lender and are confirmed at file review. Treat the tables here as the most you could see, not the amount you will see.
| Path | Loan range | Credit floor |
|---|---|---|
| Asset qualifier | Up to $4,000,000 | 600 minimum score |
| Asset depletion | $125,000 to $3,500,000 | The lender’s matrix |
What Counts as an Asset, and How Much of It?
The credit percentages decide whether leverage or assets bind first, so they matter as much as the LTV.
On the qualifier path, brokerage accounts, certificates of deposit, money market and savings all count at 100%. Retirement accounts count at 90% if you are under 59½ and 100% at 59½ or older. Accounts combine.
On the depletion path, the haircuts are steeper:
- Cash accounts and certificates of deposit: 100%
- Securities: 80%
- Private stock: 75%
- Retirement accounts: 70% at any age
- Real-estate equity: 60%
Several asset types are not eligible on the depletion path: custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options, non-vested restricted stock units, and funds from non-regulated financial companies. Cryptocurrency, precious metals, collectibles and borrowed or pledged funds are 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.
Seasoning differs by path as well. The qualifier path wants 60 days of seasoning and two months of statements for each qualifying account. The depletion path wants statements at least 120 days old at application, plus the most recent statement within 45 days. Sale-of-business, inheritance and legal-settlement funds are excused from that seasoning.
Worked Scenarios: Find the Binding Constraint
These are illustrations. The lender’s own calculation governs.
Scenario 1: qualifier path, principal residence. Picture a borrower seeking an $800,000 loan with $330,000 in brokerage accounts (counted at 100%), $300,000 in a 401(k) while under 59½ (counted at 90%, or $270,000) and $200,000 in savings (100%). That is $800,000 of usable assets, matching the loan exactly. The borrower is reviewed on assets alone, with no income documented. Binding constraint: the asset total. Adding even a little more loan would fail the test before the 80% purchase ceiling mattered.
Scenario 2: depletion path, second home. Say a retiree holds $1,500,000 in securities (counted at 80%, or $1,200,000) and $300,000 in cash (100%). Usable assets are $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income, which then carries the housing payment and other debts through the debt-to-income test. On a purchase, leverage can reach 80%. Binding constraint: usually the DTI test, since a larger loan raises the payment against fixed income.
Scenario 3: investment property. Consider an investor with plenty of savings who wants a rental. The qualifier path is closed, so the file goes to the depletion path at up to 65% on a purchase. The investor also needs 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 depletion is the only income source. A first-time investor needs a 700 credit score on this path. Binding constraint: the 65% ceiling itself, and for a first-time investor, the score. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Scenario 4: a large loan. Suppose a borrower wants financing at the top of the range. On the qualifier path, the assets must cover every dollar of a loan that can reach $4,000,000. Binding constraint: almost always the asset total, because covering the whole balance takes far more than a typical down payment.
Where the General Rule Breaks
Four edge cases change the picture.
Supplementing documented income. If you have some documented income, asset-derived income can supplement it, up to a 45% DTI. When it supplements, the minimum-assets rule is waived. This is a hybrid use of the depletion path, not a blend of the two paths.
Cash-out proceeds. On the depletion path, cash pulled out never counts toward your qualifying assets. You cannot refinance, take cash and then count that cash.
Credit events. The depletion path wants 0x30x12 housing history, with one 30-day late in the last twelve months considered case by case. Multiple bankruptcies are not eligible. A housing event needs 4 years of seasoning on the depletion path.
Retirement accounts. Balances in a 401(k) or IRA count at different percentages by path and age, as shown above. Tax treatment varies; consult a qualified professional.
When Your Rental Should Skip This Program
An asset-based mortgage is a consumer loan. A pure rental purchase often fits a DSCR loan better. 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.
Federal rules look at the purpose of the loan, not the label on the property. The CFPB’s Regulation Z exempts credit extended primarily for a business or commercial purpose. Compliance Alliance notes that commentary looks at the purpose of the loan proceeds. If you will live in the home, an LLC title does not change the occupancy.
A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Programs below 1.00 coverage are available through select lenders in the network, but leverage and terms adjust.
| Route | Best when | Watch for |
|---|---|---|
| Asset qualifier | Assets cover the loan outright | Asset total binds first |
| Asset depletion | Assets are large, income is small | 60% to 65% on investment |
| DSCR | Rent covers the property’s payment | Business purpose only |
The practical choice is simple. If you live in the property, you are in the asset-based program. If it is a rental you will not occupy, look at DSCR. If the rent is thin, the asset-based depletion path still allows an investment property, at lower leverage.
Frequently Asked Questions
Can I use an asset-based mortgage on an investment property?
Only on the asset depletion path. It allows up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out, subject to underwriting. The qualifier path serves principal residences and second homes only.
Is cash-out available on the qualifier path?
It depends on the lender, and the leverage is not published. Plan on the depletion path if cash-out matters, where principal residences, second homes and investment properties all reach 60% on a cash-out.
Does this loan mean no documentation?
No. It means no traditional personal-income documentation, pay stubs or employment verification on the qualifier path. Your assets are documented on both paths with statements and seasoning rules. The depletion path also tests derived income through debt-to-income.
Can the lower cap on my file be something other than LTV?
Yes. The asset total, the loan-size range, your credit matrix or your DTI can each be the binding constraint. Your broker can identify which limit applies once the lender reviews your statements.
What credit score do I need?
The qualifier path has a 600 minimum score. The depletion path follows the lender’s score and loan-amount matrix, and a first-time investor needs a 700. Approval is never promised and depends on the full file.
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.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps self-employed and high-net-worth borrowers in 16 states qualify on bank statements, a profit-and-loss statement, 1099s or liquid assets instead of traditional personal-income documentation, through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and its guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Investors who want the broader program framework can review how DSCR loans work.
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References
1. CFPB, Regulation Z § 1026.3
2. Compliance Alliance, Regulation Z and Investment Properties
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Use an Asset-Based Mortgage to Buy a California Home for Your Parents? · Does a North Carolina Asset-Based Mortgage Require Tax Returns? · Can an Asset-Based Mortgage Close in the Name of a Trust?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.