The Quick Read: Yes, certificates of deposit count at 100% of their balance on the asset qualifier path, as long as the account is owned by the borrower, held at a regulated institution, seasoned, and not pledged to anything else, subject to underwriting. Across the wholesale network, a CD sits in the same top tier as savings, money market and brokerage balances.
- Qualifier path: CDs count at 100%, and the combined eligible assets must equal or exceed the whole loan amount.
- Depletion path: CDs also count at 100%, but the total is divided by 60 months to create qualifying income.
- Seasoning on the qualifier path is 60 days, with two months of statements per account.
- A CD used for the down payment or closing costs cannot also be counted as a post-closing asset.
- A CD that is pledged, locked behind a third party’s approval, or unsourced will not carry the file.
Most CD problems on these files are documentation problems, not eligibility problems. The rest of this piece covers which path fits, how the CD gets documented, and where files stall.
Which Path Are You On?
An asset-based mortgage runs on one of two paths, and a borrower is qualified on one at a time. The numbers below belong to the path named in each sentence. Mixing them can cause these files to be misread.
The asset qualifier path drives lender review on assets alone. Eligible assets, after the credit percentages, must equal or exceed the entire loan amount. No employment or income is documented. Leverage runs up to 80% on a purchase and 75% on a refinance for a principal residence or second home, with loans up to $4,000,000, through select programs. The credit floor is 600.
The asset depletion path turns assets into monthly income. Usable assets are divided by 60 months, and that income must carry the housing payment and other debts through the debt-to-income test. Leverage on a principal residence or second home runs up to 80% on a purchase or rate-and-term refinance and 60% on a cash-out. On an investment property it is 65% on a purchase or rate-and-term and 60% on a cash-out. Loan amounts run $125,000 to $3,500,000. Credit follows the lender’s matrix.
Both paths document the assets. “No income documentation” never means “no documentation.”
Do CDs Count, and at What Percentage?
Yes. On both paths a CD counts at 100% of its balance, through select programs and subject to underwriting.
Here is how that compares with the other asset types, path by path.
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Certificates of deposit | 100% | 100% |
| Savings / cash accounts | 100% | 100% |
| Money market | 100% | 100% (cash tier) |
| Brokerage / securities | 100% | 80% |
| Retirement accounts | 90% under 59½, 100% at 59½+ | 70% at any age |
| Real-estate equity | Not listed | 60% |
Why do CDs get full credit when they carry a penalty? Because the penalty is a cost, not a barrier. A CD is a time deposit at a regulated bank, the principal is fixed, and the borrower can reach it. Retirement accounts take haircuts for different reasons: market value swings and, under age 59½, an early-withdrawal charge. Securities swing in price. A CD does neither, so it sits with cash.
On the penalty itself, OCC HelpWithMyBank states that federal law sets only a minimum early-withdrawal penalty and no maximum. The actual penalty comes from the deposit agreement. That is why the statement and the account terms matter more than the CD label.
What the Lender Wants to See on a CD
The reviewer needs to confirm that the money exists, belongs to the borrower, and is reachable. That is ordinary asset verification. OCC Bulletin 2019-36 describes asset dissipation underwriting for banks, the bank-side cousin of the depletion method, and expects asset-based lending to rest on sound controls. It does not list eligible asset types. Each program’s own guidelines do that.
A clean CD package usually carries:
1. Two months of statements on the qualifier path, showing owner name, balance, and institution.
2. The CD terms, including maturity date and early-withdrawal language, so the reviewer sees what access costs.
3. Seasoning evidence. The qualifier path wants 60 days. The depletion path wants statements at least 120 days old at application plus one within 45 days.
4. A source for any recent deposit. A CD opened last month with funds moved from another account needs the trail back to the original account.
5. Proof of no encumbrance. If the CD secures a loan or line of credit, say so up front.
Sale-of-business, inheritance and legal-settlement funds are excused from the depletion path’s seasoning rule, though the source is still documented.
Where CD Files Stall
The edge cases are narrow, but each one pends a file when it shows up late.
Pledged CDs. A CD held as collateral for another loan generally cannot count. Liabilities secured against an asset reduce what is usable. Disclose it early.
Third-party access. Funds that need someone else’s approval to withdraw are not treated as liquid. A CD in a trust or joint account where a non-borrowing co-owner must sign is the usual version.
Ownership. The name on the CD should match the borrower. Business accounts count only up to the borrower’s ownership share, and the lender reviews them closely.
Maturity and renewal. A CD that matures and rolls over mid-file is usually workable, but the statement set should show the post-renewal balance and the same owner. Gaps between statement sets invite questions.
Brokered and no-penalty CDs. These behave differently from a standard bank CD. A brokered CD trades on a secondary market and a reviewer may look at it more like a security. Confirm treatment with the lender before building the file around one.
Double use. A CD cannot do two jobs. If it funds the down payment or closing costs, it leaves the pool. On the qualifier path, what remains must still equal or exceed the loan amount.
Retirement CDs. A CD held inside an IRA is a retirement account, not a cash account. It follows the retirement percentage for the path, not the CD percentage.
A Worked Example
Consider a retired borrower buying a primary residence on the asset qualifier path, with an $800,000 loan. The assets are $330,000 in brokerage accounts, $300,000 in a 401(k) and $200,000 in savings. The borrower is under 59½.
- Brokerage at 100% counts $330,000.
- The 401(k) at 90% counts $270,000.
- Savings at 100% counts $200,000.
That is $800,000 of usable assets against an $800,000 loan, so the file is reviewed on assets alone, subject to underwriting and the lender’s own calculation.
Now swap the $200,000 of savings for a $200,000 CD. The count does not change, because both sit at 100%. The difference is in the paperwork: the CD adds its terms and maturity date to the package. If instead that CD had to fund the down payment, the pool would drop and the file would fall short. Which assets pay for closing is a sequencing decision to settle with the loan officer before application.
On the depletion path, $1,500,000 in securities at 80% counts $1,200,000. Add $300,000 in cash or CDs at 100% and the usable total is $1,500,000. Divided by 60 months, that produces $25,000 of monthly qualifying income, which then carries the housing payment and other debts through the debt-to-income test. That path also requires qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan, and never below $250,000 liquid when assets are the only income source.
Does the Federal Rule Say CDs Qualify?
No federal rule lists CDs as eligible or ineligible. The ability-to-repay rule’s eight underwriting factors, set out in the Federal Register ATR final rule, include current or reasonably expected income or assets. Which assets count, and at what percentage, is set by each program’s guidelines. That is why the percentages above come from the network’s programs and not from a regulation.
The Investor Decision
This product is a consumer mortgage for a principal residence or second home, with investment property available only on the depletion path. A pure rental purchase usually belongs on a different product. DSCR loans are designed for non-owner-occupied investment properties, and because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. On a DSCR file the CD usually shows up as reserves and liquidity rather than as qualifying income, since the loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines.
If CDs are the bulk of the balance sheet, two practical points follow:
- You usually do not need to break the CD. The assets stay in the account. The file needs proof of balance, ownership and access, not liquidation.
- A ladder helps. CDs maturing on different dates leave room to use one for closing funds without disturbing the pool the loan depends on.
Reserves on the qualifier path are none at or below 75% loan-to-value, and above that the lender sets them.
Cash, crypto, precious metals and collectibles 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.
Tax treatment varies; consult a qualified professional.
Key Terms Defined
Asset qualifier: A path that drives lender review on eligible assets alone, with no income documented.
Asset depletion: A path that divides usable assets by 60 months to create qualifying income.
Seasoning: The length of time funds have sat in the borrower’s account before application.
Haircut: The share of an asset’s balance that does not count toward qualifying.
Encumbered asset: An account pledged as collateral or tied to a loan, which generally cannot count.
Frequently Asked Questions
Does a CD count at full value if it has an early-withdrawal penalty?
Yes, on both paths a CD counts at 100% of its balance, subject to underwriting. The penalty is contractual and set by the deposit agreement, so the reviewer reads the terms to confirm the funds are reachable. It does not trigger a haircut.
How long must a CD be in my name before it counts?
On the qualifier path, funds need 60 days of seasoning with two months of statements. On the depletion path, statements must be at least 120 days old at application plus one within 45 days. Inheritance, business-sale and settlement funds are excused from the depletion seasoning rule, though the source is still documented.
Can the same CD be my down payment and my qualifying asset?
No. Money used for the down payment or closing costs leaves the pool. On the qualifier path, the remaining eligible assets must still equal or exceed the entire loan amount.
Is a CD inside an IRA treated like a regular CD?
No. It is a retirement account. On the qualifier path that means 90% under age 59½ and 100% at 59½ or older. On the depletion path it is 70% at any age.
What if my CD matures or renews during the file?
Usually that is workable. The statements need to show the owner, the balance after renewal, and a clear trail from the old term to the new one. Surprises between statement sets are what slow a 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. Consumer lending is available in 16 states, subject to underwriting.
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. OCC HelpWithMyBank, CD penalties
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 Pledged or Margined Securities Count Toward an Asset Qualifier Mortgage? · How to Buy Before You Sell in Virginia Using an Asset Qualifier Mortgage · How to Document an Indiana Asset Qualifier Mortgage Without an Employer
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.