The Quick Read: It depends on the program, but on an asset qualifier mortgage placed through select lenders in Lendmire’s network, an IRA counts at 90% of the balance under age 59½ and 100% at 59½ or older, while on the asset depletion path it counts at 70% at any age, subject to underwriting.
- Only the vested balance counts, and it must be shown on a recent statement.
- The asset qualifier path covers the whole loan with assets and documents no employment or income.
- The asset depletion path divides usable assets by 60 months to create a qualifying income.
- A borrower is qualified on one path at a time. The two percentages never blend.
- Funds earmarked for the down payment or closing costs come out before the percentage is applied.
Most borrowers who ask this question are cash-heavy and income-light: retirees, people who sold a business, households living on a portfolio. The IRA is often the largest account they own. Across the wholesale network, how much of it counts is the first thing a processor works out, because it decides which path fits.
This article covers purchases and refinances of principal residences and second homes, plus investment property on the depletion path. Consumer mortgage lending is licensed in 16 states. Figures below are ceilings and floors, not offers, and the lender’s own calculation governs.
Do IRAs Count as Assets at All?
Yes. Traditional, Roth, SEP and SIMPLE IRAs are all commonly accepted as retirement assets across the network. The account must be in the borrower’s name. Inherited IRAs are handled case by case.
What matters is the vested balance. Unvested employer match is not an asset for this purpose. A loan taken against a 401(k) reduces the vested balance, and an IRA itself cannot be borrowed against.
The balance also has to be documented. Underwriters want a recent statement showing the vested amount and the terms for getting at the money. Agency lending asks for similar documentation: Fannie Mae’s Selling Guide accepts vested IRA and 401(k) funds, provided the account allows withdrawal regardless of employment status. That is a contrast point only. It does not set the rules for the programs described here.
Why the Full Balance Rarely Counts
An IRA is a restricted asset. Cash in a savings account can be spent tomorrow with no penalty. An IRA balance carries a tax bill if it is cashed out.
IRS Topic 557 explains that distributions taken before age 59½ are generally early distributions. They carry a 10% additional tax on the taxable portion, on top of regular income tax. The IRS lists exceptions, including disability, certain periodic payments, and up to $10,000 for a qualified first-time home purchase. A lender does not assume you qualify for any of them.
That tax drag is why programs discount retirement money. The discount varies a lot. Some lenders credit nearly all of it. Others cut it by a third or more. Anyone quoting one flat figure for “lenders” is guessing. The only reliable answer comes from the specific program and path.
Which Path Fits, and What the IRA Counts For
The two paths answer different questions. Name the path before you read any percentage.
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| What assets do | Cover the entire loan | Become monthly income |
| IRA / retirement credit | 90% under 59½, 100% at 59½+ | 70% at any age |
| Income documented | None | Derived income, tested on debt-to-income |
| Max leverage, purchase | Up to 80% | Up to 80% primary or second home; 65% investment |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Credit | 600 minimum | Lender’s matrix |
All leverage and credit figures are typical ranges through select programs, subject to underwriting.
Asset qualifier path. Eligible assets, after the credit percentages, must equal or exceed the entire loan amount. Brokerage, CDs, money market and savings count at 100%. A 401(k) or IRA counts at 90% under 59½ and 100% at 59½ or older. Accounts combine. Leverage runs up to 80% on a purchase and up to 75% on a refinance of a principal residence or second home. The credit floor is 600. Reserves are not required at or below 75% loan-to-value; above that, the lender sets them.
Asset depletion path. Usable assets are divided by 60 months to produce a qualifying income. That income must carry the housing payment and other debts through the debt-to-income test. Cash and CDs count at 100%, securities at 80%, retirement accounts at 70% at any age, and real-estate equity at 60%. Privately held stock is not eligible. 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 refinance. On investment property it is up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Cash-out proceeds never count as qualifying assets.
The depletion path also has minimums. Qualified assets must be 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 the only income source. Asset-derived income can supplement documented income up to a 45% debt-to-income ratio, and when it does, the minimum-assets rule is waived.
A Worked Example
Run the numbers on a borrower who is 57 and wants an $800,000 loan on a principal residence. These are illustrative figures, and the lender’s own calculation governs.
The borrower holds $330,000 in brokerage accounts, $300,000 in a 401(k) and $200,000 in savings.
1. Brokerage counts at 100%, so $330,000. 2. The 401(k) is under 59½, so it counts at 90%, or $270,000. 3. Savings count at 100%, so $200,000. 4. Total usable assets are $800,000, which equals the loan amount.
On the asset qualifier path, that borrower is reviewed on assets alone, subject to underwriting. Had the borrower been 59½ or older, the same 401(k) would count at 100%, leaving the file with more cushion.
Now take a different borrower with $1,500,000 in securities and $300,000 in cash, wanting income-based qualification on the depletion path. Securities count at 80%, which is $1,200,000. Cash counts at 100%, which is $300,000. Usable assets are $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income. That income then has to carry the housing payment and other debts through the debt-to-income test.
Swap in an IRA on the depletion path and it counts at 70%, not 90% or 100%. The same account is worth less there. That is the most common surprise on retirement-heavy files.
Counting the Balance Versus Withdrawing It
Counting an IRA and cashing it out are different things.
On both paths, the account is verified and credited. Nothing has to be liquidated just because it counts toward the qualifying total.
Funds assigned to the down payment or closing costs are a separate matter. Money used to close generally has to be liquidated and moved to the closing account. That triggers the tax consequences described above. On a depletion file, funds earmarked for closing come out of the pool before the haircut is applied.
So the decision is practical. If other cash can cover the down payment, leave the IRA alone and let it count as a verified asset. If the IRA is the only source of cash to close, weigh the tax cost of the withdrawal against the loan. Tax treatment varies by situation; consult a qualified professional before withdrawing retirement funds.
Roth, Age 59½ and Other Edge Cases
Roth IRA. Inside the account, the tax treatment differs from a traditional IRA, but the lender’s percentage does not. In the network’s programs, a Roth is credited at the same percentage as a traditional IRA on each path. Do not assume it earns a better factor.
Age 59½. It matters on the qualifier path, where the credit steps from 90% to 100%. On the depletion path, retirement accounts count at 70% at any age, so turning 59½ changes nothing there.
Plans that restrict withdrawals while employed. The agency guide above wants the account to allow withdrawal regardless of employment status. A workplace 401(k) that only pays out at termination can run into this. An IRA has no such restriction.
Non-vested money. It does not count. Neither do non-vested restricted stock units or stock options on the depletion path.
Self-directed IRA buying the property. This is a different situation from using balances as assets. A self-directed IRA that holds title has its own ownership and non-recourse issues, and not every lender supports it. Ask before assuming.
Assets that never count. Privately held stock, cryptocurrency, precious metals, collectibles, pledged or borrowed funds and business accounts beyond the borrower’s ownership share are not 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.
How Agency Methods Differ
Agency methods are their own rulebook, written for agency loans, and they do not govern the programs described here.
The network’s depletion path applies the haircuts above, with retirement at 70%, then divides usable assets by 60 months. The haircuts, the 60-month divisor and the debt-to-income test are specific to this path, so keep them separate from any agency formula a reader brings to the file.
Documents and Seasoning Checklist
The assets are documented on both paths. “No tax returns, pay stubs or employment verification” never means “no documentation.”
- Qualifier path: 60 days of seasoning and two months of statements for each qualifying account.
- Depletion path: 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.
- Ownership: the account titled in the borrower’s name.
- Vested balance: shown on the statement, net of any plan loans.
- Recent rollovers or transfers: keep the paper trail from the old custodian to the new one.
- Large deposits: be ready to explain the source of any irregular deposit.
Credit is the other gate. The qualifier path has a published floor of 600. The depletion path follows the lender’s score and loan-amount matrix, and a first-time investor there needs 700. Housing history is 0x30x12, with one 30-day late in the last twelve months considered case by case. Multiple bankruptcies are not eligible.
Mistakes That Reduce What Counts
- Reading the gross statement balance as the credited amount.
- Applying the qualifier-path 90% or 100% to a depletion-path file.
- Moving funds between custodians without telling the loan officer.
- Liquidating the IRA when other cash could cover closing.
- Forgetting that down payment money comes out before the percentage is applied.
- Counting cash-out proceeds as qualifying assets on the depletion path.
Key Terms Defined
Vested balance: the portion of a retirement account you own outright and can withdraw.
Asset qualifier: a path where eligible assets cover the whole loan and no income is documented.
Asset depletion: a path that divides usable assets by 60 months to create qualifying income.
Seasoning: the minimum time funds must sit in an account before they count.
Haircut: the share of a balance a lender does not credit.
Frequently Asked Questions
Why did my lender count less than my statement shows?
The statement shows the gross balance. Underwriters start from the vested balance, subtract any plan loans and funds earmarked for closing, then apply the program percentage. On the depletion path an IRA counts at 70%, so a $1,000,000 statement credits much less.
Do Roth IRAs count differently from traditional IRAs?
Not on these programs. Both are credited at the same retirement percentage on each path. The Roth’s tax advantages apply when you withdraw, not when a lender counts the balance.
Do I have to cash out my IRA to use it?
No. Counting it toward the qualifying total only requires verification. Cash needed to close is different, because funds used at closing generally have to be liquidated, which can trigger tax and the 10% additional tax under IRS rules.
Can I qualify if I have little documented income?
Possibly. On the qualifier path, no employment or income is documented and eligible assets must cover the entire loan. On the depletion path, assets become income through the 60-month divisor. Either way, qualification is subject to credit, property review and underwriting.
Can an IRA help with an investment property?
On the depletion path, yes. Investment property leverage is up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Rental financing that qualifies primarily on property-level rental income covering the payment is a separate product, subject to lender guidelines.
Where to Go Next
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 programs based on your statements, the property, credit profile, leverage, and your goals. Lendmire is a broker arranging financing through select lenders in its wholesale network. Programs change, every file is underwritten individually, and nothing here is a commitment to lend.
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. Fannie Mae Selling Guide, Retirement Accounts
2. IRS Topic 557, Additional Tax on Early Distributions
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 Much of a Brokerage Account Counts Toward a Texas Asset Qualifier Mortgage? · Can a Pennsylvania Trust Beneficiary Qualify for a Mortgage on Trust Assets? · How Michigan Tech Employees Paid in Stock Get a Mortgage on Assets
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.