The Quick Read: It depends on the loan size and the path, because no federal rule sets a minimum inheritance. On the asset qualifier path, usable assets must equal the whole loan. On the asset depletion path, they must reach the lesser of $1,000,000 or 1.25 times the loan.
- Asset qualifier path: eligible assets, after the credit percentages, must equal or exceed the entire loan amount, with no income documented.
- Asset depletion path: usable assets are divided by 60 months to create a monthly qualifying income that must carry the housing payment and other debts.
- Floor on that path: at least $250,000 in liquid assets when the assets are your only income source.
- Not all inherited money counts at face value. Retirement accounts, securities and real estate equity are discounted, and some assets are not eligible at all.
- Everything is subject to underwriting. These are ceilings and floors from select programs, not offers.
Is an Inheritance Income or an Asset?
An inheritance is an asset, not income. Once the money lands in an account titled to you, a lender sees cash, brokerage holdings or a retirement balance. It does not see “inheritance.” That is why a big inheritance does not lift your documented income on a normal mortgage application.
This is the exact problem asset-based mortgages solve. Picture a household with a seven-figure portfolio and a tax return that shows very little. A conventional underwriter sees low income. An asset-based program sees the balance sheet.
Across Lendmire’s wholesale network, the questions from heirs sound alike. Can I buy before the estate is settled? Do I have to sell the investments? Does the whole balance count? The answers depend on which of two paths you use, so start there.
Two Paths: Assets Cover the Loan, or Assets Become Income
You qualify on one path at a time, and the two do not blend. The asset qualifier path asks whether your eligible assets cover the entire loan. The asset depletion path turns usable assets into a monthly qualifying income and tests it against your debts. Which one fits depends on how much you hold relative to the loan.
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| Core test | Assets cover the whole loan | Assets become monthly income |
| Income documented | None | Derived from assets |
| Max loan | $4,000,000 | $125,000 to $3,500,000 |
| Occupancy | Primary or second home | Also investment property |
| Credit | 600 minimum | Lender’s matrix |
Both are consumer mortgage programs placed through select lenders, subject to underwriting. The assets are documented on both paths. “No income documentation” never means “no documentation.”
Leverage differs, and the occupancy matters. On the qualifier path, programs typically go up to 80% loan-to-value on a purchase and 75% on a refinance of a principal residence or second home. Cash-out terms on that path are set by the lender and are not published.
On the depletion path, a principal residence or second home can reach 80% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. An investment property is lower: 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Cash-out proceeds never count as qualifying assets.
How Much Inheritance Do You Need?
The number is your loan amount on the qualifier path and a larger multiple of it on the depletion path. Think of it as a pool after discounts. Gross inheritance and usable assets are different numbers, and the usable number is the only one that counts.
Asset qualifier path: cover the loan
Usable assets must equal or exceed the entire loan. Here is an illustrative case, and the lender’s own calculation governs. Take an $800,000 loan. You hold $330,000 in brokerage accounts (100%, so $330,000), $300,000 in a 401(k) under age 59½ (90%, so $270,000) and $200,000 in savings (100%, so $200,000). That counts $800,000 of usable assets, which is reviewed on assets alone, subject to underwriting.
Notice what happened. Your gross balances were $830,000, but the usable total landed at exactly the loan amount. The retirement discount closed the cushion.
Money you spend on the down payment and closing costs generally cannot also sit in the qualifying pool. The lender looks at what is left. Plan for the pool to cover the loan after those uses.
Asset depletion path: turn assets into income
Here the usable total is divided by 60 months. Take $1,500,000 in securities (80%, so $1,200,000) plus $300,000 in cash (100%, so $300,000). That is $1,500,000 usable, divided by 60 months, or $25,000 of monthly qualifying income. That income then carries the housing payment and your other debts through the debt-to-income test.
A handy rule of thumb follows from the divisor. Every $100,000 of usable assets adds about $1,667 of monthly qualifying income. Working backward from a target loan is possible, but the debt-to-income test decides the answer, so your existing debts matter.
The depletion path also has minimum asset rules:
- Qualified assets must reach at least the lesser of $1,000,000 or 1.25 times the loan balance.
- Liquid assets can never fall below $250,000 when depletion is your only income source.
- An $800,000 loan lands at the $1,000,000 minimum, and larger loans stay at that $1,000,000 cap.
If you have documented income too, asset-derived income may supplement it up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived.
Which Inherited Assets Count, and for How Much
Cash-like assets count in full, and market-based or retirement assets get discounted. The table shows the share of the balance that counts on each path, through select programs.
| Asset | Qualifier Path | Depletion Path |
|---|---|---|
| Savings / cash accounts | 100% | 100% |
| Certificates of deposit | 100% | 100% |
| Brokerage / securities | 100% | 80% |
| Retirement accounts | 90% under 59½, 100% after | 70% at any age |
| Real estate equity | Not listed | 60% |
The qualifier path also counts money market accounts at 100%. Accounts combine on that path. On the depletion path, private stock counts at 75%.
Several assets 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.
What about cryptocurrency, precious metals and collectibles? Neither path publishes them as eligible at a percentage. The documented route is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Equity in the home you are financing cannot count at all. Equity in a different property can count at 60% on the depletion path, subject to underwriting.
Probate, Trusts and Timing
You need the funds in an account titled to you, backed by statements and a clear paper trail. An estate that has not distributed yet is a timing problem, not a dead end. Plan to document where the money came from.
Lenders typically ask for estate or distribution paperwork on recent large deposits. The exact list varies by program, so ask for it up front. Funds that are still inside a trust or an open estate are not yours to count until they are distributed to an account in your name. Lendmire’s piece How to Use Trust Assets to Qualify on an Asset Depletion Mortgage covers the trust side in more detail.
Seasoning is the waiting period assets must sit in your account before a lender counts them. It differs by path:
- 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.
- The inheritance exception: on the depletion path, sale-of-business, inheritance and legal-settlement funds are excused from that seasoning, though the funds are still documented.
Shared inheritances need one more check. If you and your siblings split an account, only your share counts, and it counts once it sits in an account titled to you. A joint account may complicate the picture.
Inherited Retirement Accounts Need Extra Care
Inherited retirement accounts are where the percentages stop being the whole story. Most non-spouse beneficiaries must empty an inherited IRA within 10 years of the owner’s death, per Kiplinger. Surviving spouses, minor children, disabled or chronically ill people, and people not more than 10 years younger than the owner are exempt.
A forced draw-down makes the account look less like a permanent income source. Whether an inherited IRA counts at all, and at what percentage, varies by lender and program. Treat the standard 70% depletion figure and the 90%-to-100% qualifier figures as starting points. Confirm the treatment of an inherited account before you build a plan around it.
Tax treatment can depend on how the funds are used and how the property is held; borrowers should keep clear records and speak with a qualified tax professional before relying on any deduction.
What the Law Says (and Doesn’t)
The lending rule behind all of this sets no dollar threshold, no divisor and no discount. The CFPB’s ability-to-repay provision, 12 CFR 1026.43, lets a lender base repayment ability on income, on assets other than the home securing the loan, or on both. The lender must verify whatever it relies on.
The eCFR text of the rule says the same thing, and it requires verification using third-party records. For you, that means statements. It also means the dwelling securing the loan is excluded, which is why its equity cannot count.
The 60-month divisor, the percentages and the minimums all come from program sheets. Agency programs are narrower on asset depletion, and those are their rules, not this program’s.
When the Inheritance Is a House, Not Cash
An inherited house is not a liquid asset, so it will not carry a depletion calculation the way cash does. If the house is a rental, a different loan may fit 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.
A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Your balance sheet is not the basis, and the property is. Lendmire’s complete DSCR loans guide walks through how that works.
The investor decision is straightforward. Compare the two paths on the specific deal. If the property’s rent is strong, DSCR may leave your inherited cash free for the down payment and reserves. If your income is thin and the property is a home to live in, the asset-based path may fit better. Using the same inheritance as both qualifying income and cash to close double-counts it, so the lender subtracts committed money first.
If Your Inheritance Falls Short
A shortfall usually has a fix. Try these in order:
1. Lower the target price or loan amount so usable assets cover it.
2. Move from the qualifier path to the depletion path, or the reverse, if the arithmetic improves.
3. Add liquid assets that you can season, such as an additional savings balance.
4. Add a co-borrower whose assets or documented income helps the file.
5. Use the asset-derived income to supplement documented income instead of standing alone, up to the 45% debt-to-income limit.
6. Choose a different program altogether. A bank statement program fits borrowers who document income through deposits.
Lendmire’s article How to Qualify for a Mortgage on Liquid Assets Alone goes further on building the pool.
Mistakes That Stall Files
Most stalled files trace back to one of a few habits.
- Counting gross balances. A $1,000,000 statement is rarely $1,000,000 of usable assets once the percentages apply.
- Spending the pool first. Down payment and closing costs come out of the same money.
- Moving funds between accounts mid-file. Large transfers invite questions, and statements need to show a clean trail.
- Assuming a retirement account counts at full value. Percentages differ by path, and inherited accounts add the distribution clock.
- Ignoring credit. The qualifier path has a 600 minimum score, and the depletion path follows the lender’s matrix. A first-time investor on the depletion path needs 700.
- Overlooking housing history. The standard is no late payments in the last twelve months, with one 30-day late considered case by case. Multiple bankruptcies are not eligible.
Credit and housing history are reviewed by the lender and are never a promise of approval.
Key Terms Defined
Asset qualifier path: a program that drives lender review by comparing eligible assets to the entire loan amount.
Asset depletion path: a program that divides usable assets by 60 months to create a monthly qualifying income.
Usable assets: the balance of each account after the program’s credit percentage is applied.
Seasoning: how long funds must sit in your account, and how old your statements must be, before a lender counts them.
Debt-to-income (DTI): your monthly debts, including the new housing payment, compared to your monthly qualifying income.
Probate: the court-supervised process of settling an estate and distributing its assets.
What to Do Next
Start by listing every account you hold, its balance and its title. Apply the percentages for each path, then compare the usable total to your target loan. 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 a broker that places these consumer asset-based mortgages through select lenders in its network, in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. Programs change, and every file is underwritten individually. Nothing here is a commitment to lend.
Frequently Asked Questions
Can I count my inheritance as income?
Not directly. The inheritance is an asset, and it becomes qualifying income only through the asset depletion path. There, usable assets are divided by 60 months, and the result runs through the debt-to-income test, subject to underwriting.
Can I apply before the estate pays out?
Funds still held by the estate or trust are not yours to count until they sit in an account titled to you. Once distributed, the money is documented with statements and the estate paperwork the lender requests. On the depletion path, inheritance funds are excused from the 120-day statement-age rule.
Do I have to sell my investments to qualify?
No. The calculation is a qualifying convention, and you keep the assets. On the depletion path, securities count at 80% while still invested. The qualifier path counts brokerage accounts at 100%.
Does an inherited IRA count?
It depends on the lender and program. Retirement accounts count at 70% on the depletion path and at 90% (under 59½) or 100% (59½ and older) on the qualifier path. Inherited accounts carry a distribution deadline, so lender treatment of them varies.
What credit score and down payment do I need?
The qualifier path has a 600 minimum score, and the depletion path follows the lender’s matrix. Leverage on a purchase tops out at 80% on the qualifier path, which means a 20% down payment at a minimum. On the depletion path, an investment property purchase tops out at 65%. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending partners for borrowers whose tax returns understate their income, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Kiplinger, the IRS 10-year rule for inherited IRAs
2. CFPB, Regulation Z §1026.43
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 Qualify for a Mortgage on Liquid Assets Alone · How Big Can an Assets-Only Mortgage Be? · How to Open a HELOC on Assets Alone as a Retiree
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.