The Quick Read: Yes, usually, if your verified assets are large enough and you accept lower leverage: on the asset depletion path, select lenders divide your usable assets by 60 months to create qualifying income, and investment property loans there top out at 65% of value on a purchase, subject to underwriting.
- Only the asset depletion path covers investment property. The other asset-based path, where assets alone cover the whole loan, is for primary homes and second homes.
- Leverage on a rental is 65% on a purchase or rate-and-term refinance and 60% on a cash-out refinance, through select programs.
- Loan amounts run from $125,000 to $3,500,000, and you need qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan, never below $250,000 liquid if assets are your only income.
- A first-time investor needs a 700 credit score on this path. Other borrowers follow the lender’s score and loan-amount matrix.
- If the rent comfortably covers the payment, a DSCR loan (a rental loan that qualifies the property, not you) may be the simpler route.
Nothing here is a commitment to lend. Every file is underwritten individually, and the lender’s own calculation governs.
Which Asset-Based Path Works for a Rental?
Only the asset depletion path works for a rental. Across the wholesale network Lendmire places files with, the asset qualifier path, where eligible assets cover the entire loan with no income documented, is limited to principal residences and second homes. A rental purchase runs through depletion.
Here is what depletion means. The lender takes your verified liquid assets, applies a percentage to each type, and divides the total by 60 months. The result is a monthly qualifying income. That income then goes through a debt-to-income test (DTI), which compares your monthly debts, including the new mortgage, to your income.
Nothing is sold, drained, or pledged. The math is a qualifying calculation, not a withdrawal plan. Your accounts stay where they are.
One more point that trips people up. This is a consumer mortgage, so the lender looks at you, not the building. The asset-based approach is documented, not undocumented. You skip pay stubs and traditional personal-income documentation, but you still hand over statements for every account the lender relies on.
How Does the Math Work?
The math is simple. Add up usable assets after each percentage, divide by 60, and compare the result against your housing payment and other debts.
Run the numbers on this example, which is illustrative only. Say you hold $1,500,000 in securities and $300,000 in cash. Securities count at 80%, so they contribute $1,200,000. Cash counts at 100%, so it contributes $300,000. Usable assets come to $1,500,000. Divide by 60 months and you get $25,000 of monthly qualifying income.
That $25,000 then has to carry the full housing payment on the new rental plus every other monthly debt you have. The lender’s DTI limit decides whether it does.
Two details change the picture in practice.
First, money used twice counts once. Cash you put toward the down payment and closing costs cannot also generate income. Lenders back those funds out before dividing. Investors who count the same dollars both ways overstate their income and get surprised at underwriting.
Second, the rent on the property you are buying may or may not offset the new payment. Programs treat it differently, and some give it little or no weight. Ask this question before you pick a lender, not after.
What Counts, and How Much of It?
On the depletion path, each asset type counts at a percentage of its balance. Cash and CDs count in full, while market-exposed and restricted assets are discounted.
| Asset type | Share counted (depletion path) |
|---|---|
| Cash accounts | 100% |
| Certificates of deposit | 100% |
| Securities | 80% |
| Private stock | 75% |
| Retirement accounts | 70% at any age |
| Real-estate equity | 60% |
These are the figures for select programs in the network, subject to underwriting. They are not the same as the asset qualifier path’s percentages, and you should never mix the two tables.
Some assets do not count at all on this path. These include 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 pledged or borrowed funds are not published as eligible on either path. The documented route is to convert them into a seasoned cash balance in a regulated account, then let the lender review where the money came from. Do not plan around them counting at a percentage.
What Leverage, Credit, and Minimums Apply?
Rentals carry the lowest leverage in the asset-based menu. On the depletion path, an investment property is typically limited to 65% loan-to-value (LTV, the loan as a share of the property’s value) on a purchase or rate-and-term refinance, and 60% on a cash-out refinance. Cash-out proceeds never count as qualifying assets. By comparison, a principal residence or second home on the same path can reach 80% on a purchase, so the rental discount is real.
Consider what that means for cash. At 65% leverage, you bring roughly a third of the price to the table, plus closing costs. Your asset pile has to cover that and still leave enough usable assets to generate the income. Plan the sequence before you make an offer. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
The other gates, all subject to underwriting:
- Loan amount. $125,000 to $3,500,000 on this path.
- Minimum assets. The lesser of $1,000,000 or 1.25 times the loan balance. When assets are your only income source, never below $250,000 liquid.
- Credit. A first-time investor needs 700. Everyone else follows the lender’s matrix, which ties the minimum score to the loan size.
- Housing history. Clean is the goal, at 0x30x12. One 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible, and a housing event needs four years of seasoning.
- Statements. They must be at least 120 days old at application, plus the most recent statement within 45 days. Funds from the sale of a business, an inheritance, or a legal settlement are excused from that seasoning.
- Supplemental use. If you have documented income too, asset-derived income can supplement it up to a 45% DTI. In that case the minimum-assets rule is waived.
Seasoning means the waiting period a lender wants funds to sit in your account before it counts them. Waiting also helps for another reason: sudden large deposits invite questions, and clean, steady balances do not.
Asset Depletion or DSCR: Which Fits a Michigan Rental?
Pick based on what is stronger, you or the property. Asset depletion tests the borrower. A DSCR loan tests the rent.
DSCR stands for debt service coverage ratio, which is monthly rent divided by the full monthly payment. 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. Most DSCR loans qualify primarily on property-level rental income covering the payment, subject to lender guidelines. The lender will still look at your credit.
| Factor | Asset depletion | DSCR loan |
|---|---|---|
| What gets tested | Your usable assets, as income | The property’s rent vs. payment |
| Your income | Derived from assets, run through DTI | Generally not the qualifier |
| Rental use | Investment property at 65% / 60% | Business-purpose investor loans |
| Best fit | Strong assets, thin rent | Strong rent, any income profile |
DSCR leverage and terms vary by program, so no single number should be treated as universal. Select lenders in the network also offer programs below 1.00 coverage, though LTV and terms adjust. Depletion is a consumer loan, while DSCR is a business-purpose loan. Whether an LLC can hold title on a given asset-based file is a program question, so confirm it before you shop.
The decision rule is simple. If rent comfortably covers the payment, start with DSCR. If the property is vacant, needs heavy work, or has thin rent, depletion may rescue the deal. In both cases, the broker’s job is to compare real guidelines across lenders. Lendmire’s complete DSCR loans guide covers the rent-based side in depth.
Who This Fits Best
Asset depletion fits borrowers whose balances are large and whose reportable income is small. Four profiles come up most often with Michigan-based borrowers and elsewhere.
The retiree. Decades of savings sit in brokerage and retirement accounts, and the paychecks stopped. Retirement accounts count at 70% of the balance at any age on this path, so age does not change that figure.
The business seller. The sale proceeds are in a regulated account but the income is gone. Sale-of-business funds are excused from the 120-day seasoning, which is a real advantage. The lender still reviews the source.
The portfolio investor with thin taxable income. Depreciation and write-offs can make a tax return look weak even when the portfolio is strong. Asset depletion is reviewed around what you hold. Tax treatment varies; consult a qualified professional.
The inheritance or settlement recipient. Those funds are also excused from the seasoning requirement, subject to the lender’s source review.
Thinking out loud for a moment: the retiree with a modest portfolio and a strong rental usually does better on DSCR. The retiree with a large portfolio and a rehab project usually does better on depletion. The deciding factor is rarely age. It is whether the rent can carry the payment on its own.
For related paths, Lendmire has written about how an STR investor qualifies on asset depletion vs rental income. Short-term rental rules can vary by city, county, HOA, and property type, so investors should confirm local rules before relying on projected rental income.
Does the Michigan Angle Change Anything?
Not the method. Lendmire’s consumer lending is licensed in 16 states, and Michigan is one of them. The program figures here do not change by state. What changes is the property: the price, the rent, the condition, and the local market. Those inputs drive whether the purchase works at 65% leverage, not the state line. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
How Do Lenders Treat the Rules Around Verification?
Lenders must verify the assets they rely on. Under the federal ability-to-repay rule, a creditor on a covered consumer loan has to make a reasonable, good-faith determination that you can repay, and it must verify the income or assets it uses to decide. The CFPB’s page on 12 CFR 1026.43 lays out that general requirement. The Cornell Legal Information Institute hosts the full regulation text.
The rule does not set a divisor or a haircut. Those come from each lender’s own policy, which is why depletion terms differ from one program to the next. That is also why comparing several programs matters.
Common Mistakes That Sink Rental Files
These come up again and again.
- Counting the down payment twice. Funds used to buy cannot also earn income on paper.
- Assuming the property’s equity helps. Equity in the home you are buying is not your qualifying asset.
- Moving money late. Statements need to be 120 days old at application, plus a recent one. Shuffling accounts the month before applying restarts the clock for some funds.
- Listing ineligible assets. Stock options, unvested RSUs, and cash on hand do not count on this path.
- Believing it is no-documentation. It is not. Every counted account needs statements.
- Ignoring leverage. Many first-time investors expect 80% because their primary home allowed it. A rental on this path is capped at 65%.
Key Terms Defined
Asset depletion. A method that converts verified liquid assets into monthly qualifying income by dividing usable assets by 60 months.
Haircut. The discount a lender applies to an asset’s balance, so only a share of it counts.
Debt-to-income ratio (DTI). Your monthly debts divided by your monthly income, used to judge whether you can carry a new payment.
Seasoning. The waiting period funds must sit in an account before a lender counts them.
Non-QM. A mortgage outside the standard qualified-mortgage box, often used when income is unusual or comes from assets.
DSCR loan. A rental loan that qualifies the property’s rent against its payment instead of testing your income.
Frequently Asked Questions
Do I have to sell my investments to qualify?
No. Asset depletion is a qualifying calculation. The lender counts a share of your balances, divides by 60 months, and uses the result as income. Your accounts stay in place, though the money you use for the down payment and closing costs leaves them and cannot count as income.
Can I use my 401(k) or IRA?
Yes, on the depletion path retirement accounts count at 70% of the balance at any age, subject to underwriting. That is lower than cash at 100% and securities at 80%. Statements must meet the seasoning rules, so keep the account steady before you apply.
Can the rental’s rent help me qualify?
It depends on the program. Some programs let expected rent offset part of the payment, and others give it little or no weight. Ask each lender how it treats rent on the subject property before you commit. If rent is strong, a DSCR loan may fit better.
What if I only have a modest portfolio?
Check the minimums first. The depletion path wants 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 assets are your only income. Below that, a DSCR loan or a smaller purchase may make more sense.
Does a first-time investor face extra hurdles?
Yes. A first-time investor on the depletion path needs a 700 credit score. Experienced investors follow the lender’s score and loan-amount matrix, and a clean housing history of 0x30x12 helps every file. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Next Step
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. Reach the team at 828-256-2183 or request a quote.
Michigan rental math rewards the investor who knows which side of the deal carries the weight, so decide whether you or the property is the stronger borrower before choosing a loan.
For current guidelines and terms, see Lendmire’s asset-based mortgage programs page.
Lendmire’s asset-based mortgage in Michigan page presents the program for Michigan borrowers.
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
2. Cornell Legal Information Institute – 12 CFR 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: Can You Buy a Georgia Rental Property on Asset Depletion Income? · Can You Use an Asset-Based Mortgage to Buy a Home for Your Parents? · Can Two Retirees Buy a Home Together on an Asset Qualifier Mortgage?
Guides: Asset-Based Mortgage in Michigan
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.