The Quick Read: Asset qualifier fits a retiree whose eligible assets cover the entire loan, because the file is reviewed on assets alone and no income is documented. Asset depletion fits a retiree whose assets are large but do not cover the loan, because it turns the portfolio into monthly income that has to pass a debt-to-income test. Both are consumer mortgage paths, and a borrower is qualified on one path at a time.
- Asset qualifier: eligible assets must equal or exceed the whole loan amount, up to 80% on a purchase and 75% on a refinance, subject to underwriting.
- Asset depletion: usable assets divided by 60 months become qualifying income, which must carry the housing payment and other debts.
- Documentation: both paths document the assets. Only income documentation drops away on the qualifier path.
- Michigan: the program figures do not change by state. Michigan is on the list of 16 states where Lendmire’s consumer lending is licensed.
- Figures are ceilings and floors: every file is underwritten individually, through select programs.
A retiree in Michigan usually shows up with a familiar profile. The brokerage account is big. The IRA is bigger. Taxable income is thin, because the retiree is living off distributions and Social Security. A conventional file reads that as low income. Both options in this comparison exist to fix that mismatch, and they fix it in different ways. The table below shows the differences. The sections after it say who each path suits.
This is a referee piece, not a pitch. The right answer depends on the size of the loan relative to the portfolio, the type of accounts, and the property.
Side-by-Side
The two paths differ in what the assets must do. On the qualifier path they must cover the loan. On the depletion path they must produce income. The column for each path below reflects the Lendmire-side parameters across its wholesale network, subject to underwriting and the lender’s own calculation.
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| Review basis | Eligible assets equal or exceed the whole loan | Assets ÷ 60 months = monthly income |
| Income documented | None | Derived income, tested through DTI |
| Purchase leverage | Up to 80% | Up to 80% (primary/second home); 65% (investment) |
| Refinance leverage | Up to 75% | Up to 80% rate-and-term, 60% cash-out (primary/second); 65% and 60% (investment) |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Property use | Primary residence, second home | Primary, second home, investment |
| Retirement accounts | 90% under 59½, 100% at 59½ or older | 70% at any age |
| Brokerage and securities | 100% | 80% |
| Seasoning | 60 days; two months of statements per account | Statements 120+ days old plus one within 45 days |
| Credit | 600 minimum | Lender’s score and loan-amount matrix |
| Reserves | None at or below 75% LTV | No published reserve months |
| Minimum assets | Assets must cover the loan | Lesser of $1,000,000 or 1.25x loan; never under $250,000 liquid if sole income |
Two cautions on that table. First, the qualifier path’s cash-out terms are set by the lender and are not published, so none are shown. Second, the percentages in each column apply only to that path. Never blend them.
Where the Labels Come From
Neither term is a defined regulatory category. They are industry labels for how a lender uses a balance sheet. Lenders in the market draw the line between the two terms differently, and some use them as near synonyms. That is why a retiree should ask any lender which logic it actually applies: does it build a debt-to-income ratio, or does it test whether assets cover the loan?
The federal ability-to-repay rule is the framework underneath consumer files. It lets a creditor base its repayment determination on income, on assets other than the dwelling securing the loan, or on both, as the Federal Register notice for the rule explains. It also requires the creditor to verify what it relies on with third-party records, which is why statements matter so much. The regulation text at Cornell LII includes income from assets in its definition of total monthly income. That is the hook that lets a portfolio become a monthly figure on the depletion path.
When Asset Qualifier Is the Better Fit
Asset qualifier is the better fit when the retiree’s usable assets are at least as large as the loan. The file is simple in concept: add up the eligible balances after the credit percentages, and compare the total to the loan amount. No employment or income is documented.
Here is the sanctioned arithmetic. Say the loan is $800,000. The retiree holds $330,000 in brokerage accounts, counted at 100%, so $330,000. A 401(k) of $300,000, owned by someone under 59½, counts at 90%, so $270,000. Savings of $200,000 count at 100%, so $200,000. Usable assets total $800,000, which equals the loan, and the file can qualify on assets alone. Illustrative only. The lender’s own calculation governs.
Several things favor this path for a retiree:
- No debt-to-income test. A retiree with low taxable income is not penalized for it.
- Higher credit for assets. Brokerage, CDs, money market and savings count at 100%. Retirement accounts count at 100% once the borrower is 59½ or older, which most retirees are.
- Higher loan ceiling. Loans go up to $4,000,000 on this path.
- No reserves at or below 75% LTV, so there is no separate cushion to document. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
The trade-off is capital. The assets must cover the whole loan, so a large portion of the portfolio is effectively pledged by arithmetic, even though nothing is liquidated. A retiree buying a $900,000 home who wants to keep most of the portfolio working elsewhere may find this path uses more of it than expected. Seasoning also matters. Funds need 60 days of history, with two months of statements per account. A retiree who just sold a house and parked the proceeds last week should expect to wait out that seasoning.
Credit is a gate too. The floor is 600, and housing history is reviewed case by case if there has been a single 30-day late in the last twelve months. Multiple bankruptcies are not eligible.
When Asset Depletion Is the Better Fit
Asset depletion is the better fit when the retiree’s assets are large but do not cover the loan, or when the retiree wants to buy an investment property on a consumer-style asset path. The portfolio becomes income. The income then has to carry the housing payment and other debts through the debt-to-income test.
The sanctioned example runs like this. A retiree holds $1,500,000 in securities, counted at 80%, so $1,200,000. Add $300,000 in cash at 100%, so $300,000. Usable assets are $1,500,000. Divide by 60 months and the monthly qualifying income is $25,000. That figure then carries the housing payment and other debts. Illustrative only, subject to underwriting.
Where this path wins:
- The loan is larger than the usable assets, so they do not cover it. The portfolio produces income without needing to equal the loan.
- Investment property. The depletion path reaches investment property, at up to 65% on a purchase or rate-and-term refinance and 60% on cash-out. The qualifier path does not.
- Supplementing documented income. Asset-derived income can supplement documented income, such as pension or Social Security, up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived. For a retiree with a modest pension, that can matter a lot.
- Cash-out on a primary or second home is available at 60%. Cash-out proceeds never count as qualifying assets.
Costs of this path are the haircuts. Securities count at 80%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%. A retiree whose wealth sits mostly in an IRA sees the biggest haircut here, which is the reverse of the qualifier path. Not eligible: 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.
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 depletion is the only income source. A first-time investor needs a 700 score on this path, and a housing event needs four years of seasoning.
Statement rules are different too. Statements 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.
Which One Fits a Michigan Retiree?
The program figures do not change by state, so Michigan does not alter the math. What changes is the typical profile. Many Michigan retirees buy after selling a long-held family home, or add a lake or up-north second home. Both uses fit these paths, since primary residences and second homes are eligible on each.
A simple decision order helps:
1. Add up usable assets on the qualifier path. Apply the 100% and 90%/100% credits. If the total meets or exceeds the loan, the qualifier path is the first one to test.
2. If it falls short, run the depletion math. Apply the haircuts, divide by 60, and check whether the derived income carries the payment through the DTI test.
3. Check the property use. If it is an investment property, only the depletion path applies.
4. Check the documents. Look at statement age and seasoning on each account before choosing.
5. Consider supplementing. A retiree with a pension may use depletion income to fill the gap, up to the 45% debt-to-income ceiling.
Crypto, precious metals, collectibles, business accounts beyond the borrower’s ownership share, and pledged or borrowed 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.
Entity vesting is a separate question. These are consumer paths built on an individual’s personal assets, so retirees should not assume LLC vesting is available. Ask during the file review.
One more point for retirees who also own rentals. A purchase of non-owner-occupied rental property is generally treated as business-purpose credit, as the eCFR text of Regulation Z section 1026.3 describes. For a pure rental purchase, a DSCR loan, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines, often fits more directly than either asset path. Lendmire’s complete DSCR loans guide covers that route. The asset paths matter more when the purchase is a home, or when the rent coverage is thin.
Common Mistakes
Assuming no income documentation means no documentation. Assets are documented on both paths. Statements, ownership and seasoning all get reviewed.
Counting equity or retirement balances at full value. The depletion path counts retirement at 70% and real-estate equity at 60%. The qualifier path counts retirement at 90% under 59½.
Mixing the tables. A retiree who uses the qualifier path’s 100% credit for a 401(k) while testing the depletion path’s income will get the wrong answer. Pick one path per file.
Ignoring what the loan uses up. The qualifier path needs assets equal to the loan. That can tie up most of a portfolio on paper.
Leaving out liquid cash for closing. Down payment and closing costs come out of usable assets first, which shrinks the number the formula sees.
For a second view on pulling equity or leveraging at the top end of loan size, Lendmire’s piece on a maxed-out jumbo versus a super jumbo for a retiree on asset depletion is the natural next read.
The Verdict
Neither path is better in general. Asset qualifier is cleaner and uses richer credit percentages, but it demands assets that cover the whole loan. Asset depletion needs less in total and reaches investment property, but it applies haircuts and runs a debt-to-income test.
A retiree with a large balance relative to the loan, mostly in brokerage and savings, should test the qualifier path first. A retiree with a bigger loan, a pension to supplement, or an investment purchase should test the depletion path. Run both on the same statements before choosing. The arithmetic usually settles it.
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 loans through select lenders in its wholesale network. Consumer loans are subject to underwriting and the lender’s own calculation, and nothing here is a commitment to lend. Tax treatment varies; consult a qualified professional.
Key Terms Defined
Asset qualifier: A path where eligible assets, after credit percentages, must equal or exceed the entire loan, with no income documented.
Asset depletion: A path where usable assets divided by 60 months become monthly qualifying income that runs through the debt-to-income test.
Seasoning: The length of time funds have sat in an account, shown by statements.
Haircut: The share of an asset’s balance that does not count toward qualifying.
Debt-to-income ratio: Monthly debts, including the new housing payment, divided by monthly income.
Frequently Asked Questions
Do I have to sell my investments to use either path?
No. Both paths use the balances as a measurement. The assets stay in the accounts, though they must stay seasoned and documented through the file review.
Can a retiree use asset depletion for a rental property?
Yes, on the depletion path, at up to 65% on a purchase or rate-and-term refinance and 60% on cash-out, subject to underwriting. The qualifier path does not cover investment property. A first-time investor needs a 700 score on the depletion path.
Does my IRA count the same way on both paths?
No. The qualifier path counts retirement balances at 90% under 59½ and 100% at 59½ or older. The depletion path counts them at 70% at any age. That gap often decides which path produces the stronger file.
Does Michigan change the program figures?
No. Leverage, haircuts, seasoning and loan amounts are the same everywhere. Michigan is one of the 16 states where Lendmire’s consumer lending is licensed, so a Michigan retiree can request a review.
Can I combine pension income with asset income?
On the depletion path, yes. Asset-derived income may supplement documented income up to a 45% debt-to-income ratio, and the minimum-assets rule is waived when it supplements. The qualifier path documents no income at all.
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
1. Federal Register – Ability-to-Repay and Qualified Mortgage Standards
2. Cornell LII – 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: Brokerage Dividends vs Asset Depletion for a Retiree on a Jumbo Loan · Can a Retiree’s Asset Depletion Funds Count as Jumbo Loan Reserves? · How Big Can an Asset Qualifier Mortgage Be?
Guides: Asset-Based Mortgage in Michigan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.