The Quick Read: Yes, through select programs a Texas home can be cashed out on the asset depletion path, where seasoned assets are divided over 60 months into qualifying income, and a principal residence also has to meet Texas home-equity rules on top of the program’s own leverage ceiling. Every file is underwritten individually, so nothing here is a commitment to lend.
- Asset depletion cash-out tops out at 60% loan-to-value on a primary residence, a second home, or an investment property, subject to underwriting.
- On a primary residence, any cash back makes the loan a Texas home-equity loan, even when assets qualify the borrower.
- A rental sits outside the homestead rules, so the lender’s program limits are the main constraint.
- Cash-out proceeds never count toward the qualifying assets.
Lendmire arranges these loans as a broker through select lenders in its wholesale network. Consumer mortgage lending is licensed in 16 states, Texas among them. The sections below cover which path fits, how assets become income, what Texas adds, and where files fall apart.
Which Path Fits a Cash-Heavy, Income-Light Texas Borrower?
Two asset-based paths exist across Lendmire’s wholesale network, and a borrower is qualified on one at a time. The asset qualifier path covers the entire loan with eligible assets and documents no employment or income. The asset depletion path turns usable assets into monthly income, and that income runs through the debt-to-income test.
The qualifier path allows up to 80% loan-to-value on a purchase and 75% on a refinance of a principal residence or second home. Whether cash-out proceeds are allowed on that path, and at what leverage, is set by the individual lender. It is not published, so treat it as a question for a specific file, not a given.
The depletion path is the one that clearly addresses cash-out. It allows 60% loan-to-value on a cash-out refinance of a principal residence or second home. An investment property also tops out at 60% on a cash-out. Loan amounts run from $125,000 to $3,500,000 on this path, subject to underwriting.
Retirees, people who sold a business, and households living off a portfolio tend to fit. Their balances are large and their documented income is small. Assets are documented on both paths. Skipping income documentation never means skipping documentation: the file has no traditional personal-income documentation, pay stubs or employment verification, but it is fully underwritten.
How Asset Depletion Turns Savings Into Income
The lender counts only a share of each balance, adds up the usable total, and divides by 60 months. That result is your monthly qualifying income. It then has to carry the new housing payment and your other debts.
The depletion path applies these haircuts through select programs:
| Asset type | Share that counts |
|---|---|
| Cash accounts | 100% |
| Certificates of deposit | 100% |
| Securities | 80% |
| Private stock | 75% |
| Retirement accounts (any age) | 70% |
| Real-estate equity | 60% |
Custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options, and non-vested restricted stock units are not eligible. Cryptocurrency, precious metals, and collectibles are not published as eligible either. The documented route is to convert them into a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Here is the arithmetic, which is illustrative only and always subject to the lender’s own calculation. A borrower holds $1,500,000 in securities and $300,000 in cash. The securities count at 80%, which is $1,200,000. The cash counts at 100%, which is $300,000. Usable assets total $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income.
Nothing is sold or pledged. The assets only show the lender that repayment capacity exists.
The program also sets minimums. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When asset depletion is the only income source, the borrower also needs at least $250,000 liquid. Asset-derived income can supplement documented income up to a 45% debt-to-income ratio, and in that case the minimum-assets rule is waived.
What the Qualifier Path Counts
The qualifier path credits assets differently, and the two tables never blend.
| Asset type | Share that counts |
|---|---|
| Brokerage accounts | 100% |
| Certificates of deposit | 100% |
| Money market | 100% |
| Savings | 100% |
| 401(k) and IRA, under 59½ | 90% |
| 401(k) and IRA, 59½ or older | 100% |
Accounts combine. Take an $800,000 loan backed by $330,000 in brokerage accounts, $300,000 in a 401(k) under 59½ (counted at 90%, or $270,000), and $200,000 in savings. Together they count $800,000 and qualify on assets alone. The lender’s calculation governs.
What Changes on a Texas Homestead
A cash-out on your primary residence is a Texas home-equity loan, often called an A6 loan, whatever method qualifies you. Asset depletion is only an income method. It does not exempt the loan from the state’s homestead rules.
The Texas Constitution’s homestead article protects a family home or a single adult’s home from forced sale. It lists a narrow set of exceptions, and the home-equity loan is one of them. The same text bars closing before the 12th day after the lender gives the required notice, so a homestead cash-out has a built-in waiting step that a rental does not.
The state regulator’s commentary on equity lending says approximately 26 elements must each be met. The constitution also caps total liens against the home and caps lender fees. A homestead file also carries Texas notices and disclosures. Closing must take place at a lender, attorney, or title office.
A rate-and-term refinance is generally not an A6 loan, and any cash back changes that. A refinance that advances more than the payoff and costs can also be treated as an equity loan. Plan the loan amount with that in mind.
What Changes on a Texas Rental
Rental property sits outside the homestead framework, and the lender’s program rules decide the cash-out. A broker reply in a BiggerPockets thread on Texas cash-out says the same thing about rentals. That is investor commentary, not law.
On the depletion path, an investment property cash-out is capped at 60% loan-to-value. That is lower than the 65% available on an investment-property purchase or rate-and-term refinance.
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. The Regulation Z commentary treats credit to acquire, improve, or maintain non-owner-occupied rental property as business purpose.
If the rent covers the payment, a DSCR cash-out is usually the cleaner tool, and the borrower’s assets stay in the account. Asset depletion is the fallback when rent is thin, when the unit sits vacant, or when the borrower wants a single income method across several properties. Sub-1.00 coverage is available through select lenders in the network, but leverage and terms adjust.
A home that used to be a homestead needs a title check. Texas treats a prior A6 lien as something that can follow the property, so a title review should clear it before the cash-out is planned. Lendmire’s piece How Texas Cash-Out Rules Apply to an Asset Depletion Refinance covers the state rules in more depth.
Which Limit Binds First?
On most homestead files the program’s cash-out ceiling is the tighter limit, since 60% sits below what the constitution allows in total liens. Title counsel confirms the state cap. A modest-equity borrower is a different case. Existing liens count toward the cap, so thin equity can bind first.
Here is how three borrowers tend to run:
1. The high-asset retiree. Usable assets are large and the home has deep equity. The 60% program ceiling decides the proceeds.
2. The modest-equity homeowner. Assets are plentiful, but the first mortgage already uses most of the allowed lien room. Equity decides the proceeds, and the asset pool does not matter.
3. The portfolio borrower with a rental. There are no homestead limits. The 60% rental ceiling and the minimum-assets rule decide the file.
Documents and Seasoning
The depletion path wants statements 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. The qualifier path wants 60 days of seasoning and two months of statements per qualifying account.
Expect a title and appraisal package, and expect to explain large deposits. A homestead file adds the Texas notices and disclosures. A rental file typically adds a lease or a market-rent appraisal.
Credit is reviewed against the lender’s score and loan-amount matrix on the depletion path. The qualifier path has a 600 minimum. A first-time investor on the depletion path needs 700. Housing history is 0x30x12, and one 30-day late in the last twelve months is considered case by case. A housing event needs 4 years of seasoning on the depletion path. Multiple bankruptcies are not eligible.
Each refinance is requalified from scratch, including assets, credit, and the property. Nothing carries over from an earlier loan.
Where These Files Fall Apart
The same few problems come up again and again:
- Cash-out proceeds counted as assets. They never count as qualifying assets, so a file that assumed them gets rebuilt.
- Assets used twice. Money needed for closing costs or a down payment on another property shrinks the pool before it is divided by 60.
- Wrong asset class. Crypto, collectibles, and borrowed funds do not count until converted to seasoned cash in a regulated account.
- Retirement account assumptions. On the depletion path retirement accounts count at 70% at any age, which surprises borrowers who expect a higher share.
- Occupancy misclassified. A second home treated as an investment property, or a primary residence treated as a rental, changes the whole rule set.
- Stale statements. The 120-day and 45-day rules on the depletion path catch files assembled from old paperwork.
- Liens not cleared. A former A6 loan or an unrecorded lien surfaces at title and holds up the file.
Is Asset Depletion the Right Tool? A Comparison
| Program | What carries repayment | Best fit |
|---|---|---|
| Asset depletion | Assets divided by 60 months | Large balances, small income |
| Asset qualifier | Assets cover the whole loan | Cash-rich borrowers, no income docs |
| DSCR | Property rent covers the payment | Rentals with solid rent |
| Bank statement | Deposits document income | Self-employed with deposits |
Texas homestead rules apply to the asset-based and bank statement programs when the loan is secured by a primary residence. DSCR loans are for non-owner-occupied investment property, so the homestead rules do not reach them, and they do not reach any rental.
Tax treatment varies; consult a qualified professional before relying on any deduction.
Key Terms Defined
Asset depletion: A method that divides usable assets by 60 months to create monthly qualifying income.
Asset qualifier: A method where eligible assets must equal or exceed the entire loan amount.
A6 loan: A Texas home-equity loan secured by a homestead, governed by the state constitution.
Homestead: The home a Texas borrower lives in as a primary residence, protected from forced sale.
Haircut: The share of an asset’s balance that the lender does not count.
Seasoning: The time funds must sit in an account before the lender counts them.
Frequently Asked Questions
Can I use retirement accounts for a Texas asset depletion cash-out?
Yes, through select programs. On the depletion path, retirement accounts count at 70% at any age. The balance is not withdrawn or sold, and the lender reviews the statements.
Do I have to sell my investments?
No. The assets are documented and counted, and they stay where they are. They are not pledged to the lender.
Does a Texas rental face the same cash-out limits as my home?
No. The homestead constitutional rules apply to a primary residence, not to rentals. A rental cash-out follows the lender’s program, which is 60% loan-to-value on a cash-out refinance of an investment property on the depletion path.
Can the cash I take out count as qualifying assets?
No. Cash-out proceeds never count toward the qualifying assets on the depletion path. Only seasoned assets that existed before the loan are counted.
Is asset depletion the best choice for a rental with strong rent?
Usually not. If rent covers the payment, a DSCR loan keeps the file simpler and leaves the assets untouched. Asset depletion works better when rent is thin or the unit is vacant.
Next Step
If you are qualifying on assets rather than income and want to see how the numbers work, Lendmire can help you compare options through its asset-based mortgage programs based on your statements, the property, credit profile, leverage, and your goals.
Lendmire’s asset-based mortgage in Texas page presents the program for Texas 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.
For the mechanics of pulling equity out of a rental property, see Lendmire’s guide to cash-out refinance on an investment property.
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References
1. Texas Constitution, Article XVI, Section 50
2. BiggerPockets: Cash-Out Refinancing in Texas
3. CFPB Regulation Z Section 1026.3 Commentary
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Asset Qualifier vs Asset Depletion for a Retired Landlord · How Much Cash Can an Ohio Homeowner Take Out on an Asset Depletion Refinance? · Can Two Texas Retirees Buy a Home Together on an Asset Qualifier Mortgage?
Guides: Asset-Based Mortgage in Texas
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.