The Quick Read: Yes, on the asset depletion path, because select lenders in Lendmire’s network allow a cash-out refinance on a Texas principal residence up to 60% loan-to-value, subject to underwriting, while Texas’ separate homestead limits still cap how much equity can come out of the home. Your savings and securities become your qualifying income. The loan is a consumer mortgage on the home you live in. It is not a DSCR loan.
- How the income is built: Eligible assets, after the program’s credit percentages, are divided by 60 months. The result runs through the debt-to-income test.
- The other path: On the asset qualifier path, your assets must cover the whole loan. A cash-out figure for that path is set by each lender and not published, so this article states none.
- Minimum assets on the depletion path: Usable 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.
- Texas still applies: The waiting period, the lien ceiling and the one-loan-at-a-time rule apply no matter how you document income.
- Rentals are a different tool: Cash-out on a rental you do not live in runs through DSCR financing, which qualifies the property rather than you.
Which Path Fits a Cash-Heavy, Income-Light Homeowner?
Pick the path first. Everything else follows from it. Across Lendmire’s wholesale network, asset-based mortgage programs come in two forms, and a borrower is reviewed on one at a time. Never blend the two.
The asset qualifier path asks one question. After the credit percentages below, do your eligible assets equal or exceed the entire loan amount? If so, no employment or income is documented. The asset depletion path turns assets into monthly income, then asks whether that income carries the housing payment and your other debts.
This reader usually looks the same either way: a retiree, someone who sold a business, an inheritance or settlement recipient, an early-retired professional. Big balances. Little documented income.
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| What it proves | Assets cover the loan | Assets create income |
| Income documented | None | Derived from assets |
| Purchase leverage | Up to 80% LTV | Up to 80% LTV, primary or second home |
| Refinance leverage | Up to 75% LTV | Up to 80% rate-and-term, primary or second home |
| Cash-out leverage | Lender-set, not published | Up to 60% LTV, primary or second home |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
All figures are typical ceilings through select programs, subject to underwriting. They are not offers.
The table shows why the depletion path answers your question. It publishes a cash-out ceiling on a principal residence. The qualifier path does not, and Lendmire will not guess at one.
How Does Asset Depletion Turn Savings Into Income?
The lender counts a share of each asset, adds the shares up, and divides the total by 60 months. That quotient is your monthly qualifying income. It then has to carry the full housing payment plus your other debts through the debt-to-income test.
Here is an illustration. Say you hold $1,500,000 in securities and $300,000 in cash. Securities count at 80%, which is $1,200,000. Cash counts at 100%, which is $300,000. That is $1,500,000 of usable assets. Divided by 60 months, it produces $25,000 of monthly qualifying income. The lender’s own calculation governs, and this is only a picture of the mechanics.
What counts on the depletion path:
- Cash accounts and certificates of deposit: 100%
- Securities: 80%
- Retirement accounts: 70% at any age
- Real-estate equity: 60%
Some assets do not count at all on this path. That includes custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options and non-vested restricted stock units. Funds from non-regulated financial companies are out too. Privately held stock is not eligible on either path, so a business owner’s documented route is a sale or buyout converted to a seasoned cash balance.
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. The lender then reviews the source of that cash.
Cash-out proceeds from this very loan never count as qualifying assets. You cannot borrow against the house and then count the cash as your proof.
Seasoning is the waiting period an account must show. On the depletion path, statements must be at least 120 days old at application, plus a most recent statement within 45 days. Sale-of-business, inheritance and legal-settlement funds are excused from that seasoning. The qualifier path asks for 60 days of seasoning and two months of statements per account.
“No income documentation” never means “no documentation.” Your assets are fully documented on both paths, and every file is fully underwritten. You simply skip traditional personal-income documentation, pay stubs and employment verification. Credit still matters, too. The qualifier path has a 600 minimum score. The depletion path follows the lender’s matrix of score and loan amount, and a first-time investor on that path needs 700. Housing history is typically 0x30x12, and multiple bankruptcies are not eligible. Everything stays subject to underwriting.
Asset-derived income can also supplement documented income, up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived.
Why Is a Texas Homestead Cash-Out Not a DSCR Loan?
A DSCR loan is reviewed for the property. An asset depletion loan is reviewed for you. Those are different tools for different buildings.
DSCR stands for debt service coverage ratio: the property’s monthly rent divided by its monthly debt obligation. It is built for rentals. A homestead is the home you live in, and Texas law treats it as a protected category of its own.
So a DSCR cash-out cannot touch your Texas home. A DSCR cash-out on a rental you do not live in does not carry homestead timing or homestead lien limits. That is a separate, business-purpose track.
Key Terms Defined
Homestead: The home you live in as your primary residence. Texas gives it special protection from creditors.
Home equity cash-out (Section 50(a)(6)): The one provision in Article XVI of the Texas Constitution that lets you borrow against a homestead and take cash. Texas lenders often call it an A6 loan.
Asset depletion income: Monthly qualifying income created by dividing usable assets by 60 months. You are not required to spend the assets.
Haircut: The share of an asset the lender discounts. A security counted at 80% has a 20% haircut.
Combined lien ceiling: The Texas cap on all debts secured by the home, added together. It counts the first mortgage, any second lien and the new loan.
Seasoning: How long funds have sat in your account before the lender will count them.
Two Gates, Not One
Every Texas homestead cash-out has to pass two separate gates. The lender’s income test is one. The state’s property rules are the other. Passing the first does nothing for the second.
| Item | Gate 1: Borrower | Gate 2: Texas homestead |
|---|---|---|
| Question | Can you repay? | Can this home secure cash-out? |
| Set by | Program and underwriter | Texas law |
| Assets matter? | Yes | No |
| Flexible? | Varies by program | No lender exception |
Assets help only at gate one. They can make a very strong borrower. They cannot buy an exception at gate two.
The Texas Attorney General’s opinion JC-0357 confirms the basic rule: a lien on a homestead is invalid unless it secures a debt the constitution permits. Home equity lending is one of those permitted debts. Outside it, the lien fails.
Because this is a consumer mortgage on your own home, it is underwritten as one, with standard consumer disclosures and a documented review of your ability to repay. Assets are a recognized way to show that ability. That is why this works at all.
What Happens in Order on a Texas Homestead File
The order matters because Texas builds waiting periods into it. Here is the usual sequence.
1. Confirm occupancy. The home must be your actual primary residence. The program needs proof.
2. Choose the path. Assets covering the loan, or assets converted to income. Cash-out on a principal residence sits on the depletion path.
3. Build the asset pool. The lender applies the percentages, checks seasoning and reviews the source of any large recent deposit. Expect closing funds to come out of the pool before it is counted, though the lender sets that treatment.
4. Appraisal and title work. The title review checks for earlier liens, including any prior home equity loan.
5. Application and Texas disclosure. The state’s required notice goes to every owner, and the spouse signs too.
6. The waiting period. The Texas Office of Consumer Credit Commissioner confirms a 12-day waiting period before a home equity loan can close. The clock starts only after you have applied and received the required disclosure.
7. Itemized disclosure and a clean document set. Per the Texas Legislature’s analysis of the home equity amendment, a final itemized disclosure of fees and charges arrives one day before closing, and blanks cannot be left in the loan documents.
8. Closing at an approved location, followed by Texas’ post-closing cancellation window, then funding.
Texas also limits closing fees, allows only one home equity loan at a time and spaces these loans apart. The exact figures sit in the constitutional text, so confirm them with a Texas title company or closing attorney.
How Much Cash Can You Actually Take Out?
Two ceilings apply, and the lower one wins. One belongs to the program. The other belongs to Texas.
The program ceiling on the depletion path is 60% loan-to-value on a cash-out refinance of a principal residence or second home. The Texas ceiling counts every lien on the home, not just the new loan. A large existing first mortgage eats into the room before you see a dollar.
So the math runs like this. Take the appraised value, apply the lower ceiling, then subtract everything already secured by the home. What is left is the most you can take, before costs.
For many asset-rich owners with a small or no mortgage, the program’s 60% is the tighter ceiling, and a bigger asset pool does not raise it. For owners with a large first mortgage, the Texas combined-lien ceiling may bind first. Either way, the loan amount must also sit within $125,000 to $3,500,000 on this path.
Edge Cases That Change the Answer
A former home now rented out. It is not automatically free of homestead rules. Title work has to check for an earlier home equity lien first. That is a question for Texas title counsel, not DSCR underwriting.
Moving into a property you own. The day you occupy it, it moves toward homestead territory. Occupancy proof matters.
A refinance with no cash out. On the depletion path a rate-and-term refinance on a principal residence is available, subject to the program’s loan-to-value limits. It generally falls outside the home equity cash-out regime. It is still a consumer loan, so it is underwritten as one.
A spouse not on the loan. The spouse still signs the Texas disclosure. A default on a home equity loan can mean losing the home, so this is not a formality.
Trust-owned homes and acreage. These need title and lender review before anyone can say yes. Anything beyond that depends on the file.
A credit line instead of a loan. Texas rules still reach a credit line secured by the homestead. Calling it something else does not change the collateral.
Program availability. Not every asset-based program allows cash-out on a homestead. Some exclude it entirely. Lendmire arranges these loans through select lenders, so availability depends on the lender, the property, and underwriting.
What This Means If You Buy Rentals
The usual play is to split the job. Use asset depletion for the home you live in. Use DSCR for the rentals. They are different tools for different properties.
Pulling cash from your own Texas home to buy rentals means living by homestead rules: the waiting period, the lien ceiling, the one-at-a-time limit. Plan around them. Cash-out on a non-homestead rental is a business-purpose loan that runs on rent coverage and carries none of that. Many investors find the rental route simpler for that reason.
The reverse trap is worth naming. If your assets are large but your reportable income is thin, a traditional income test can understate you badly. Asset depletion fixes that on the residence. It does not make your rentals qualify on your balance sheet, because rentals qualify primarily on property-level rental income covering the payment, subject to lender guidelines.
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.
Common Mistakes
Believing a DSCR loan can cash out a Texas home. It cannot. DSCR is for non-owner-occupied investment property.
Believing asset depletion avoids homestead rules. It does not. Asset depletion is an income-documentation method. Texas limits attach to the home and the transaction.
Believing alternative documentation means no ability-to-repay review. It means the review rests on your assets instead of your pay stubs.
Counting the cash-out as your own asset. Proceeds from this loan never count toward qualifying assets.
Assuming every depletion program is the same. The 60-month divisor, the haircuts and the leverage are the network’s figures. Lenders and other programs differ, sometimes widely.
Skipping the occupancy question. If you do not live in the home, the answer changes completely.
Frequently Asked Questions
Can I use retirement accounts to qualify for a Texas homestead cash-out?
Yes, on the depletion path they count at 70% at any age. On the asset qualifier path, 401(k) and IRA balances count at 90% under age 59½ and 100% at 59½ or older. The qualifier path is a different loan with no published cash-out figure. Subject to underwriting.
Do I need employment or traditional personal-income documentation?
Not on the asset qualifier path, where no employment or income is documented. On the depletion path, income is derived from assets, though a lender can still ask for items that support the file. Assets are fully documented either way.
Is the 12-day wait a problem if I am buying a rental?
Only if the cash comes from your own homestead. The Texas wait is part of home equity lending, and it does not govern a DSCR cash-out on a non-homestead rental. Plan the purchase timeline so the homestead loan is not holding up your offer.
Can I take cash out of a second home instead?
A second home is not a Texas homestead, so the Section 50(a)(6) limits do not attach the same way. The depletion path still allows 60% loan-to-value on a cash-out refinance of a second home, subject to underwriting. A second home also gets the same asset rules.
How much do I need in assets?
On the depletion path, 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 source. The qualifier path needs eligible assets to equal or exceed the whole loan.
Your 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. Lendmire’s consumer mortgage lending is licensed in 16 states, Texas among them, and the brokerage arranges these loans through select lenders in its network. Every file is underwritten individually, and nothing here is a commitment to lend. Reach the team at 828-256-2183 or request a quote. For a closer look at how far to push the draw, see Lendmire’s piece Should You Take the Maximum on a Texas Homestead Cash-Out Refinance?.
Texas homestead cash-out is slow by design, and for an asset-rich owner the smartest move is usually to count the equity ceiling before counting the portfolio.
Lendmire’s asset-based mortgage in Texas page presents the program for Texas borrowers.
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 traditional personal-income documentation understates their income, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
A deeper walk-through of investment-property equity extraction lives in Lendmire’s guide to cash-out refinance on an investment property.
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References
1. Texas Attorney General Opinion JC-0357
2. Texas Office of Consumer Credit Commissioner, Advisory Bulletins & Disclosures
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? · How to Buy Before You Sell in Colorado Using an Asset Qualifier Mortgage · Does a Pennsylvania Asset-Based Mortgage Require Tax Returns?
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.