The Quick Read: Yes, on the asset depletion path, through select programs and subject to underwriting, cash-out is available at up to 60% loan-to-value on a Michigan primary residence, second home or investment property. On the other asset-based path, the asset qualifier path, cash-out is set by the lender and is not published. Home equity never counts as the qualifying asset.
- On the asset depletion path, a cash-out refinance on a primary residence, second home or investment property tops out at 60% loan-to-value.
- Cash-out proceeds never count toward the assets that qualify you on the depletion path.
- The depletion path divides usable assets by 60 months to create qualifying income, which then runs through a debt-to-income test.
- The qualifier path covers the entire loan with eligible assets and documents no employment or income.
- A Michigan rental owner who wants cash out usually has a simpler route through a DSCR loan.
Two Paths, and You Qualify on One at a Time
The first question is which asset-based path fits you. Across Lendmire’s wholesale network, asset-based mortgages come in two forms, and a borrower is qualified on one of them at a time.
The asset qualifier path asks one thing. Your eligible assets, after the credit percentages, must equal or exceed the entire loan amount. No employment or income is documented.
The asset depletion path turns assets into income. Usable assets, after haircuts, are divided by 60 months. That monthly figure must carry the full housing payment and your other debts.
Cash-out is where the paths split. The table shows what each allows for a Michigan home, through select programs and subject to underwriting.
| Path | Cash-out on a refinance? | What carries the loan |
|---|---|---|
| Asset qualifier | Set by lender, not published | Assets cover the whole loan |
| Asset depletion, primary or second home | Yes, up to 60% LTV | Assets converted to income |
| Asset depletion, investment property | Yes, up to 60% LTV | Assets converted to income |
| DSCR loan (rental) | Program-specific | Rent covering the payment |
Leverage is the other split. On the depletion path, a primary residence or second home reaches 80% loan-to-value on a purchase or rate-and-term refinance, but only 60% on a cash-out.
Key Terms Defined
Loan-to-value (LTV): the new loan balance divided by the home’s appraised value, shown as a percentage.
Rate-and-term refinance: a refinance that replaces the existing loan without putting extra cash in your hands.
Cash-out refinance: a refinance where the new loan is larger than what you owe and you receive the difference.
Haircut: the share of an account’s balance a lender refuses to count, because the asset can swing in value or carries a penalty to access.
Seasoning: how long funds must sit in an account, or how old statements must be, before a lender trusts them.
Debt-to-income (DTI): your monthly debts, including the new housing payment, compared with your monthly qualifying income.
DSCR: debt service coverage ratio, meaning a rental’s monthly income compared with its full monthly payment of principal, interest, taxes and insurance.
How the Depletion Math Works
The depletion path starts with an inventory of your accounts. Each account gets a percentage: cash accounts and certificates of deposit count at 100%. Securities count at 80%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%.
Here is the shape of a sample file. Say you hold $1,500,000 in securities, counted at 80% for $1,200,000. Add $300,000 in cash, counted at 100%. Usable assets come to $1,500,000. Divide by 60 months and you get $25,000 of monthly qualifying income.
That income must then carry the housing payment and every other debt through the debt-to-income test. The lender’s own calculation governs, and this example is illustrative only.
Two minimums apply on this path. Qualified assets must reach at least the lesser of $1,000,000 or 1.25 times the loan balance. When asset depletion is your only income source, you also need at least $250,000 in liquid assets.
Asset income can also supplement documented income, up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived.
The qualifier path works differently. Picture an $800,000 loan. You hold $330,000 in brokerage accounts (counted at 100%), $300,000 in a 401(k) while under 59½ (counted at 90%, or $270,000) and $200,000 in savings (100%). Usable assets total $800,000, which equals the loan, so the file is reviewed on assets alone, subject to underwriting. Retirement balances count at 100% once you reach 59½.
Why Cash-Out Is Treated Differently
A purchase or rate-and-term refinance replaces debt. A cash-out puts new money in your pocket, so underwriters pull leverage back. That is why the depletion path drops from 80% to 60% loan-to-value on a primary residence or second home.
Lenders also decide what counts as cash-out. A refinance that only pays off the old loan is not cash-out, and one that hands you the difference is. The classification sets your leverage ceiling, so confirm it before you plan around a number. The same classification applies to a home you own free and clear.
Does Home Equity Count as My Asset?
No, and this misconception trips up many equity-rich borrowers. When a consumer mortgage is made on your home, federal ability-to-repay guidance says the lender must consider your income or assets other than the value of the dwelling securing the loan, per the CFPB ability-to-repay compliance guide.
In practice, the house you are refinancing cannot be the asset that qualifies you. Cash-out proceeds also never count as qualifying assets on the depletion path. Equity in a different property can count at 60%, subject to underwriting.
Asset depletion is also not borrowing against your portfolio. Your accounts are not pledged and not sold. They are documented and converted into a qualifying figure.
What Counts, and What Does Not
Eligible assets differ by path, so never blend the two lists.
- Qualifier path: brokerage accounts, certificates of deposit, money market and savings count at 100%. Retirement accounts count at 90% under 59½ and 100% after. Accounts combine.
- Depletion path: the percentages above apply. 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.
Cryptocurrency, precious metals, collectibles, pledged or borrowed funds and business accounts beyond your ownership share are not published as eligible on either path. The documented route is to convert them to a seasoned cash balance in a regulated account. The lender reviews the source of those funds.
Credit matters too. The depletion path follows the lender’s matrix, and a first-time investor on that path needs 700. Housing history is typically 0x30x12, and one late payment in the last twelve months is considered case by case. A housing event needs 4 years of seasoning on the depletion path.
If the Michigan Home Is a Rental
Most Michigan rental owners should compare a DSCR loan before anything else. 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, and federal rules deem credit for non-owner-occupied rental property to be business purpose, per Regulation Z.
A DSCR file qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Your personal income and asset math matter far less. Programs below 1.00 coverage are available through select lenders in the network, but loan-to-value and terms adjust.
Asset depletion still has a place on a rental. It suits an investor with strong savings and light documented income who wants consumer-style qualification on an investment property. Even then the ceiling is 60% loan-to-value on a cash-out, and DSCR may offer different leverage.
Where the rental becomes your own residence, the occupancy changes the whole picture. A home that is or will be owner-occupied is a consumer-mortgage file, which brings you back to the two asset paths above.
What Michigan Changes (and What It Does Not)
Michigan changes how the home is used, not the program figures. The percentages, leverage ceilings and seasoning rules above do not shift by state. Lendmire’s consumer mortgage lending is licensed in 16 states, and Michigan is one of them.
What matters on a Michigan file is occupancy and property type. A lake cottage you use a few weeks a year is a second home. A duplex you rent out is an investment property. A house you live in is a primary residence. Each maps to a different leverage line above.
Your Alternatives If Cash-Out Isn’t Available
If the cash-out ceiling is too low or the property doesn’t fit, you have other routes. Use the one that matches how you document.
- Rate-and-term refinance on the depletion path: higher leverage, 80% on a primary residence or second home, but no cash to you.
- DSCR cash-out on a rental: qualification rests on the rent covering the payment. See Lendmire’s complete DSCR loans guide for how that works.
- Bank statement program: built for borrowers who document income with deposits, such as self-employed owners.
- Agency-backed conventional loans: these have their own narrow rules on which assets count, and true cash-out is usually a non-agency conversation.
- A home equity line or second lien: a separate product with its own guidelines.
Three Borrowers, Three Paths
The retiree with a paid-off Michigan home. Savings, brokerage accounts and an IRA total well above the minimums. On the depletion path, the usable pool becomes monthly income, and a cash-out is capped at 60% loan-to-value on a primary residence. On the qualifier path, assets could cover the whole loan outright, but the lender sets any cash-out terms.
The business seller. Sale proceeds sit in cash after the sale. Sale-of-business, inheritance and legal-settlement funds are excused from the seasoning requirement on the depletion path. You still document the funds with statements.
The investor-owner of a rental. Documented income is modest after write-offs, but equity is strong. DSCR is usually the first comparison, since rent carries the loan. If you own the rental and want it financed as a consumer loan, the depletion path allows a 60% loan-to-value cash-out on an investment property.
Documents Lenders Ask For
Asset-based files are documented. The assets are verified even though income is not. “No income documentation” never means no documentation.
- Qualifier path: two months of statements for each qualifying account, with 60 days of seasoning.
- Depletion path: statements at least 120 days old at application, plus the most recent statement within 45 days.
- Both paths: a source explanation for any large recent deposit, and the standard property documents.
Common reasons a file stalls include mixing the two paths, counting an ineligible account, and assuming home equity qualifies. Another is a pool that shrinks after the lender subtracts funds needed for the transaction.
Costs and Tradeoffs Versus Selling Investments
Borrowing against the home lets you stay invested. It also adds a loan, and the new balance sits on the home. Selling investments avoids debt but gives up the holdings.
Tax treatment varies, so consult a qualified professional before choosing between the two.
Passing a qualification test is not the same as positive cash flow. If you are cashing out a rental, vacancy, repairs and management sit outside the coverage ratio. Plan for them separately.
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.
Frequently Asked Questions
Can my cash-out proceeds count as qualifying assets?
No, not on the depletion path. Cash-out proceeds never count toward the assets that qualify you there. You qualify on what you held before the loan, and the lender subtracts any funds needed for the transaction.
Do I have to sell or pledge my investments?
No. On both paths, your accounts stay in place. They are documented through statements and counted at the percentages above. Nothing is pledged as collateral.
Can I use my IRA or 401(k)?
Yes, through select programs. On the qualifier path, retirement balances count at 90% under 59½ and 100% at 59½ or older. On the depletion path, they count at 70% at any age.
Can I use asset depletion on a Michigan rental property?
Yes, on the depletion path, with 65% loan-to-value on a purchase or rate-and-term refinance and 60% on a cash-out. Many rental owners compare DSCR first, because it is reviewed on property rent rather than personal assets.
What credit score do I need?
The qualifier path has a 600 minimum score. The depletion path follows the lender’s score and loan-amount matrix, and a first-time investor needs 700. Housing history is reviewed alongside the score, and all of it is subject to underwriting.
Investors weighing their equity options can start with Lendmire’s guide to cash-out refinance on an investment property.
Lendmire’s asset-based mortgage in Michigan page presents the program for Michigan borrowers.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps self-employed and high-net-worth borrowers in 16 states qualify on bank statements, a profit-and-loss statement, 1099s or liquid assets instead of tax returns, through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and its guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB Ability-to-Repay and Qualified Mortgage Small Entity Compliance Guide
2. CFPB Regulation Z, 12 CFR 1026.3
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 Cash-Out Refinance · How Jumbo Loan Asset Depletion Rules Work for a Second Home · Does an Asset Depletion Loan Require Any Income?
Guides: Asset-Based Mortgage in Michigan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.