The Quick Read: Fannie Mae’s asset method is narrow: it turns employment-related assets, mostly accessible retirement accounts, into income over a long divisor, while a non-QM asset loan counts cash, brokerage, CDs and retirement balances and either lets assets cover the whole loan or converts them to income over 60 months. Many Michigan borrowers with big balances and light documented income land on the non-QM side. Fannie fits when your wealth sits in retirement accounts and you want a primary home or second home.
- Fannie counts mainly retirement-type assets. Ordinary cash and brokerage balances generally do not count.
- The non-QM asset qualifier path covers the entire loan with eligible assets and documents no employment or income.
- The non-QM asset depletion path divides usable assets by 60 months into qualifying income that runs through the debt-to-income test.
- Investment property is available only on the non-QM depletion path, subject to underwriting.
Here is the honest answer on who each option is for. Fannie Mae’s version suits a retiree or near-retiree whose money is mostly in an IRA or 401(k), buying a home to live in or a second home. It is conservative and rule-bound. The non-QM version suits someone whose wealth is spread across savings, brokerage accounts, CDs and retirement funds, or someone buying a rental. It is more flexible and gives more room on asset types. Neither one is automatically better. Your balance sheet decides.
Side-by-Side
| Factor | Fannie Mae (published norms) | Non-QM asset-based (network) |
|---|---|---|
| Review basis | Employment-related assets become income | Qualifier: assets cover the loan. Depletion: assets ÷ 60 |
| Assets counted | Mainly accessible retirement accounts, severance | Cash, brokerage, CDs, retirement; credit % set by path |
| Documentation | Agency rules, 3-year continuance of income | Statements for each account; no employment on qualifier path |
| Property types | Reported: primary or second home | Primary and second home; investment on depletion path only |
| Entity vesting | Individual borrowers | Consumer loan to an individual; entity terms not published |
| Reserves | Reserves come out of the usable asset pool | Qualifier: none at or below 75% LTV. Depletion: none published |
| Seasoning | Agency document-age rules | Qualifier: 60 days. Depletion: 120-day-old statement plus one within 45 days |
The Fannie column shows published industry norms, not Lendmire figures. Confirm those against the current Selling Guide before relying on them. The non-QM column reflects the network’s asset-based programs, subject to underwriting and lender guidelines.
Key Terms Defined
Non-QM: a mortgage that falls outside the standard agency box, so each lender sets its own rules for how you qualify.
Haircut: the share of an account’s balance a lender refuses to count, because the balance can swing in value or be hard to reach.
Divisor: the number of months you spread your usable assets across to produce a monthly income figure.
Seasoning: how long money must sit in your account, shown on statements, before it counts.
Continuance: proof that income will last. Fannie’s general income rules require income that depends on drawing down an asset account to continue at least three years from the application date, per the Fannie Mae Selling Guide on general income.
When Fannie Mae Is the Better Fit
Fannie’s approach works when your assets match its definition closely. Per an Enact mortgage-insurer training deck, the eligible pool is employment-related assets: retirement accounts you can access (401(k), IRA, SEP, Keogh) plus documented severance or lump-sum retirement distributions. The same deck says ordinary cash, brokerage balances, gifts, inheritance and sale proceeds generally do not qualify. It also says any penalty that would apply on a full distribution comes off the balance first.
Market surveys report that the agency divisor equals the loan term, which is 360 months on a 30-year loan, and that the method is limited to a principal residence or second home, per Statements Ready’s Fannie versus Freddie breakdown. Compare that with the 60-month divisor on the network’s non-QM depletion path. A longer divisor means less income from the same pile. Confirm every agency figure against the guide itself.
So Fannie makes sense in a few situations:
- Retirement-heavy borrower. You are 62, most of your net worth is in an IRA, and you want a primary home. The agency loan box is built for that.
- Standard-box preference. You want a loan that fits conventional guidelines and your file is otherwise clean.
- Modest leverage need. You are putting meaningful money down and the lower qualifying income still carries the payment.
A Michigan retiree buying a lake cabin as a second home could fit here. The same retiree buying a rental won’t, because the reported agency method does not extend to investment property.
When a Non-QM Asset Depletion Loan Is the Better Fit
Non-QM wins when your wealth is not retirement-shaped, or when the property is not a home you live in. Lendmire arranges asset-based mortgages through select lenders in its wholesale network, and those programs split into paths. You qualify on one path at a time.
Asset qualifier path. Your eligible assets, after the credit percentages, must equal or exceed the entire loan. No employment or income is documented. Brokerage accounts, CDs, money market and savings count at 100%. A 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. Leverage runs up to 80% on a purchase and 75% on a refinance, for a principal residence or second home. Loans go up to $4,000,000. Credit starts at a 600 minimum score. Seasoning is 60 days, with two months of statements for each qualifying account. Reserves are not required at or below 75% loan-to-value, and above that the lender sets them.
Asset depletion path. Usable assets are divided by 60 months to produce qualifying income. That income must carry the full housing payment and other debts through the debt-to-income test. Haircuts apply:
- Cash and CDs count at 100%.
- Securities count at 80%.
- Private stock counts at 75%.
- Retirement accounts count at 70% at any age.
- Real-estate equity counts at 60%.
On a principal residence or second home, leverage reaches 80% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. Loans run $125,000 to $3,500,000. Credit follows the lender’s matrix, and a first-time investor needs a 700 score. Cash-out proceeds never count as qualifying assets.
Qualified assets must total at least the lesser of $1,000,000 or 1.25 times the loan balance, and never less than $250,000 liquid when asset depletion is your only income source. If asset income only supplements documented income, up to a 45% debt-to-income ratio, that minimum-assets rule is waived.
Not every asset is welcome. 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 are out on the depletion path. 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 converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Same Assets, Two Different Answers
Run the network’s illustrative numbers. The lender’s own calculation governs the real thing.
Qualifier path: an $800,000 loan with $330,000 in brokerage accounts (100% = $330,000), $300,000 in a 401(k) under 59½ (90% = $270,000) and $200,000 in savings (100% = $200,000). That counts $800,000 of usable assets and is reviewed on assets alone, subject to underwriting.
Depletion path: $1,500,000 in securities (80% = $1,200,000) plus $300,000 in cash (100% = $300,000) is $1,500,000 usable. Divided by 60 months, that is $25,000 of monthly qualifying income. That income then carries the housing payment and other debts through the debt-to-income test.
Now picture the same borrower at the Fannie door. The securities and cash are exactly the kind of balances Fannie generally leaves out unless they trace to a qualifying employment-related distribution. Only the retirement money would count, and over a much longer divisor. That gap is the main reason brokers look at non-QM first for cash-and-brokerage borrowers. If you want the wider comparison of income methods, Lendmire’s piece Bank Statement vs 1099-Only vs Asset Depletion for Liquid-Asset Borrowers walks through it.
Where Files Get Stuck
Across the wholesale network, a few problems come up repeatedly.
- Wrong asset type for Fannie. The balance is large, but it sits in brokerage or savings. Fix: look at the non-QM paths instead.
- Fresh money. Funds that landed recently and lack statement history. Fix: let seasoning run. The depletion path excuses sale-of-business, inheritance and legal-settlement funds from the 120-day statement rule, but those still get documented.
- Assets that are not on the list. Crypto, collectibles or a business account. Fix: convert to a seasoned cash balance in a regulated account.
- Confusing the two paths. A borrower reads the 100% credit on the qualifier path and assumes it applies to the depletion path. It doesn’t. Never blend the two tables.
- Housing event. A depletion-path borrower with a recent foreclosure or bankruptcy needs 4 years of seasoning, and multiple bankruptcies are not eligible.
The assets are documented on both paths. No employment or income documentation on the qualifier path does not mean no documentation at all.
Is Non-QM Less Safe?
No. Non-QM does not mean no underwriting. The CFPB’s assessment of the ability-to-repay rule describes the lender’s duty to make a reasonable, good-faith determination that you can repay. A lender can base that on income, on assets, or on both. On the qualifier path, that review rests on your assets. On the depletion path, it runs through the debt-to-income test. Your credit, your leverage and your statements still get reviewed.
Michigan Specifics
Consumer mortgage lending is licensed in 16 states, Michigan among them, and the program figures above do not change by state. Where you live affects the property, not the program math. A Michigan borrower might use the agency route for a primary home or a northern lake cabin held as a second home. The same borrower might use the non-QM depletion path for a rental. Taxes and insurance vary by county, so budget for them separately. Whether a program allows a property to be vested in an LLC varies, so confirm entity vesting early if you hold property that way.
If the property you want is a pure rental and you would rather qualify on the building’s income than your balance sheet, business-purpose financing is DSCR, covered in Lendmire’s complete DSCR loans guide. Buyers at the top end after a sale may also want Lendmire’s look at super jumbo requirements after a sale.
Retirement withdrawals can raise their own questions.
The Verdict
Pick Fannie Mae if your money is mostly in accessible retirement accounts, the property is a home you will live in or a second home, and you are comfortable with a lower qualifying income. Pick non-QM if your assets are cash, brokerage and CDs, if you want investment property, or if you want assets to cover the loan outright without documenting income. Both have trade-offs. Fannie is tighter on what counts. Non-QM is broader but follows each lender’s matrix and is underwritten file by file.
Many borrowers can run both scenarios on paper before choosing. Programs change, and every file is underwritten individually.
Frequently Asked Questions
Can I use asset depletion on an investment property?
Only on the non-QM depletion path. Leverage there tops out at 65% on a purchase or rate-and-term refinance and 60% on a cash-out refinance for an investment property, subject to underwriting. Market surveys describe the agency method as limited to a principal residence or second home.
Do I have to sell my investments to qualify?
No. The assets stay in place and serve as a calculation base. You still document them with statements, and the program’s seasoning rules apply. Cash-out proceeds from the new loan never count as qualifying assets.
Are retirement accounts eligible?
Yes on both sides, with different treatment. Fannie focuses on accessible retirement accounts. On the non-QM qualifier path, a 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. On the depletion path, retirement accounts count at 70% at any age.
Is crypto eligible?
Not as published on either non-QM path. The documented route is converting it to cash, letting it season in a regulated account, and having the lender review the source.
Which gives more qualifying income?
Usually the non-QM depletion path. It divides usable assets by 60 months, while market surveys report Fannie’s divisor matches the loan term. A different mix of assets can change the answer, so compare on your own statements.
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. You can reach the team at 828-256-2183.
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
1. Fannie Mae Selling Guide, B3-3.1-01 General Income Information
2. Enact MI, Assets and Repayment Obligations training deck
3. Statements Ready, Asset Depletion: Fannie Mae vs. Freddie Mac
4. CFPB’s assessment of the ability-to-repay rule
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Does an Asset Depletion Loan Require Any Income? · Can You Do a Cash-Out Refinance on an Asset Depletion Loan? · Retirement Account Withdrawals vs Asset Depletion for a Jumbo Loan
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.