The Quick Read: The two paths answer different questions. The asset qualifier path asks whether your eligible assets can cover the entire loan, and it documents no income. The asset depletion path turns your assets into monthly income, and that income must then carry the payment and your other debts. Both are consumer mortgage programs placed through select lenders, subject to underwriting.
- Asset qualifier path: eligible assets must equal or exceed the whole loan amount, and no employment or income is documented.
- Asset depletion path: usable assets divided by 60 months become qualifying income, which runs through the debt-to-income test.
- A borrower is reviewed on one path at a time. The two sets of percentages never blend.
- Assets are documented on both paths. Skipping income documentation is not the same as skipping documentation.
- Retirement money counts differently on each path, and age 59½ matters on only one of them.
Who Each Path Is Really For
The qualifier path suits a retiree whose liquid assets are at least as large as the loan. The depletion path suits a retiree who wants to keep a large share of the portfolio, because the assets only have to produce an income figure.
Picture two Texas retirees. The first holds brokerage, savings and a 401(k), and wants a mortgage no larger than that pool. She can show assets covering the whole balance and never touch an income calculation. The second holds mostly securities and cash, and he does not want to commit nearly all of it to one loan. He needs the portfolio to read as steady monthly income.
Neither path is better in the abstract. The qualifier path asks more of the asset pool and nothing of your debts. The depletion path asks less of the pool but puts every monthly obligation under a debt-to-income test.
Across the wholesale network Lendmire works with, both paths are placed through select lenders. Lendmire is the broker, not the lender, and its consumer mortgage lending is licensed in 16 states, Texas among them. The figures below are program ceilings and floors, not offers. Every file is underwritten individually.
Side-by-Side
The table shows the two paths as placed through Lendmire’s network. Each row names its own path, and the figures never mix.
| Factor | Asset Qualifier Path | Asset Depletion Path |
|---|---|---|
| Review basis | Assets cover the entire loan | Assets become monthly income |
| Income documented | None | Derived from assets, run through DTI |
| Purchase leverage | Up to 80% LTV | Up to 80% (primary/second); 65% (investment) |
| Refinance leverage | Up to 75% LTV | 65% rate-and-term; 60% cash-out |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Property use | Primary residence, second home | Primary, second home, investment |
| Statements | Two months per account | 120-day-old plus one within 45 days |
| Reserves | None at or below 75% LTV | No published reserve months |
| Credit | 600 minimum score | The lender’s matrix |
Two cautions apply. The qualifier path does not publish cash-out terms, so assume none until a lender confirms them. And on the depletion path, cash-out proceeds never count as qualifying assets.
Key Terms Defined
Asset qualifier path: a structure where eligible assets, after the credit percentages, must equal or exceed the whole loan.
Asset depletion path: a structure where eligible assets, after haircuts, are divided by 60 months to create qualifying income.
Haircut: the share of an account’s balance that the lender does not count.
Seasoning: how long the funds have sat in the account, shown by statements.
Debt-to-income (DTI): monthly debts, including the new housing payment, compared with monthly income.
Usable assets: the balance left after haircuts or credit percentages are applied.
How the Math Works on Each Path
On the qualifier path, you total each account at its credit percentage and compare the result with the loan. On the depletion path, you total each account at its haircut, divide by 60 and test the income against your debts. Both examples below are illustrative, and the lender’s own calculation governs.
Qualifier example. Take an $800,000 loan. The borrower holds $330,000 in brokerage accounts, which count at 100%, so $330,000. She holds $300,000 in a 401(k) while under 59½, which counts at 90%, so $270,000. She holds $200,000 in savings at 100%, so $200,000. Usable assets come to $800,000, which equals the loan, so she is reviewed on assets alone, subject to underwriting.
Depletion example. Take $1,500,000 in securities, which count at 80%, so $1,200,000. Add $300,000 in cash at 100%, so $300,000. Usable assets total $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income. That income must then carry the housing payment and other debts through the debt-to-income test.
The qualifier example needs the whole loan covered. The depletion example needs the portfolio to produce enough income. A retiree with heavy debts can find that the second test is the harder one, even with a large portfolio.
When Asset Qualifier Is the Better Fit
The qualifier path fits best when the asset pool is at least as large as the loan, when you carry other debts, and when you do not want a debt-to-income test involved.
- You carry meaningful monthly debts. No income is derived, so no ratio is run. Existing obligations do not shrink your qualifying room the way they would on the depletion path.
- Your wealth sits in retirement accounts and you are 59½ or older. On this path a 401(k) or IRA counts at 100% after 59½. On the depletion path, retirement accounts count at 70% at any age.
- You are buying or refinancing a primary residence or second home. The qualifier path covers those two uses, with loans up to $4,000,000.
- You want simple reserve math. No reserves are required at or below 75% loan-to-value. Above that, the lender sets them.
The tradeoff is real. Qualifying means your eligible assets must reach the full loan balance. That commits a large share of the portfolio on paper, and the lender will want statements showing 60 days of seasoning. If your assets only barely cover the loan, you have little cushion for market swings between statement date and approval.
Credit is also firmer here. The published floor is a 600 score, and housing history is expected to be clean, with one 30-day late in the last twelve months considered case by case.
When Asset Depletion Is the Better Fit
The depletion path fits best when the portfolio is large relative to the loan, when you hold mostly securities or cash, or when the property is an investment rental.
- Your assets are large but the loan is modest by comparison. Because assets only need to produce income, you do not have to cover the whole loan with them.
- Your debts are light. Every dollar of existing debt competes with the new payment inside the debt-to-income test, so low debts help.
- You want investment-property financing on a personal basis. Investment property is available only on this path, at up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out. A first-time investor typically needs a 700 score.
- You have documented income that falls short. Asset income can supplement it up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived.
The tradeoffs are different here. Haircuts are steeper on some accounts. Securities count at 80%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%. Cash and certificates of deposit count at 100%.
There are also minimums. And when depletion is your only income source, you need no less than $250,000 liquid. Statements must be at least 120 days old at application, plus the most recent one within 45 days. Funds from the sale of a business, an inheritance or a legal settlement are excused from that seasoning.
If a retiree lives on a portfolio and wants a rental, there is a third option worth comparing. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. A low-yield rental can fail that test even when the owner is wealthy. That case is where depletion often fits instead. The complete DSCR loans guide covers the investor-loan basics.
What Counts as an Asset, and What Does Not
The asset lists differ on each path, so check yours against the right one.
On the qualifier path, brokerage accounts, certificates of deposit, money market and savings all count at 100%. Retirement accounts count at 90% under 59½ and 100% at 59½ or older. Accounts combine.
On the depletion path, several categories do not count at all. Those are 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.
Other holdings are not published as eligible on either path. That includes cryptocurrency, precious metals, collectibles, pledged or borrowed funds, and business accounts beyond your ownership share. The documented route is to convert them into a seasoned cash balance in a regulated account, with the source reviewed by the lender. Do not plan on a percentage credit for them.
One mechanical point trips people up. Moving money mid-application can break seasoning. Large transfers need a paper trail, and a sale of property or a business adds explanation the lender will want to see.
The Agency Contrast
Agency programs run asset depletion differently, and the contrast is useful. One agency training deck describes a depletion approach that uses a 240-month divisor and an 80% loan-to-value cap, limited to one- to two-unit primary residences and second homes. It also requires penalty-free access to retirement funds. That is the agency’s rule, and it is dated material, so treat it as context only. It is not how files placed through Lendmire’s network are calculated.
The practical point is that divisors, haircuts and property types are not standardized across the market. A retiree comparing offers should ask which divisor, which haircuts and which property types each program uses.
The Texas Layer
A Texas homestead carries state protections that sit on top of any program leverage. The Texas Constitution’s homestead article protects the home from forced sale and contains the rules for home equity loans. Texas A&M’s Real Estate Research Center explains that such a loan may not be secured by any other property.
That matters if a retiree plans to pull cash from a homestead to fund a rental purchase. The depletion path allows cash-out at up to 60% on a primary residence, but Texas homestead rules apply on top, and the lender and title company handle them. A cash-out against a non-homestead rental sits under different rules.
The cleanest habit is to keep the homestead and any investment property separate in your planning. Finance the rental on its own merits instead of drawing on the home.
One more point on entity ownership. Asset-based consumer mortgages are built on an individual’s personal assets, so personal vesting is the typical structure. Whether any file can close in an LLC is set by the lender. Business-purpose rental financing is a different product, and the federal commentary on business-purpose credit treats rental acquisition above two units as business purpose, which is part of why DSCR sits in a separate lane.
Common Mistakes
- Assuming the two paths use the same percentages. They do not. A 401(k) counts at 90% or 100% on one path and 70% on the other.
- Forgetting the debt-to-income test on depletion. Large assets do not help if existing debts consume the derived income.
- Counting the same dollars twice. Assets used for the down payment and closing costs are not available as qualifying assets as well.
- Treating no income documentation as no documentation. Statements are required on both paths.
- Mixing a primary-residence figure into an investment-property plan. Investment property is depletion-only, at 65% and 60%.
- Expecting cash-out proceeds to help qualify. On the depletion path they never count.
Tax treatment varies; consult a qualified professional before moving retirement money or selling securities to qualify.
A Balanced Verdict
Neither path wins on its own. The qualifier path fits a retiree whose liquid assets reach the full loan, who carries debts, and who wants no income calculation. The depletion path fits a retiree with a larger portfolio relative to the loan, light debts, or an investment-property goal.
If your assets only just clear the loan, the qualifier path leaves almost no margin and the depletion path may fit better. If your debts are heavy, the qualifier path may be the only one that works. And if the property is a pure rental, a DSCR loan may be the cleaner comparison than either.
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. Programs change, qualification is subject to lender guidelines. This is not a commitment to lend.
Frequently Asked Questions
Do I have to sell my investments to use either path?
No. Neither path requires you to liquidate accounts. The qualifier path counts balances at their credit percentages. The depletion path converts balances into an imputed income figure. Funds used for the down payment and closing costs do come out of the pool, so those must be available in seasoned accounts.
Which path treats my 401(k) better?
It depends on your age. On the qualifier path, a 401(k) counts at 90% under 59½ and 100% at 59½ or older. A retiree over 59½ with mostly retirement money often does better on the qualifier path.
Can I buy a rental property with either path?
Only the depletion path covers investment property, at up to 65% on a purchase and 60% on a cash-out. The qualifier path covers principal residences and second homes. A first-time investor typically needs a 700 score on the depletion path.
Does Texas change the program figures?
No. The percentages and minimums are the same in every state where Lendmire’s consumer lending is licensed. Texas homestead rules apply on top, especially for cash-out against a primary residence.
What minimum assets does the depletion path need?
Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When depletion is your only income source, you need no less than $250,000 liquid. Those figures are subject to underwriting and the lender’s own review.
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. Freddie Mac — Asset depletion training deck
2. Texas A&M Real Estate Research Center — Home equity loans in Texas
3. CFPB — Regulation Z §1026.3 official interpretation
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 Texas
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.