The Quick Read: Fannie Mae’s method turns retirement balances and certain lump-sum packages into qualifying income for a principal residence or second home. A non-QM asset depletion loan accepts a wider set of liquid assets. On its depletion path it can also finance an investment property, with leverage and terms set by each program and underwritten individually. Non-QM simply means a loan that falls outside the agency (Fannie Mae and Freddie Mac) rulebook.
- Fannie Mae’s method is narrow: employment-related assets, owner-occupied or second-home use, and a 70% loan-to-value ceiling (80% in one age-based case).
- Non-QM covers more ground: cash, securities, retirement accounts, and real-estate equity, each counted at a set percentage.
- Rental purchases are the dividing line. The agency route is closed to investment property.
- Each non-QM program writes its own rules, so figures differ from lender to lender.
The Honest Answer: Who Each Option Is Really For
Fannie Mae’s route fits a borrower whose wealth sits in 401(k)s, IRAs, or a documented severance or retirement payout, and who is buying a home to live in. A non-QM asset depletion loan fits a borrower whose wealth sits in brokerage accounts, savings, or sale proceeds, or who wants to buy a rental.
Many Georgia borrowers land on the non-QM side for one plain reason. Their money is in the wrong place for the agency formula.
Neither option is better in the abstract. One has a published rulebook and a narrow lane. The other has a wide lane and no single rulebook.
Side-by-Side
The Fannie Mae column reflects published agency norms. The non-QM column reflects asset depletion guidelines from select programs in Lendmire’s wholesale network, subject to underwriting. Pricing is deliberately left out of both columns.
| Factor | Fannie Mae method | Non-QM asset depletion |
|---|---|---|
| Qualifying basis | Eligible assets become income, then DTI | Usable assets ÷ 60 months, then DTI |
| Eligible assets | Employment-related assets | Cash, CDs, securities, retirement, equity |
| Occupancy | Principal residence, second home | Plus investment property |
| LTV ceiling (purchase) | 70%, or 80% at age 62+ | 80% home; 65% investment |
| Cash-out | Limited cash-out refinance only | 60% on home or investment |
| Documentation | Guide-defined distribution records | Statements, set age and seasoning |
| Entity vesting | Individual borrower; assets individually owned | Varies by program; confirm per file |
| Underwriting | Automated or manual | Typically manual review |
| Reserves | Per standard underwriting findings | No published reserve months |
Every row has fine print. The sections below cover it.
Key Terms Defined
Employment-related assets: Money that came from work, such as 401(k), IRA, SEP and Keogh balances, or a severance or lump-sum retirement package.
Divisor: The number of months you divide your usable assets by to produce a monthly income figure.
Haircut: The share of an account’s balance a lender refuses to count, because the asset can lose value or is hard to access.
Seasoning: How long money must sit in your account, shown by statements, before it counts.
Debt-to-income (DTI): Your monthly debts, including the new housing payment, compared with your monthly income.
How Fannie Mae’s Method Works
The Fannie Mae Selling Guide calls this “employment related assets as qualifying income.” The agencies do not use the phrase “asset depletion” themselves, so search the Guide’s own term to verify anything here.
The Guide sets the box:
- Loan purpose: purchase and limited cash-out refinance.
- Occupancy: principal residence and second home. Investment property is not eligible.
- Leverage: LTV, CLTV and HCLTV are capped at 70%. They rise to 80% if the owner of the qualifying assets is at least 62 at closing.
- Ownership: jointly owned assets only work if every owner is a borrower on the loan.
- Penalties: if cashing out an account would trigger a penalty, that penalty is subtracted.
Published practitioner summaries describe the math as net documented assets divided by the loan’s term in months. Confirm the divisor on the Guide page itself. The result then runs through standard credit and DTI rules.
Documentation follows the asset type. A mortgage insurer’s training materials describe a distribution letter, a 1099-R and a deposit to a verified account as the paper trail for lump-sum retirement packages.
Here is the catch. Ordinary checking and savings balances are generally excluded unless the money traces back to an eligible employment-related payout. A retiree with a large brokerage account and little in retirement accounts often finds the agency formula has nothing to work with.
How a Non-QM Asset Depletion Loan Works
Across Lendmire’s wholesale network, asset-based consumer mortgages run on two separate paths. A borrower is on one path at a time. The figures below are ceilings and floors, never offers, and they apply through select programs, subject to underwriting.
Asset qualifier path. Eligible assets must equal or exceed the entire loan amount. No employment or income is documented. Brokerage, CD, money market and savings balances count at 100%. A 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. Say you want an $800,000 loan. Brokerage accounts of $330,000 count in full. A 401(k) of $300,000 held under 59½ counts $270,000. Savings of $200,000 count in full. That is $800,000 of usable assets, and the file is reviewed on assets alone. This is an illustration, and the lender’s calculation governs.
Leverage on this path reaches 80% on a purchase and 75% on a refinance, for a principal residence or second home. Loans run up to $4,000,000. Credit starts at a 600 minimum score. Reserves are not required at or below 75% loan-to-value.
Asset depletion path. Assets become monthly income that carries the housing payment through the DTI test. Cash and CDs count at 100%. Securities count at 80%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%. The divisor is 60 months.
Run it this way. Securities of $1,500,000 count 80%, or $1,200,000. Add $300,000 in cash at 100%. That is $1,500,000 usable, and divided by 60 months it produces $25,000 of monthly qualifying income. That income then carries the housing payment and other debts through the DTI test. Again, illustrative only.
Leverage on this path:
| Property | Purchase or no-cash-out refinance | Cash-out refinance |
|---|---|---|
| Principal residence or second home | 80% | 60% |
| Investment property | 65% | 60% |
Loans run from $125,000 to $3,500,000. The lender’s score-and-loan-amount matrix sets the credit floor. A first-time investor needs a 700 score. Qualified assets must reach the lesser of $1,000,000 or 1.25 times the loan balance, and never less than $250,000 liquid when assets are the only income source. Asset-derived income can also supplement documented income up to a 45% DTI, and the minimum-assets rule is waived in that case. Cash-out proceeds never count as qualifying assets.
Both paths document the assets. Only the income is left undocumented on the qualifier path. Qualifier-path statements cover two months per account after 60 days of seasoning. Depletion-path statements must be at least 120 days old at application, plus a recent statement within 45 days. Sale-of-business, inheritance and legal-settlement funds are excused from that seasoning.
What Counts, and What Doesn’t
Crypto, 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.
The depletion path also excludes 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. Fannie Mae’s list is narrower still, since it is built around employment-related assets.
Consumer-purpose versions of both products still require a documented repayment review. That is a rule of Regulation Z, which excludes primarily business-purpose credit. That exclusion is why rental financing often takes a different route, covered below.
When Fannie Mae’s Method Is the Better Fit
Choose it when the occupancy and asset type line up. The agency route tends to work well in these situations:
- You are buying a home to live in, or a second home. Occupancy is the first gate. Everything else is secondary.
- Your wealth is in retirement accounts. A 401(k) or IRA is the exact asset the Guide was written around. A documented severance or lump-sum retirement package fits too.
- You are 62 or older and want higher leverage. The 80% tier needs the borrower using the income to be at least 62 at closing.
- You value a published rulebook. Fannie Mae’s rules sit in a public guide. You can read the standard yourself and check any lender’s answer against it.
- Your balances are modest. Non-QM depletion carries minimum asset thresholds that smaller portfolios may not reach.
Picture a retired Georgia couple moving closer to family. Nearly all their savings sit in IRAs. They are buying a primary residence and want a modest loan. The agency formula fits their asset mix. Not bad.
There is a cost to the narrow lane. Joint owners must all be on the loan. Penalties get subtracted. Anything outside the eligible asset list does not count.
When a Non-QM Asset Depletion Loan Is the Better Fit
Choose non-QM when the agency formula has nothing to count, or when the property is a rental. Many of these borrowers land here:
- Your money is in brokerage or savings accounts. Cash and CDs count at 100% on both paths. Securities count at 80% on the depletion path.
- You sold a business or received an inheritance or settlement. Those funds are excused from the depletion-path seasoning period. Georgia borrowers who just exited a company often have large balances and no current paycheck.
- You want an investment property. The depletion path accepts it, at 65% LTV on a purchase and 60% on a cash-out. The agency method does not.
- You want the loan covered by assets outright. The qualifier path needs no income documented at all, provided usable assets cover the whole loan.
- You need a larger loan. The qualifier path runs to $4,000,000 and the depletion path to $3,500,000.
Say you are an early-retired professional with securities and cash and no wages. The depletion path converts those holdings into income at the 60-month divisor, and DTI does the rest.
The tradeoff is variability. Each lender’s program guide controls haircuts, divisors and seasoning, and no universal formula exists. Underwriting is typically manual, and terms are tighter on investment property. Documented assets are still required.
Lendmire’s consumer mortgage business is licensed in 16 states, Georgia among them, and it works as a broker. It places these files with select lenders in its network. The program figures above do not change by state.
When Neither Fits: Rentals Qualified on Rent
Some rental buyers have the assets but don’t want to tie them up. Asset-based programs can require those assets to stay committed until a refinance or sale, and that is a fair thing to ask about before you commit.
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. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Personal assets are not converted into income.
For a pure rental buy, a DSCR loan is often the cleaner tool. The complete DSCR loans guide covers how coverage ratios work. If your income is irregular rather than absent, Lendmire’s piece Bank Statement vs 1099-Only vs Asset Depletion for Liquid-Asset Borrowers is worth reading too.
A Quick Diagnostic
Match your situation to a path:
| Your situation | Likely path |
|---|---|
| Wealth mostly in 401(k) or IRA, buying a home | Fannie Mae method |
| Wealth mostly in brokerage or savings | Non-QM |
| Recent business sale or settlement | Non-QM |
| Buying a rental | Non-QM depletion or DSCR |
| Assets cover the whole loan | Non-QM qualifier path |
| Wealth in crypto or collectibles | Convert to cash first |
The Verdict
Fannie Mae’s method is the better tool for a narrow, well-defined borrower: owner-occupied, retirement-account-heavy, and comfortable with a 70% ceiling. Non-QM is the better tool for everyone outside that lane, at the cost of program-by-program variation and manual underwriting. Rentals sit outside the agency lane entirely.
The deciding questions are where your money sits and what you are buying. Answer those two and the choice usually makes itself.
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 I use a brokerage account for Fannie Mae’s method?
Generally no. The Guide is built around employment-related assets such as retirement accounts and certain lump-sum packages. A brokerage balance counts on the non-QM depletion path at 80% for securities, and on the qualifier path at 100%, subject to underwriting.
Can I buy an investment property with asset depletion?
Not through Fannie Mae’s method, which is limited to principal residences and second homes. Through select non-QM programs, the depletion path accepts investment property at up to 65% LTV on a purchase and 60% on a cash-out refinance. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Can I combine asset-derived income with my other income?
Yes, on the depletion path. Asset-derived income can supplement documented income up to a 45% DTI. When it supplements, the minimum-assets rule is waived. The lender’s own calculation governs.
Does non-QM mean the lender skips the review?
No. The lender still reviews your credit, your assets, and the property. Your statements are documented on both paths. Only the income is left undocumented on the qualifier path, and the repayment review rests on the assets.
Do the rules change for Georgia?
The program figures do not change by state. Fannie Mae’s rules are national, and the network’s asset-based figures hold in Georgia as elsewhere. Local factors such as property type and county costs matter to your budget, not to the program parameters.
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 tax returns understate their income, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Selling Guide: Employment Related Assets as Qualifying Income
2. Enact MI training presentation on assets and repayment obligations
3. CFPB Regulation Z § 1026.43
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 Do You Need in Assets for an Asset Depletion Loan? · Brokerage Dividends vs Asset Depletion for a Retiree on a Jumbo Loan · How to Qualify for an Asset Depletion Jumbo Loan
Guides: Asset-Based Mortgage in Georgia
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.