The Quick Read: Usually only when your documented income is thin and your portfolio is large, because a conventional loan tests paychecks and pensions while asset depletion tests what you own. If Social Security, a pension and required withdrawals already clear the debt-to-income test on a primary residence, conventional financing is often the simpler path. If they don’t, assets can become the qualifying income, subject to underwriting.
- Conventional loans qualify you on documented income; asset-based loans qualify you on statements.
- The asset qualifier path covers the whole loan with assets and documents no income.
- The asset depletion path divides usable assets by 60 months to create monthly income.
- A true rental usually belongs in a DSCR loan, which tests the property instead of you.
- New Mexico’s community-property rules can change whose assets count.
Two Paths, and You Get One at a Time
Asset-based mortgages come in two forms, and mixing them up is a common mistake. Across the wholesale network Lendmire works with, every file is reviewed on one path or the other, never both. All figures below are ceilings and floors through select programs, subject to underwriting. They are not offers.
The asset qualifier path looks at assets alone. After the credit percentages, your eligible assets must equal or exceed the entire loan amount. No employment or income gets documented. Leverage runs up to 80% on a purchase and 75% on a refinance of a principal residence or second home. Loans reach $4,000,000.
The asset depletion path turns assets into monthly income. The lender takes your usable assets after haircuts, divides by 60 months, and runs that number through the debt-to-income test, which is the share of monthly income that goes to debt payments. Loans run from $125,000 to $3,500,000.
Here is the picture. 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 usable, divided by 60 months, for $25,000 of monthly qualifying income. That income then has to carry the housing payment and your other debts. The lender’s own calculation governs, and this is illustration only.
So When Does Asset Depletion Actually Win?
It wins in three situations: income is low on paper, income is lumpy, or the assets are big enough to cover the loan outright. A conventional mortgage is a good product when documented income clears the debt-to-income test. Retirement tends to break exactly that test.
Large portfolio, small paycheck. A retiree living off a portfolio may show modest Social Security and little else. The income is real, but the tax return doesn’t show it as steady earnings. Asset depletion turns the balance sheet into the income the file lacks.
Lumpy income. A retiree who sold a business, received an inheritance, or collects a settlement has big balances and irregular deposits. On the depletion path, funds from a business sale, inheritance or legal settlement are excused from the statement-age requirement, subject to underwriting.
Assets that cover the whole loan. On the qualifier path, no income is documented at all. If your brokerage, savings, money market and retirement balances together equal the loan, the file can stand on assets alone.
Here is the other side. If your pension and Social Security comfortably clear the debt-to-income test, conventional financing is often the more straightforward route. You skip the minimum-asset thresholds and the haircuts. Asset depletion is a tool for borrowers conventional underwriting misreads, not a trophy product.
What Counts, and How Much of It
The percentages differ by path, so name the path each time you read a number.
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Brokerage and securities | 100% | 80% |
| Cash, savings, money market | 100% | 100% (cash) |
| Certificates of deposit | 100% | 100% |
| Privately held stock | Not eligible | Not eligible |
| Retirement accounts | 90% under 59½, 100% at 59½+ | 70% at any age |
| Real-estate equity | Not published | 60% |
On the qualifier path, retirement balances count more once you reach 59½. On the depletion path they count at 70% regardless of age. That is a real difference for a retiree in their sixties, and it can push you toward one path or the other.
Not every asset is welcome. Privately held company stock is not eligible on either path. If you own part of a closely held business, the documented route is a sale or buyout converted into a seasoned cash balance. The depletion path also excludes custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options and non-vested restricted stock units. Cryptocurrency, precious metals, collectibles and borrowed or pledged funds 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 lender reviewing the source.
Retirement-age rules also touch your cash flow. The IRS says required minimum distributions generally start at age 73. If your plan is to draw down an IRA anyway, count that against the assets you are asking a lender to credit.
Documentation: “No Income Documented” Is Not “No Documentation”
You still prove the assets. Always. The file carries no traditional personal-income documentation, pay stubs or employment verification, but every balance is backed by statements.
On the qualifier path, the lender wants 60 days of seasoning and two months of statements for each qualifying account. On the depletion path, statements must be at least 120 days old at application, plus the most recent statement within 45 days. Large recent deposits will draw questions.
Credit still matters. The qualifier path has a 600 minimum score. The depletion path follows the lender’s matrix, and a first-time investor on that path needs 700. Housing history is typically clean: one 30-day late in the last twelve months gets looked at case by case. Multiple bankruptcies are not eligible. Approval is never promised.
The depletion path also has asset minimums. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When asset depletion is your only income, you need at least $250,000 liquid. When asset-derived income only supplements documented income, it can do so up to a 45% debt-to-income ratio, and the minimum-assets rule is waived.
Leverage: Where Conventional Often Wins on Terms
On primary residences, the asset depletion path allows up to 80% on a purchase or rate-and-term refinance and up to 60% on a cash-out refinance. Cash-out proceeds never count as qualifying assets. Second homes follow the same leverage.
Investment property is tighter. On the depletion path it caps at 65% on a purchase or rate-and-term refinance and 60% on a cash-out. If you want more leverage on a pure rental, that’s the signal to look at a different product.
A conventional loan on the same primary residence may offer a different leverage and a different cost profile, because each program prices and sets limits its own way. That is why comparing quotes matters. Asset depletion is a qualification solution. It is not automatically the cheaper loan, and you should ask your broker to put both structures side by side.
Why Retirees Often Get Turned Down Without a Paycheck
Federal law doesn’t require a paycheck. A creditor must consider your “current or reasonably expected income or assets,” other than the home securing the loan, and verify what it relies on using third-party records, under the ability-to-repay rule at 12 CFR 1026.43.
So asset-based lending is built on the rule, not around it. Conventional underwriting simply leans on documented income. A non-QM asset program uses the same legal frame with a different method.
Agency financing is stricter on this topic. Fannie Mae’s Selling Guide says that when income depends on depleting an asset, the lender must document that it will continue for at least three years. Programs placed through Lendmire’s network are not governed by that guidance, but it explains why a conventional file can feel harder for an asset-heavy retiree.
The Rental Question: Asset Depletion or DSCR?
If you are buying a true rental, asset depletion is usually the wrong tool. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. It doesn’t run your personal debt-to-income at all. DSCR loans are designed for non-owner-occupied investment properties, and because they are business-purpose loans, they are reviewed differently from a standard owner-occupied mortgage.
The decision rule is short:
| Situation | Usually fits |
|---|---|
| True rental, rent covers the payment | DSCR |
| Rent runs thin on a high-priced home, large portfolio | Asset depletion (on the property terms above) |
| Personal use, second home or primary residence | Asset depletion or conventional |
| Strong documented income, primary residence | Compare conventional first |
Occupancy decides the product. A house you keep mainly for your own use, say a month or more each summer with only occasional rentals, is treated as a second home, not a business-purpose rental. A property rented most of the year is generally an investment property. Calling a personal-use home a rental on paper doesn’t change how a lender reads it.
Some retirees use both tracks, one for the home and one for rentals. The same asset pool is counted each time, so assets used to qualify one loan reduce what is left for the next. Sequence them deliberately.
Keep one thing in mind about the math: a seven-figure portfolio, once haircut and divided across 60 months, produces a monthly figure that can look small next to the total balance. Run the depletion math before you fall in love with a house, so the number the lender uses is not a surprise.
The New Mexico Wrinkle: Community Property
New Mexico is a community-property state, and that can change which assets belong in the pool. Property acquired during marriage is presumed to be community property, though the presumption can be rebutted. Mixing separate funds, such as an inheritance, with joint funds can change their character.
Spouses generally must also join in a mortgage of community real property under New Mexico’s joinder statute. Purchase-money mortgages are an exception. A married retiree should ask early whether a spouse must be on the loan or on the asset accounts. Requirements vary by program, and an attorney can address how your own assets are characterized.
Program figures do not change by state. Lendmire’s consumer mortgage lending footprint includes New Mexico, and every file is placed through select lenders and underwritten individually.
Key Terms Defined
Asset qualifier path: a program where eligible assets must equal or exceed the whole loan and no income is documented.
Asset depletion path: a program that divides usable assets by 60 months into monthly income for the debt-to-income test.
Haircut: the share of an asset’s value a lender discounts because it can lose value or is harder to reach.
Seasoning: how long funds have sat in your account before the lender counts them.
Debt-to-income (DTI): monthly debt payments divided by monthly income.
DSCR: debt service coverage ratio, which compares a rental’s income to its payment.
Frequently Asked Questions
Do I have to sell my investments to use asset depletion?
No. The assets demonstrate capacity, and you keep owning them. Keeping them invested avoids selling at a gain and preserves long-term growth, though it also means market swings can change what counts between statements.
Can I combine asset income with Social Security and a pension?
Yes, on the depletion path. Asset-derived income may supplement documented income up to a 45% debt-to-income ratio, and the minimum-assets rule is waived when it does, subject to underwriting.
Does my IRA count?
It does, at a percentage. On the qualifier path, 401(k) and IRA balances count at 90% under age 59½ and 100% after. On the depletion path they count at 70% at any age.
Is a smaller portfolio enough?
Possibly, but the floors are real. The depletion path needs at least the lesser of $1,000,000 or 1.25 times the loan, and never less than $250,000 liquid when assets are your only income source. Below that, other structures may fit better.
Can I use asset depletion for a rental?
The depletion path allows investment property at lower leverage, but a true rental usually fits DSCR better because it tests the property, not you.
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 asset-based mortgage in New Mexico page presents the program for New Mexico borrowers.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. IRS RMD FAQs
3. Fannie Mae Selling Guide B3-3.1-01
4. New Mexico Statutes §40-3-12
5. New Mexico Statutes §40-3-13
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can a New Mexico Buyer Qualify for a Mortgage on IRA Assets Without Withdrawals? · Can an Ohio Retiree Get a Mortgage on Savings and Investments Alone? · Does a Pennsylvania Asset-Based Mortgage Require Tax Returns?
Guides: Asset-Based Mortgage in New Mexico
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.