The Quick Read: Only when your documented income is small next to your liquid wealth and the home is a primary residence or second home, because assets can then cover the loan outright or be converted into qualifying income, while a conventional file counts only the paper income you can show each month. Lendmire arranges these loans as a broker through select lenders in its wholesale network. Every file is underwritten individually, and nothing here is a commitment to lend.
- If your eligible assets equal or exceed the whole loan, the asset qualifier path can qualify you on assets alone, with up to 80% loan-to-value on a purchase of a principal residence or second home.
- If your assets are large but short of the loan, the asset depletion path divides usable assets by 60 months to create income.
- If Social Security, a pension, and distributions already clear the debt-to-income test, conventional usually fits better.
- If the property is a pure rental, a different product often fits better: a DSCR loan.
What Does Asset Depletion Actually Do for a Retiree?
A retiree can hold a large portfolio and still look poor on paper. Conventional underwriting reads monthly income. Statements showing a seven-figure brokerage balance and a modest pension can produce a decline, while a salaried borrower with little savings gets approved.
Asset-based programs fix that mismatch. They document your assets instead of your income, and they come in two forms. Lendmire’s network places both for consumer purposes on primary residences and second homes. Investment property is available only on the depletion path.
The asset qualifier path tests whether your eligible assets, after the credit percentages below, equal or exceed the entire loan. If they do, you qualify on assets alone. The file does not document employment or income.
The asset depletion path turns usable assets into imaginary monthly income. It divides them by 60 months and runs the result through a debt-to-income test. Nothing is sold, and nothing is pledged. The collateral is still the house.
You qualify on one path at a time. The figures from the two never blend.
How Do the Two Paths Compare With a Conventional Loan?
The paths differ more from each other than most borrowers expect. The table shows the structure for a principal residence or second home. All figures are typical ranges from select programs, subject to underwriting.
| Factor | Asset qualifier | Asset depletion | Conventional |
|---|---|---|---|
| Reviewed on | Assets cover the loan | Assets ÷ 60 months as income | Documented income |
| Income documented | None | Derived income, DTI test | All income |
| Purchase leverage | Up to 80% | Up to 80% | Varies by program |
| Retirement balances | 90% under 59½, 100% after | 70% at any age | Counted as paid income |
| Loan size | Up to $4,000,000 | $125,000 to $3,500,000 | Varies by program |
The retirement row is the one that surprises people. A retiree past 59½ gets full credit for 401(k) and IRA balances on the qualifier path. The same balances count at 70% on the depletion path. That gap often decides which path the file takes.
Which Assets Count, and How Much?
Assets count at set percentages, and the percentages differ by path. On the qualifier path, brokerage accounts, certificates of deposit, money market, and savings count at 100%. Retirement accounts count at 90% under 59½ and 100% at 59½ or older. Accounts combine.
On the depletion path, cash accounts and CDs count at 100%. Securities count at 80%, private stock at 75%, retirement accounts at 70%, and real-estate equity at 60%. Custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options, and unvested restricted stock are not eligible.
Cryptocurrency, precious metals, and collectibles are not published as eligible on either path. The documented route is converting them to a seasoned cash balance in a regulated account. The lender then reviews the source of the funds.
Borrowed or pledged funds do not count either, and neither does the home you are buying.
What Does the Math Look Like?
Run the numbers on two illustrative files. The lender’s own calculation governs in every case.
Qualifier path. Picture an $800,000 loan. You hold $330,000 in brokerage accounts, which count at 100%. You hold $300,000 in a 401(k) while under 59½, which counts at 90% ($270,000). You hold $200,000 in savings at 100%. Usable assets total $800,000, so the file is reviewed on assets alone, subject to underwriting. At 59½ or older, the 401(k) would count in full.
Depletion path. Now take $1,500,000 in securities, which count at 80% ($1,200,000), plus $300,000 in cash at 100%. Usable assets are $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income. That income then has to carry the housing payment and your other debts through the debt-to-income test.
The depletion path also has minimums. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. They can never fall below $250,000 liquid when asset depletion is your only income source. If you also have documented income, derived income can supplement it up to a 45% debt-to-income ratio, and the minimum-assets rule is waived.
When Does Asset Depletion Win?
Asset depletion wins when your balance sheet is strong and your paycheck is not. These triggers come up most often across the wholesale network Lendmire works with:
- Your documented income fails the debt-to-income test. Pension and Social Security are small next to the payment, but the portfolio is large.
- Your assets cover the whole loan. The qualifier path then skips income entirely and needs no reserves at or below 75% loan-to-value.
- Your income is lumpy or recent. Sale-of-business, inheritance, and legal-settlement funds are excused from the depletion path’s statement-age rule.
- You want to keep your portfolio invested. Nothing is liquidated, so your holdings keep growing while they carry the loan.
Seasoning matters here. The qualifier path wants 60 days of seasoning and two months of statements per qualifying account. The depletion path wants statements at least 120 days old at application, plus a recent statement within 45 days. Retirees with freshly moved money should plan for that.
When Does Conventional Win?
Conventional wins more often than asset-based marketing admits. If your Social Security, pension, and required retirement distributions comfortably clear the debt-to-income test, an income-based loan is the simpler file. Asset-based programs are non-QM, meaning they sit outside standard agency guidelines, so they typically cost more. Ask for full terms side by side before choosing.
Conventional also wins when your portfolio is thinner than it looks. After credit percentages, a retiree with $600,000 in mostly retirement accounts may not meet the depletion path’s asset minimums. Credit matters too. The qualifier path publishes a 600 floor, and the depletion path follows the lender’s matrix. A first-time investor on the depletion path needs 700.
One more case: a borrower who wants to keep assets invested but could qualify on income may simply not need either path.
How Does Asset Depletion Compare With Selling Assets for a Bigger Down Payment?
It trades a financing cost for investment growth and flexibility. Selling holdings to cut the loan size removes growth from your portfolio. It also concentrates your wealth in one house. Selling investments to fund a larger down payment can also change your tax picture, so tax treatment varies and a qualified professional should weigh in.
Borrowing against the qualifying portfolio keeps it working. But it also keeps you carrying a payment. If a market drop shrinks the portfolio after closing, the loan does not shrink with it. Some retirees prefer a large down payment for exactly that reason, and that is a legitimate choice.
Leverage limits matter too. On the depletion path, a principal residence or second home gets 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. On the qualifier path, a refinance goes up to 75%, and cash-out terms are set by the lender and not published.
What Does a Washington Borrower Need to Know?
A Washington retiree sees the same percentages, seasoning, and minimums described here. Lendmire’s consumer mortgage lending is licensed in 16 states, Washington among them. Local factors like property taxes, insurance, and home prices affect your budget, but they are context. They never alter how the program qualifies you.
Washington retirees often hold a second home, a waterfront place, or a condo. Each can work on either path, depending on lender guidelines and property review.
Which Path Fits Which Retiree?
Scenarios help here. Every profile below is hypothetical, and the outcome depends on credit, property, and underwriting.
| Retiree profile | Likely better path |
|---|---|
| Large cash and brokerage balances, small pension | Asset qualifier, if assets cover the loan |
| Mixed portfolio, loan larger than usable assets | Asset depletion, subject to minimums |
| Strong pension, Social Security, and distributions | Conventional |
| Buying a rental, not a home to live in | DSCR |
Why a Pure Rental Usually Moves to DSCR
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. DSCR qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Your age and your retirement balances do not drive an income calculation.
If the rent covers the payment, DSCR is usually cleaner, especially with LLC ownership, subject to lender program eligibility. If the rent falls short, you can accept lower leverage, bring more cash, or look at select sub-1.00 programs, which adjust leverage and terms. Lendmire’s complete DSCR loans guide walks through that side in full.
A property you will use personally, even part of the year, generally cannot use business-purpose financing. That is when asset depletion belongs back in the picture. Asset depletion on an investment property is allowed on the depletion path only, and it typically comes with lower leverage than other programs.
Is This Allowed, and Is It a No-Doc Loan?
It is allowed, and it is not a no-doc loan. Federal ability-to-repay rules let a lender base its decision on income, on assets other than the home securing the loan, or both. The CFPB’s Regulation Z rule lists savings, vested retirement funds, stocks, bonds, and CDs as assets a creditor may consider. The same rule excludes the dwelling securing the loan.
The lender must also verify what it relies on. Regulation Z’s text calls for third-party records, which is why statements for every counted account are required. The rule sets no divisor and no haircut. Those come from each program’s written policy.
Key Terms Defined
Haircut: the share of an asset’s balance that a program leaves out, such as the 20% of a securities balance that goes uncounted when securities get 80% credit.
Seasoning: how long funds must sit in an account before they count.
Debt-to-income ratio (DTI): your monthly debts divided by your monthly income.
Non-QM: a mortgage that falls outside standard agency guidelines, so the lender sets its own rules.
DSCR: debt service coverage ratio, meaning a rental’s income measured against its debt payment.
Usable assets: your balances after each account’s credit percentage is applied.
What to Gather Before You Apply
Pull statements for every account you want counted. Check each statement’s age against the path you expect to use. Note the owner of each account, because business accounts count only to your ownership share. Decide whether the property is a primary residence, second home, or rental. That one answer sets which programs are open to you.
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. Reach the team at 828-256-2183 or request a quote.
Frequently Asked Questions
Do retirement accounts count toward asset depletion?
Yes, at a discount that depends on the path. On the qualifier path, 401(k) and IRA balances count at 90% under 59½ and 100% at 59½ or older. On the depletion path, they count at 70% at any age. Retirees past 59½ often do better on the qualifier path when their assets cover the loan.
Is asset depletion the same as a no-doc loan?
No. It is a fully verified loan that documents assets instead of income. You still provide statements for every counted account, and the lender reviews the source of funds. Qualification stays subject to credit, property review, and underwriting.
Can I use asset depletion on a rental property?
Only on the depletion path, at up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. Cash-out proceeds never count as assets. For most pure rentals, DSCR is the more natural fit because it qualifies primarily on the property’s rent.
Does the program differ for Washington borrowers?
The program figures do not change by state. Lendmire’s consumer mortgage lending is licensed in Washington. Local taxes, insurance, and prices shape your budget but not the program’s percentages.
What if my assets are not enough?
A lower loan amount can bring a file within range. Documented income, such as a pension, can supplement derived income up to a 45% debt-to-income ratio on the depletion path. And if the rent covers the payment on a rental, DSCR may fit instead.
For current guidelines and terms, see Lendmire’s asset-based mortgage programs page.
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. CFPB, Regulation Z §1026.43 (ability to repay)
2. Cornell Legal Information Institute, 12 CFR 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 to Document a Washington Asset Qualifier Mortgage Without an Employer · How to Refinance a Washington Mortgage After Retiring With No W-2 Income · How to Buy Before You Sell in Alabama Using an Asset Qualifier Mortgage
Guides: Asset-Based Mortgage in Washington
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.