The Quick Read: Fannie Mae’s version is a narrow tool for owner-occupants, while a non-QM asset depletion loan is a broader qualification method that can reach investment property. Fannie Mae limits the method to a principal residence or second home, and only on a purchase or limited cash-out refinance. A non-QM file converts usable assets into monthly income and runs that income through a debt-to-income test. Across the wholesale network, the right choice usually turns on three things.
- Occupancy: a rental purchase cannot use Fannie Mae’s method at all.
- Asset type: Fannie Mae counts employment-related retirement assets, while non-QM programs accept a wider list.
- Path: assets can cover the whole loan outright, or become income.
Ohio changes none of this. The program figures below are the same for an Ohio borrower, and every figure is subject to underwriting.
The honest answer on who each option is for: Fannie Mae’s route fits a borrower buying or refinancing a home to live in, holding 401(k) or IRA money, and wanting an agency loan. The non-QM route fits a borrower whose assets are in brokerage, cash, or mixed accounts, or who is buying a property that is not a primary home. Both routes verify the assets. Neither is a no-documentation loan.
Side-by-Side
The Fannie Mae column reflects the published selling guide. The non-QM column reflects select programs in Lendmire’s wholesale network. These are two different underwriting frameworks, so read each row on its own terms.
| Factor | Fannie Mae method | Non-QM (network) |
|---|---|---|
| Review basis | Employment-related assets as income | Assets cover loan, or become income |
| Occupancy | Primary or second home | Primary, second home; investment on depletion path |
| Loan purpose | Purchase, limited cash-out | Purchase, refinance, cash-out (path-specific) |
| Eligible assets | 401(k), IRA, SEP, Keogh, certain lump sums | Cash, CDs, securities, retirement, equity (by path) |
| Documentation | Plan statements, distribution letters | Statements on every qualifying account |
| Vesting | Individuals | Typically individuals on consumer loans |
| Reserves | Per agency process | None at or below 75% LTV (qualifier path) |
| Process | Agency underwriting | Individual file review |
Two Products Sharing One Name
Fannie Mae does not use the phrase asset depletion. Its policy is titled employment-related assets as qualifying income, and the Fannie Mae Selling Guide limits it to a purchase or limited cash-out refinance on a principal residence or second home. Maximum LTV is 70%. It rises to 80% when the asset owner is at least 62 at closing, a change Fannie Mae announced in an earlier selling guide update. Jointly owned assets require every owner to be a borrower. Exact terms depend on lender and investor guidelines, credit profile, reserves, and property review.
Non-QM asset depletion is different. It is a way of qualifying, not a separate product shelf. The lender treats a share of your liquid assets as monthly income on paper. Nothing is sold and nothing is withdrawn.
Network programs run two distinct paths, and a borrower is on one path at a time.
- Asset qualifier path: eligible assets, after credit percentages, must equal or exceed the entire loan amount. No employment or income is documented.
- Asset depletion path: usable assets are divided by 60 months to produce qualifying income. That income must carry the housing payment and other debts through the debt-to-income test.
Name the path every time you quote a number. Blending the two tables is the most common way these files get mis-sized.
How the Math Works
Both methods shrink the asset pool before they divide it. The headline balance misleads.
On Fannie Mae’s side, the guide subtracts any early-distribution penalty that would apply to a full withdrawal. Practitioner summaries also describe subtracting down payment, closing costs, and reserves, then dividing by the loan term in months. That is 360 on a 30-year loan. Confirm that step against the live guide before relying on it. Dividing by 360 instead of 60 changes the income sixfold from the same assets. That is arithmetic, not pricing.
On the network’s depletion path, haircuts apply first. Cash and CDs count at 100%, securities at 80%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%. Then the total is divided by 60 months.
Run it as an illustration. Say a borrower holds $1,500,000 in securities, which counts at 80% for $1,200,000, plus $300,000 in cash at 100%. That is $1,500,000 of usable assets. Divided by 60 months, it produces $25,000 of monthly qualifying income. That income then has to carry the housing payment and other debts through the debt-to-income test. The lender’s own calculation governs.
The qualifier path works differently. Take an $800,000 loan. A borrower holds $330,000 in brokerage accounts at 100%, $300,000 in a 401(k) at 90% because the owner is under 59½, giving $270,000, and $200,000 in savings at 100%. That counts $800,000 of usable assets, and the file is reviewed on assets alone. No income calculation happens.
Which Assets Count?
Asset type is where most Fannie Mae attempts stall. The agency definition is employment-related. Retirement plans such as a 401(k), IRA, SEP, or Keogh qualify, as do severance and lump-sum retirement distributions that are documented and deposited to a verified account. A plain taxable brokerage or checking balance generally does not qualify unless its source is one of those eligible distributions, according to a mortgage insurer’s training deck summarizing the guide. Practitioner summaries also list lottery winnings, inheritance, and real-estate sale proceeds as ineligible there. Verify that against the guide.
The network’s treatment is broader and path-specific.
- Qualifier path: brokerage, CDs, money market, and savings at 100%. Retirement accounts at 90% under age 59½ and 100% at 59½ or older. Accounts combine.
- Depletion path: the haircuts listed above. Not eligible: 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.
Crypto, precious metals, collectibles, and pledged or borrowed 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 source reviewed by the lender. Nothing counts at a percentage until that happens.
When Fannie Mae’s Method Is the Better Fit
Fannie Mae’s method fits a narrow borrower well. Consider a retiree in suburban Columbus, age 64, buying a primary home. Most of the wealth sits in an IRA and a 401(k). Documented income is thin. Fannie Mae allows the 80% LTV cap for a qualifying asset owner at 62 or older, and the loan stays inside the agency box. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
It also fits when the borrower wants agency underwriting and the home is a principal residence or second home. A lake-area second home in northern Ohio is one example. Where the assets are plan money, the guide’s own list matches the file.
Know the limits before you start. Without an eligible asset type, an eligible occupancy, and a qualifying LTV, the file does not fit. If a loan misses the parameters, the assets may still count under other income topics, such as interest and dividend income or retirement income. That is a different treatment from asset depletion.
When a Non-QM Asset Depletion Loan Is the Better Fit
Non-QM is the better fit when the file falls outside Fannie Mae’s box. Four profiles come up often.
1. The rental buyer. Fannie Mae’s method excludes investment property. On the network’s depletion path, investment property is available up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out, subject to underwriting. A first-time investor on that path needs a 700 score.
2. The brokerage-heavy borrower. Taxable securities are the whole story for a recent business seller or a household living off a portfolio. Securities count at 80% on the depletion path.
3. The borrower who wants assets only. On the qualifier path, assets equal to the entire loan can qualify the file with no employment or income documented. Leverage runs up to 80% on a purchase and 75% on a refinance, on a principal residence or second home.
4. The larger loan. The qualifier path runs to $4,000,000. The depletion path runs from $125,000 to $3,500,000.
Credit sits at a 600 floor on the qualifier path. The depletion path follows the lender’s matrix. Housing history is 0x30x12, and one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. On the depletion path, a housing event needs 4 years of seasoning.
Non-QM does not skip the legal test. The amounts a creditor relies on must still be verified, and the general standard sets no specific DTI threshold. That flexibility is why non-QM can use assets differently from the agencies. It is flexible, not absent.
Documentation and Seasoning
The assets are documented on both paths. Asset qualifier and asset depletion files are reviewed on the borrower’s verified assets, or income derived from those assets, rather than on property-level rental income, subject to lender guidelines, so the documentation requirements for those assets apply in full.
- Qualifier path: 60 days of seasoning and two months of statements for each qualifying account.
- Depletion path: statements at least 120 days old at application, plus the most recent statement within 45 days. Sale-of-business, inheritance, and legal-settlement funds are excused from that seasoning.
Depletion-path minimums are firm. Qualified assets must reach the lesser of $1,000,000 or 1.25 times the loan balance. The floor is never below $250,000 liquid when asset depletion is the only income source. Asset-derived income may also supplement documented income up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived.
Reserves are simple on the qualifier path. None are required at or below 75% LTV, and above that the lender sets them. The depletion path has no published reserve months. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
One more file rule: assets used to generate income cannot also fund the down payment or reserves. Money gets counted once.
Entity Vesting and Ownership
This is a consumer mortgage. Fannie Mae loans for owner-occupants and second-home buyers go to individuals, and the network’s asset-based files are underwritten the same way. A borrower who wants to hold a rental in an LLC is usually looking at a different product. Business-purpose rental financing is DSCR, where entity vesting is common, subject to program terms. Where an LLC does get involved on a business loan, owners typically give personal guarantees and are credit-checked. Treat that as general practice, not a rule for this product.
Where This Leaves the Investor
A rental purchase cannot use Fannie Mae’s asset method. The real comparison for an investor is three-way: non-QM asset-based qualification, DSCR, and agency rental-income review framework. An agency investment loan runs rental income from appraisal form 1007 on a one-unit property or form 1025 on a two-to-four unit, plus leases, as described in Fannie Mae’s published forms list.
DSCR relies on the property’s rent. Asset depletion relies on personal liquidity. Whichever is stronger in the file decides the path. Find more on that split in Lendmire’s piece Bank Statement vs 1099-Only vs Asset Depletion for Liquid-Asset Borrowers. The complete DSCR loans guide covers the rental-income side.
The practical tradeoff for non-QM is that leverage on investment property is lower than on a primary home, and the asset pool must be large. That is the cost of qualifying on liquidity. In many files the stronger play is to run both calculations before choosing. Tax treatment varies; consult a qualified professional.
Common Misconceptions
- Fannie Mae asset depletion works for rentals. It does not. The guide limits it to principal residences and second homes.
- Any brokerage account counts at Fannie Mae. The policy is employment-related, and non-employment balances are generally excluded.
- You have to sell the assets. You do not. They stay in the account on both paths.
- Asset depletion means no documentation. Statements are verified. Only personal income documentation is replaced.
- One divisor fits every program. It does not. Divisors are program-specific, so use the specific lender’s guide.
- Non-QM means no repayment test. The lender still reviews ability to repay. The file rests on assets instead of paystubs.
Key Terms Defined
Asset qualifier: a path where eligible assets, after credit percentages, equal or exceed the whole loan, with no income documented.
Asset depletion: a path that divides usable assets by 60 months to create monthly qualifying income.
Haircut: the share of an account’s balance a program refuses to count, such as 20% off securities.
Seasoning: the length of time funds must sit in an account before they count.
Non-QM: a mortgage that falls outside the agency box and is underwritten to the lender’s own guidelines.
A Balanced Verdict
Pick Fannie Mae’s method if you are buying or refinancing a home to live in, your wealth sits in retirement plans, and you want agency underwriting. Pick non-QM if the property is a rental, your assets are brokerage or cash, or your file needs more room on leverage, loan size, or asset type. Neither is better in the abstract. The occupancy and asset type usually decide it before anything else does.
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 is a broker, and programs are placed through select lenders in its network, subject to underwriting. Consumer mortgage lending is licensed in 16 states, Ohio among them. Nothing here is a commitment to lend.
Frequently Asked Questions
Can I use asset depletion to buy a rental in Ohio?
Not through Fannie Mae. Its method excludes investment property. On the network’s depletion path, investment property is available up to 65% on a purchase, subject to underwriting. Business-purpose rental financing is usually DSCR.
Do I have to liquidate my accounts?
No. The calculation happens on paper, and the assets remain invested. The lender still verifies them with statements.
Does my 401(k) count?
On Fannie Mae’s route, employment-related retirement accounts are the core asset type. On the network’s depletion path, retirement accounts count at 70% at any age. On the qualifier path, they count at 90% under 59½ and 100% after.
What is the minimum asset level?
On the depletion path, the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 liquid when assets are the only income. Supplementing documented income waives that minimum, up to a 45% debt-to-income ratio.
Can crypto be used?
Not directly. It is not published as eligible on either path. The documented route is converting it to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Lendmire’s asset-based mortgage in Ohio page presents the program for Ohio 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. Fannie Mae Selling Guide: Employment Related Assets as Qualifying Income
2. Fannie Mae announcement raising LTV for asset owners 62 and older
3. Enact MI training deck on assets and repayment obligations
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 · How to Qualify for an Asset Depletion Jumbo Loan · Can You Do a Cash-Out Refinance on an Asset Depletion Loan?
Guides: Asset-Based Mortgage in Ohio
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.