The Quick Read: Usually yes, but only when the program allows the stacking and the same assets are not counted twice. Across the wholesale network, a pension can sit on top of asset-derived income on the asset depletion path, while a rental-property DSCR loan ignores both and looks only at the property’s rent.
- On the asset depletion path, usable assets divided by 60 months become qualifying income, and documented pension income can be added to it, subject to underwriting.
- When asset-derived income supplements documented income, the program allows up to a 45% debt-to-income ratio, and the minimum-assets rule is waived.
- The asset qualifier path documents no income at all, so a pension adds nothing there.
- A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. A pension does not enter that math.
- Assets that produce the pension income cannot also be run through the depletion formula.
Key Terms Defined
Asset depletion. A method that turns eligible savings and investments into a monthly qualifying income on paper, without selling anything.
Divisor. The number of months the usable assets are spread across. On this program’s depletion path it is 60.
Haircut. The share of an account’s value the lender does not count, such as the 20% cut on securities.
Debt-to-income ratio (DTI). Total monthly debts divided by total monthly qualifying income.
Asset qualifier path. A separate route where eligible assets, after credit percentages, must cover the entire loan amount and no income is documented.
Stacking. Adding documented income, such as a pension, to asset-derived income to reach one qualifying total.
Which Path Fits a Pension Holder?
Two paths exist, and a borrower is qualified on one at a time. The asset qualifier path asks whether eligible assets equal or exceed the whole loan. The asset depletion path converts assets into income that must carry the housing payment through the DTI test. Only the second path has a place for a pension.
A pension holder with modest monthly income and a large portfolio usually lands in one of three spots:
- Assets cover the loan outright. The qualifier path fits. Pension income is never documented, so it neither helps nor hurts.
- Assets are large but not loan-sized. The depletion path fits. Asset income and pension income can be combined, subject to underwriting.
- The goal is a rental. DSCR fits, and personal income is not part of the file.
Lendmire’s piece How to Combine Pension Income With Asset Depletion on a Mortgage covers the stacking question in more detail. Programs vary by lender, so the answer on any given file depends on which lender’s guidelines apply.
How Does Stacking a Pension on Depleted Assets Work?
The calculation runs in a fixed order. Most files in the network follow this sequence.
1. List the eligible assets and strip out the ineligible ones. Custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options and non-vested restricted stock units do not count on the depletion path.
2. Apply the haircuts. Cash accounts and certificates of deposit count at 100%. Securities count at 80%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%.
3. Divide the usable total by 60 months. That is the asset-derived monthly income.
4. Add the documented pension income. An award letter, bank deposits and tax forms showing the distributions are the usual support.
5. Divide total monthly debts, including the new housing payment, by the combined income. That DTI must fit the program’s test, which allows up to 45% when asset income supplements documented income.
The sanctioned example shape: $1,500,000 in securities counts at 80%, or $1,200,000, and $300,000 in cash counts at 100%. That is $1,500,000 usable. Divided by 60 months, it produces $25,000 of monthly qualifying income. Any pension would be added on top of that figure before the DTI test. The lender’s own calculation governs, and this is illustrative only.
One benefit worth knowing: when asset-derived income supplements documented income like a pension, the usual minimum-assets rule is waived. When asset depletion is the only income source, the minimum is the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 liquid. A pension can therefore lower the asset hurdle for a borrower whose portfolio is smaller.
What Must Be True for Stacking to Work?
Three conditions decide whether a pension and depleted assets can be combined on the same file.
The program allows it. Stacking is not universal. Some programs require asset depletion to stand alone, and some let it supplement. Before any appraisal is ordered, ask which kind of program the file is going into.
No double counting. If a pension is paid from an annuity or account, the underlying balance cannot also feed the depletion formula. Say a retiree holds an annuity that pays monthly. The annuity’s payments count as income, so the annuity’s balance stays out of the asset pool. This is a common cause of a pension file being re-run.
The income is documented and expected to continue. Lenders look for a pension award letter and matching deposits. A lump-sum pension that has already been rolled into an IRA is not pension income anymore. It is a retirement account, and it counts at 70% on the depletion path.
Adding pension income also does not always raise the maximum loan. If the asset-derived income already carries the payment with room to spare, the extra income changes little. If the DTI is the binding limit, the pension helps a great deal.
How Do Retirement Accounts Count?
They count differently on each path, and mixing the tables is a classic mistake.
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Brokerage accounts | 100% | Securities at 80% |
| Certificates of deposit | 100% | 100% |
| Money market and savings | 100% | Cash accounts at 100% |
| 401(k) and IRA | 90% under 59½; 100% at 59½+ | 70% at any age |
| Real-estate equity | Not listed | 60% |
Crypto, 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 source reviewed by the lender.
Seasoning matters too. On the qualifier path, assets need 60 days of seasoning and two months of statements per account. On the depletion path, statements must be 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. The assets are documented on both paths. “No income documentation” never means “no documentation.”
Pennsylvania Considerations
The program figures do not change by state. A Pennsylvania borrower sees the same percentages, divisor and leverage limits as anyone else. Consumer mortgage lending through Lendmire is licensed in 16 states, and Pennsylvania is one of them. State-level facts such as local home prices and property tax bills shape the size of the payment being qualified, but they are context, not program rules.
For Pennsylvania buyers, the practical effect is on the DTI side. A higher housing payment raises the monthly debts in the DTI test, which is where a pension earns its keep.
Leverage and Credit on the Depletion Path
On the depletion path, a principal residence or second home can go up to 80% LTV on a purchase or rate-and-term refinance and 60% on a cash-out refinance. An investment property tops out at 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Cash-out proceeds never count as qualifying assets. Loan amounts run from $125,000 to $3,500,000, subject to underwriting. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Credit follows the lender’s score and loan-amount matrix. A first-time investor on this path needs a 700 score. Housing history is 0x30x12, with a single 30-day late in the last twelve months considered case by case. A housing event needs four years of seasoning. Multiple bankruptcies are not eligible.
On the qualifier path, leverage goes up to 80% on a purchase and 75% on a refinance of a principal residence or second home. Loans reach $4,000,000, with a 600 minimum score. No reserves are required at or below 75% LTV. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Does This Work for a Rental Property?
Usually not as the first choice. For a pure rental purchase, the cleaner route is a DSCR loan. 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. See the CFPB’s Regulation Z page for the business-purpose exemption, which turns on the creditor’s case-by-case determination of primary purpose.
A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. The borrower’s pension and depleted-asset income stay out of the file. Credit, assets for reserves, and entity documents are still reviewed. The tradeoff is simple: a weak-rent property fails on DSCR no matter how strong the borrower’s portfolio is, while a personal-income program can fund a property with thin rent.
Programs below 1.00 coverage are available through select lenders in the network, but LTV and terms adjust. The complete DSCR loans guide walks through how that trade works. The depletion path also allows investment property, at the lower 65% and 60% leverage noted above, and Lendmire’s piece How Asset Depletion Counts Income for a Rental Portfolio Buyer covers that case. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
When to Combine, and When Not To
| Situation | Better fit |
|---|---|
| Assets cover the whole loan | Asset qualifier path |
| Portfolio is large, pension is modest | Depletion path, pension stacked |
| Pension alone nearly carries the payment | Depletion path with supplement, minimum-assets rule waived |
| Buying a rental, weak personal income | DSCR |
| Property rent is thin, borrower is asset-rich | Depletion path on investment property |
What Can Go Wrong
- Double counting. The same balance shows up as both an income source and a depleted asset. Fix it by removing one.
- Stale statements. The depletion path wants statements at least 120 days old plus one within 45 days. Missing either one stalls the file.
- Ineligible assets. Crypto, borrowed funds or foreign accounts counted at face value get stripped out, and the usable total drops.
- Thin pension paperwork. A pension with no award letter or deposit trail does not stack.
- Wrong path. Blending the qualifier and depletion tables produces numbers that fit neither.
If a lender says no, ask which test failed: the asset total, the DTI, the seasoning or the credit matrix. Each has a different fix, and a different lender in the network may weigh them differently.
Frequently Asked Questions
Can I use a pension on the asset qualifier path?
No. The qualifier path documents no employment or income. Eligible assets, after the credit percentages, must equal or exceed the whole loan amount, so a pension adds nothing there.
Does a pension lower the minimum assets needed?
Yes, in a supplementing case. When asset-derived income supplements documented income, the minimum-assets rule is waived, subject to underwriting. With asset depletion as the only income source, the minimum is the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 liquid.
Can I count my IRA and also the pension it funds?
Not both. If the account is what pays the income, the balance cannot also be depleted. Pick one treatment for each dollar.
Are my assets sold or drained?
No. The assets stay in your accounts. The lender only uses their value to compute qualifying income, and the assets are documented on both paths.
Does my spouse’s income count?
It can, if the spouse is a co-borrower and the income is documented under the program. Each borrower’s income type is reviewed on its own terms, subject to underwriting.
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. Tax treatment varies; consult a qualified professional.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps self-employed and high-net-worth borrowers in 16 states qualify on bank statements, a profit-and-loss statement, 1099s or liquid assets instead of tax returns, through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and its guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Asset Depletion Income Formula and Haircuts · Asset Depletion vs DSCR for a Retired Buyer With No Paycheck · Asset Depletion vs Bank Statements vs DSCR for a Luxury Rental Buyer
Guides: Asset-Based Mortgage in Pennsylvania
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.