The Quick Read: It depends on what the $1,000,000 is made of. On the asset depletion path in Lendmire’s wholesale network, usable assets are divided by 60 months. $1,000,000 of cash and CDs counted at 100% gives about $16,667 of monthly qualifying income, and the same amount in retirement accounts gives about $11,667. That number is an underwriting figure, not a withdrawal. Programs change and every file is underwritten individually.
- All cash and CDs count at 100%, so $1,000,000 in those assets yields the full balance spread over 60 months.
- Securities count at 80%, retirement accounts at 70%, and real-estate equity at 60%.
- You do not sell or spend the assets. The lender uses them to calculate income.
- The number still has to carry your housing payment and other debts through the debt-to-income test.
- If your assets can cover the whole loan, the asset qualifier path skips income altogether.
Which Path Fits an Alabama Borrower?
Two paths exist, and a borrower is qualified on one at a time. The asset qualifier path covers the entire loan with eligible assets and documents no employment or income. The asset depletion path turns usable assets into monthly income, and that income carries the payment through the debt-to-income test.
Alabama is one of the 16 states where Lendmire’s consumer mortgage operation is licensed. The program figures do not change by state. State facts like taxes, insurance and local prices affect your budget, but they are not program parameters.
Both paths document the assets. “No income documentation” never means “no documentation.” Statements, seasoning and source review all apply. Lendmire arranges these loans through select lenders in its network. It is a broker, not the lender, and nothing here is a commitment to lend.
The Formula, in Order
The math has four steps. Each one changes the answer.
1. Inventory the eligible accounts. Only documented, borrower-owned accounts in the eligible classes count.
2. Apply the credit percentage. Each asset class counts for a share of its balance. The shortfall is called a haircut.
3. Account for what you spend on the purchase. Money that leaves the account for a down payment or closing costs is no longer there when the lender reviews it. Expect underwriting to work from what remains.
4. Divide by 60. The result is monthly qualifying income.
Take a worked example. A borrower holds $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. Usable assets are $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income. That figure then carries the housing payment and other debts through the debt-to-income test. This is illustrative arithmetic, and the lender’s own calculation governs.
The $1,000,000 Worked Out by Asset Mix
The same balance produces very different income depending on where it sits. These are illustrative, using the program percentages and the 60-month divisor.
| $1,000,000 held as | Counts as usable | Monthly qualifying income |
|---|---|---|
| All cash and CDs (100%) | $1,000,000 | About $16,667 |
| All securities (80%) | $800,000 | About $13,333 |
| All retirement accounts (70%) | $700,000 | About $11,667 |
| All real-estate equity (60%) | $600,000 | $10,000 |
Most real portfolios are mixed. Consider $500,000 in securities and $500,000 in retirement accounts. Securities count $400,000 and retirement accounts count $350,000. Now consider $600,000 in cash and $400,000 in real-estate equity. Cash counts $600,000 and equity counts $240,000.
Retirement accounts count at 70% at any age on this path. That differs from the qualifier path, where 401(k) and IRA balances count at 90% under age 59½ and 100% at 59½ or older. Name the path before you quote a figure. Never blend the two tables.
Fannie Mae’s Selling Guide topic on employment-related assets is a useful contrast. It covers only a narrow set of assets and subtracts an early-withdrawal penalty from retirement accounts in its example. Those are agency rules and do not govern this program. Lender programs set their own percentages, so compare haircuts as closely as you compare the divisor.
Why $1,000,000 Is Rarely a Clean $1,000,000
Most of the shrinkage happens before the divide. Several things pull the usable pool down.
Haircuts. Anything other than cash and CDs counts for less than its full balance.
The purchase itself. A buyer who moves $250,000 out of the account to close is dividing what is left, not the starting balance.
Ineligible assets. On the depletion path, these do not count at all:
- custodial accounts
- deferred compensation
- escrow accounts
- foreign funds
- cash on hand
- privately held stock (not eligible on either path)
- stock options
- non-vested restricted stock units
- funds from non-regulated financial companies
A business owner holding closely held company shares has one route: a sale or buyout converted to a seasoned cash balance.
Unlisted classes. Cryptocurrency, 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. They do not count at some percentage in the meantime.
Cash-out proceeds from a refinance never count as qualifying assets on the depletion path.
Does $1,000,000 Even Clear the Minimums?
Yes, and it sits right at the line. On the depletion path, qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When asset depletion is the only income source, liquid assets can never fall below $250,000. These are subject to underwriting.
Here is the catch. A $1,000,000 balance meets the $1,000,000 ceiling on that test, but a borrower who spends part of it on the purchase may fall below it. The minimum is waived when asset income only supplements documented income, up to a 45% debt-to-income ratio. A retiree with a pension and Social Security can use that route and need less.
Loan amounts on the depletion path run from $125,000 to $3,500,000. The lender’s score and loan-amount matrix sets the credit floor. A first-time investor on this path needs a 700 score. Housing history should be 0x30x12, though one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible, and a housing event needs four years of seasoning.
From Qualifying Income to a Purchase
Qualifying income is not a payment limit. It is the income side of a debt-to-income test. The housing payment, taxes, insurance, any HOA dues and all other monthly debts sit on the other side.
That is why two borrowers with the same $1,000,000 can buy very different homes. One carries a car loan and a student loan. The other carries nothing. The first has less room.
Leverage matters too. On the depletion path, a principal residence or second home can go up to 80% 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. Those are ceilings, not offers. A Birmingham, Huntsville, Mobile or Gulf Shores buyer should expect insurance and tax costs to land in the payment, and those vary by county and property.
When Assets Can Cover the Whole Loan
If your balances are large enough, you may not need an income number at all. The asset qualifier path tests whether eligible assets, after credit percentages, equal or exceed the entire loan amount. Loans run up to $4,000,000. Leverage is up to 80% on a purchase and 75% on a refinance on a principal residence or second home.
Credit percentages are friendlier here. Brokerage, CDs, money market and savings count at 100%. Retirement accounts count at 90% under 59½ and 100% at 59½ or older. Credit starts at a 600 floor. Seasoning is 60 days, with two months of statements for each qualifying account. No reserves are required at or below 75% loan-to-value, and above that the lender sets them.
Here is an example. An $800,000 loan with $330,000 in brokerage accounts, $300,000 in a 401(k) under 59½ (counted at 90%, or $270,000) and $200,000 in savings counts $800,000 of usable assets and is reviewed on assets alone, subject to underwriting. Whether the qualifier path allows cash-out is up to the lender and is not published.
For a pure rental purchase, many Alabama investors skip both paths and use 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. Federal rules treat credit for a non-owner-occupied rental as business-purpose, with a 14-day owner-occupancy trigger. DSCR qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Select lenders in the network also review coverage below 1.00, though leverage and terms adjust.
Key Terms Defined
Qualifying income: The monthly figure a lender calculates from your assets. It is used only in underwriting.
Divisor: The number of months the assets are divided by. On this program’s depletion path it is 60.
Haircut: The share of a balance that does not count. A 70% credit means a 30% haircut.
Seasoning: How long funds must have sat in the account before they count.
Asset qualifier path: The route where assets alone cover the whole loan and no income is documented.
Documents and Seasoning That Trip Files
The assets are documented on both paths. The qualifier path wants 60 days of seasoning and two months of statements for each account. The depletion path wants statements at least 120 days old at application, plus the most recent statement within 45 days. Funds from the sale of a business, an inheritance or a legal settlement are excused from that seasoning.
Common problems:
- A large deposit with no paper trail.
- A statement missing pages.
- Assets sitting in an ineligible class.
- A balance that drops below the minimum after closing costs.
Frequently Asked Questions
Is the income just $1,000,000 divided by 60?
Only when every dollar is cash or CDs counted at 100%. In that case the pool is simply spread evenly across the 60 months. Securities, retirement accounts and equity count for less. Money you spend on the purchase leaves the pool first. The lender’s own calculation governs.
Do I have to sell or withdraw the assets?
No. The conversion is an underwriting calculation. You keep the accounts. The lender needs them documented and seasoned, and it reviews what stays in them at closing.
Can retirement accounts count?
Yes. On the depletion path they count at 70% at any age. On the qualifier path they count at 90% under 59½ and 100% at 59½ or older. Name the path before comparing numbers.
Can I use this to buy a rental property in Alabama?
On the depletion path, investment property is eligible at 65% on a purchase or rate-and-term refinance and 60% on a cash-out, subject to underwriting. Many rental buyers still choose DSCR, which qualifies the property on rent rather than your assets.
What if I also have a pension or Social Security?
Asset income can supplement documented income up to a 45% debt-to-income ratio. When it does, the minimum-assets rule is waived. That can help a retiree whose documented income is real but small.
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 programs based on your statements, the property, credit profile, leverage, and your goals. Reach the team at 828-256-2183 or request a quote.
A $1,000,000 portfolio can support anything from a tight file to a comfortable one, and the mix inside it usually decides which.
Lendmire’s asset-based mortgage in Alabama page presents the program for Alabama borrowers.
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 traditional personal-income documentation understates 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, B3-3.4-06 Employment-Related Assets as Qualifying Income
2. Consumer Financial Protection Bureau, Regulation Z §1026.3
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 You Buy a Second Home in Alabama on Assets Instead of Income? · How Much Does a Virginia Retiree Need in Assets to Buy a Home Without Income? · How to Refinance a Virginia Mortgage After Retiring With No W-2 Income
Guides: Asset-Based Mortgage in Alabama
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.