The Quick Read: It depends on which of three limits binds first: the leverage cap on the property, the loan-size ceiling, and the amount of usable assets you can document. On the asset qualifier path, the loan can reach $4,000,000, and your usable assets must cover the entire loan. On the asset depletion path, loans run $125,000 to $3,500,000, and your assets are converted into monthly income that must carry the payment.
- Asset qualifier path: up to 80% loan-to-value on a purchase and 75% on a refinance of a second home, subject to underwriting. No employment or income is documented.
- Asset depletion path: up to 80% on a second-home purchase or rate-and-term refinance and 60% on a second-home cash-out, through select programs. Usable assets divided by 60 months become your qualifying income.
- Texas: the 80% combined-lien rule people quote is a homestead rule. It is written for equity loans on your primary residence, not for buying a second home.
- Use of the home: these loans fit personal-use second homes. A property bought mainly to rent is a different product.
Across the wholesale network, the same pattern shows up on nearly every file. The borrower has large balances and little documented income. The question is not whether the money exists. The question is how much of it each path will count.
Which Path Fits a Texas Second-Home Buyer?
Pick the asset qualifier path if your usable assets can cover the whole loan. Pick the asset depletion path if your assets are large but you need them to behave like income. A borrower is qualified on one path at a time. The two tables never blend.
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| How it qualifies | Assets must equal or exceed the entire loan | Assets ÷ 60 months = monthly income |
| Income documented | None | Derived income, run through debt-to-income |
| Loan size | Up to $4,000,000 | $125,000 to $3,500,000 |
| Second-home purchase | Up to 80% LTV | Up to 80% LTV |
| Second-home refinance | Up to 75% LTV | 80% rate-and-term, 60% cash-out |
| Credit | 600 minimum score | The lender’s score and loan-amount matrix |
All figures are ceilings and floors from select programs, subject to underwriting. They are not offers.
On the qualifier path, the logic is simple. Eligible assets, after the credit percentages below, must be at least as large as the loan. The lender’s review rests on those assets rather than on a paycheck.
On the depletion path, the logic is about income. Your usable balances are divided by 60 months. That monthly figure must carry the housing payment and your other debts through the debt-to-income test.
How Much Of Each Account Counts?
Cash and brokerage balances count at or near full value, retirement balances count at a discount, and a long list of asset types does not count at all. The credit percentage differs by path, so name the path before you read any figure.
On the qualifier path, the share of each balance that counts looks like this:
- Brokerage accounts, certificates of deposit, money market and savings: 100%.
- 401(k) and IRA balances: 90% if you are under 59½, and 100% at 59½ or older.
- Accounts combine, so several statements can add up to one total.
On the depletion path, the haircuts are steeper:
- Cash accounts and certificates of deposit: 100%.
- Securities: 80%.
- Private stock: 75%.
- Retirement accounts: 70% at any age.
- Real-estate equity: 60%.
Several asset types are not eligible on the depletion path. These include 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.
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 to convert them to a seasoned cash balance in a regulated account. The lender then reviews the source of that cash. Cash-out proceeds from the new loan never count as qualifying assets.
What Is the Maximum Loan on the Qualifier Path?
The maximum is the lowest of three numbers: the $4,000,000 ceiling, the leverage cap on the property, and your usable assets. Most borrowers hit the third number first.
Here is the illustrative shape. An $800,000 loan is backed by $330,000 in brokerage accounts (100% counts, so $330,000), $300,000 in a 401(k) while under 59½ (90% counts, so $270,000), and $200,000 in savings (100% counts, so $200,000). That totals $800,000 of usable assets, so the file is reviewed on assets alone. The lender’s own calculation governs the real result.
Notice what moved the number. The 401(k) is worth $300,000 on the statement but counts as $270,000. Once you turn 59½, the full balance counts. Timing alone can change the answer.
Leverage sets the second limit. On a second-home purchase, the loan can reach 80% of value. On a refinance of a second home, it can reach 75%. Whether a lender will allow cash-out proceeds on this path, and at what leverage, is the lender’s call and is not published. Do not plan around it.
For a purchase, the down payment and closing costs have to come from somewhere. Plan on balances beyond the amount that covers the loan, and expect the lender to review the source of those funds. A buyer whose assets only just match the loan has no room for the down payment.
Reserves are straightforward on this path. None are required at or below 75% loan-to-value. Above that level, the lender sets them.
What Is the Maximum Loan on the Depletion Path?
On the depletion path, the maximum is set by the monthly income your assets produce and by the debt-to-income test, with the leverage cap and the loan-size range on top. The 60-month divisor is the engine.
The illustrative shape: $1,500,000 in securities counts at 80%, which is $1,200,000. Add $300,000 in cash at 100%, which is $300,000. That is $1,500,000 of usable assets. Divide by 60 months and you get $25,000 of monthly qualifying income. That income then has to carry the housing payment and every other debt through the debt-to-income test.
This is why two borrowers with the same net worth can borrow different amounts. A portfolio full of cash converts almost whole. A portfolio held mostly in retirement accounts converts at 70%. Home equity converts at 60%.
The path also has minimum assets. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When assets are your only source of income, you also need at least $250,000 in liquid assets. If you have documented income as well, the asset-derived income can supplement it up to a 45% debt-to-income ratio. In that case the minimum-assets rule is waived.
Existing debt reduces capacity on this path. Car loans, other mortgages and any other monthly obligations sit in the same debt-to-income test as the new housing payment. A borrower who owns a lake house in another state should expect that payment to count.
Leverage on the depletion path is 80% on a second-home purchase or rate-and-term refinance, and 60% on a second-home cash-out. Credit follows the lender’s matrix. Housing history is reviewed at 0x30x12, and one 30-day late in the last twelve months is considered case by case. A housing event such as a foreclosure needs four years of seasoning on this path. Multiple bankruptcies are not eligible.
Does Texas Law Cap the Loan?
No Texas constitutional cap applies to the purchase of a second home. The well-known 80% rule is written for equity loans on a homestead. That distinction matters because search results blur the two.
Article XVI, Section 50 of the Texas Constitution protects a homestead from forced sale. It permits only a short list of liens against it. The Texas Legal Guide reproduces the text of Section 50. The Texas Attorney General’s opinion JC-0357 explains that the provision invalidates any lien on the homestead unless it secures a debt the provision lists.
The home-equity subsection is where the familiar limits come from. A Texas Legal Guide summary of homestead protections describes the 80% combined-lien cap and the 12-day notice period. Those rules govern cash-out against your own primary residence.
As we read it, a second home you do not live in as a homestead is not subject to that cap. Your loan is limited by the program’s leverage and asset rules instead. Homestead status turns on how you actually occupy a property. If you spend meaningful time in the Texas second home and treat it as a residence, ask a Texas real estate attorney how that status applies to your situation.
| Situation | What governs the loan size |
|---|---|
| Cash-out on your Texas primary residence | The homestead equity rules, including the 80% combined cap |
| Buying a Texas second home on assets | The program’s leverage, asset and loan-size limits |
| Buying a Texas second home with equity from your primary home | Both: the homestead rules on the draw, the program rules on the purchase |
That third row catches buyers off guard. If you plan to pull equity from your own home to fund the second one, the homestead limits shape how much you can pull. Lendmire’s piece How Much a Texas Homestead Cash-Out Refinance Funds for a Second Home covers that side.
Purchase Versus Borrowing Against a Home You Already Own
These are two different questions, and the leverage caps differ. A purchase gets the highest leverage. A cash-out gets the lowest.
If you are buying, the qualifier path allows up to 80% on a purchase. The depletion path also allows up to 80%.
If you already own the second home and want to refinance, the qualifier path allows up to 75%. The depletion path allows 80% on a rate-and-term refinance and 60% on a cash-out. Cash-out on the depletion path takes the biggest cut, so a borrower expecting to pull a lot of cash should plan for that 60% cap.
Is This the Right Product for a Home You Will Rent?
Only if you also use the home yourself and it is a true second home. A property bought to rent is an investment property, and that is a different loan.
Asset-based mortgages here are consumer loans for principal residences and second homes. Investment property is available only on the depletion path, at lower leverage: up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out. A first-time investor on that path needs a 700 credit score. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
If your plan is to buy mainly to collect rent, the usual 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. Lendmire’s complete DSCR loans guide covers how that product is reviewed on property-level rental income.
A third option exists for borrowers who document income with deposits. That is the bank statement program, and it is built around deposits rather than balances. If you have large deposits and a business, it is worth comparing. If you have large balances and no steady deposits, asset-based fits better.
Misrepresenting how you will use the property is a serious problem. If you intend to live in the home part of the year, say so. If you intend to rent it, say that too, and the file will be placed in the right program.
Documents and Seasoning
Asset-based means no traditional personal-income documentation, pay stubs or employment verification, not no documentation. Every qualifying account is documented, and the statements have to be old enough.
On the qualifier path, expect 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 a most recent statement dated within 45 days. Funds from the sale of a business, an inheritance or a legal settlement are excused from that seasoning.
For a retiree or a business seller, this is the step that usually causes trouble. Funds that arrived last month, or moved between accounts last month, trigger questions. Moving money between your own accounts can break the seasoning chain and force the lender to trace the source. The list below shows what to gather first.
A clean file usually has these items:
1. Two full months of statements for every account you want counted, with every page.
2. For depletion, one statement within 45 days and older statements showing balances at least 120 days back.
3. Documentation for any large recent deposit.
4. A conversion plan for any crypto or metals, with the cash seasoned in a regulated account.
5. A clear list of other debts and properties.
Mistakes That Shrink the Number
Most undersized files come from counting the wrong dollars. These are the usual causes.
- Counting retirement balances at full value. On the qualifier path they count at 90% before 59½. On the depletion path they count at 70% at any age.
- Counting the old home’s equity as cash. Real-estate equity counts at 60% on the depletion path, and not as cash.
- Moving money right before applying. Fresh deposits and transfers break seasoning.
- Including ineligible assets. Stock options, unvested units and foreign funds do not count.
- Forgetting existing debt. On the depletion path, every other monthly debt sits in the same ratio as the new payment.
- Assuming the qualifier path allows cash-out. That is the lender’s call and is not published.
- Picking one path by habit. The same balance sheet can produce a very different answer on the other path.
Key Terms Defined
Asset qualifier path: A path where eligible assets, after the credit percentages, must cover the entire loan, and no income is documented.
Asset depletion path: A path where usable assets are divided by 60 months to create monthly qualifying income.
Usable assets: The share of each balance a program counts after its percentages or haircuts.
Seasoning: The length of time funds must sit in an account, shown through statements, before they count.
Loan-to-value (LTV): The loan amount as a percentage of the property’s value.
Homestead: Your primary residence, which Texas protects from forced sale and from most liens.
Frequently Asked Questions
Can I borrow more than my assets are worth on the qualifier path?
No. Eligible assets, after the credit percentages, must equal or exceed the entire loan. The loan also stays within the leverage cap, 80% on a second-home purchase and 75% on a refinance, subject to underwriting.
Does Texas limit a second-home loan to 80% of the value?
The 80% figure comes from the homestead equity rules in the state constitution, which apply to equity loans on your primary residence, per a Texas Legal Guide summary. A second-home purchase is limited by the program’s own leverage and asset rules instead. If your use of the property could make it your homestead, ask a Texas attorney.
Which path gives a larger loan?
The qualifier path reaches $4,000,000, while the depletion path tops out at $3,500,000. In practice, the better path depends on your balance sheet. Cash-heavy borrowers tend to do well on qualifier. Borrowers with large securities portfolios and moderate debts may prefer depletion.
Do I need to sell my investments or pledge them?
The program counts balances and reviews statements. The mechanics of any pledge or liquidation depend on the lender and the file. Ask your loan officer how the lender treats your accounts before you move anything.
Can I use this for a home I plan to rent out?
Not as a personal-use second home. A property bought mainly to rent is an investment property. That is available on the depletion path at lower leverage, or through a DSCR loan, depending on your goals.
Tax treatment varies; consult a qualified professional. 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 arranges these loans through select lenders in its network, and every file is underwritten individually. Consumer mortgage lending is licensed in 16 states, Texas among them.
Lendmire’s asset-based mortgage in Texas page presents the program for Texas borrowers.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges bank statement, P&L-only, 1099-only and asset-based home financing in 16 states through wholesale lenders, on primary residences, second homes and investment properties. Every option is subject to the lender’s guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Texas Legal Guide: Texas Constitution, Article XVI, Section 50
2. Texas Attorney General opinion JC-0357
3. Texas Legal Guide: Texas homestead protections
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 Finance an Ohio Vacation Home With an Asset Qualifier Mortgage · Pledged Asset Line vs Asset Qualifier Mortgage for an Indiana Home Purchase · Asset-Based Mortgage vs Home Equity Investment for Retirees Who Need Cash
Guides: Asset-Based Mortgage in Texas
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.