The Quick Read: No, not when your assets carry the loan. The lender reviews your file on documented balances instead of employment or income. Several situations can change that, including blending in other income, a lender overlay on your file, or switching to a different program. Either way, you still document every asset, your credit, and the property, subject to underwriting.
- Asset qualifier path: your eligible assets must equal or exceed the entire loan amount, and no employment or income is documented.
- Asset depletion path: usable assets are divided by 60 months to create a qualifying income, which then runs through the debt-to-income test.
- Paperwork shifts, it does not vanish: statements, seasoning, credit, and property documents all stay on the file.
- Tennessee context: the program figures below do not change by state, and Lendmire is licensed for consumer mortgage lending in Tennessee.
What does “asset-based” mean here?
Asset-based means your balances do the qualifying instead of your paycheck or your tax return. Through select programs in Lendmire’s wholesale network, that happens one of two ways. Each way has its own rules, and a borrower is reviewed on one path at a time.
On the asset qualifier path, the lender adds up your eligible assets after applying the credit percentages. If the total equals or exceeds the whole loan, you qualify on assets alone. No employment or income is documented.
On the asset depletion path, the lender turns those assets into monthly income. It applies a haircut to each asset type, adds them up, and divides by 60 months. That income has to carry the housing payment and your other debts through the debt-to-income test.
The term is also used loosely. Some people say “asset-based” and mean a rental loan where the property’s rent drives lender review. That is a DSCR loan, and it is a different product. The next sections cover the consumer asset paths first, then the rental alternative.
Key Terms Defined
Asset qualifier path: a program where eligible assets must cover the full loan amount and no income is documented.
Asset depletion path: a program that divides usable assets by 60 months to create qualifying monthly income.
Seasoning: the length of time money must sit in your accounts before the lender counts it.
Debt-to-income (DTI): your monthly debts, including the new housing payment, compared with your monthly qualifying income.
DSCR: debt service coverage ratio, meaning a rental property’s rent measured against its monthly obligation.
Which path fits you?
The qualifier path suits borrowers whose balances dwarf the loan. The depletion path suits borrowers who need the assets to behave like income, usually because the payment has to fit a DTI test. The table shows how the two differ. Every figure is a ceiling or floor, subject to underwriting, never an offer.
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| Reviewed on | Assets cover whole loan | Assets ÷ 60 months = income |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Occupancy | Primary or second home | Primary, second, or investment |
| Credit | 600 minimum score | Lender’s matrix |
| Statements | 60 days, two months per account | 120 days old plus one within 45 days |
Leverage differs by path and occupancy. On the qualifier path, loan-to-value (LTV) runs up to 80% on a purchase and 75% on a refinance of a principal residence or second home. The lender sets any qualifier-path cash-out terms, and they are not published.
On the depletion path, a principal residence or second home can reach 80% LTV on a purchase or rate-and-term refinance. A cash-out refinance on those homes tops out at 60%. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
An investment property on the depletion path runs up to 65% on a purchase or rate-and-term refinance, and 60% on a cash-out. Cash-out proceeds never count as qualifying assets.
Which assets count, and how much of each?
Not every dollar counts at face value. Qualifier-path credit looks like this, through select programs:
- Brokerage accounts, certificates of deposit, money market, and savings count at 100%.
- A 401(k) or IRA counts at 90% if you are under 59½, and 100% at 59½ or older.
- Accounts combine, so you can mix types to reach the loan amount.
The depletion path is stricter, because it applies haircuts:
- Cash accounts and certificates of deposit count at 100%.
- Securities count at 80%.
- Private stock counts at 75%.
- Retirement accounts count at 70% at any age.
- Real-estate equity counts at 60%.
Some assets are not eligible on the depletion path at all. That list includes 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 converting them into a seasoned cash balance in a regulated account. The lender then reviews the source.
Many borrowers hold retirement accounts and assume they must drain them. Neither path requires you to sell an asset just to be counted, but any money you move for the down payment and closing has to be traceable. Tax treatment can depend on how the funds are used and how the property is held; borrowers should keep clear records and speak with a qualified tax professional before relying on any deduction.
What do you hand over instead of tax returns?
Expect a thick folder, just a different one. Across the wholesale network, a typical asset-based file includes:
- Statements for every qualifying account. The qualifier path wants two months per account and 60 days of seasoning. The depletion path wants statements at least 120 days old at application, plus the most recent one within 45 days.
- Credit authorization and ID.
- The purchase contract or current mortgage information, plus the appraisal.
- Source documentation for any large deposit.
Sale-of-business, inheritance, and legal-settlement funds are excused from the depletion path’s seasoning rule. The lender still reviews where that money came from.
Credit still matters. The qualifier path has a 600 minimum score. The depletion path follows the lender’s score and loan-amount matrix, and a first-time investor needs 700 on that path.
Housing history is generally 0x30x12, though 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.
One more point: this is a consumer mortgage, so ability to repay is judged by the assets. Reserves are not required on the qualifier path at or below 75% LTV. Above that, the lender sets them. The depletion path has no published reserve months. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
How the math works (illustrative only)
Run the numbers on the qualifier path first. Say you want an $800,000 loan. You hold $330,000 in brokerage accounts, which count at 100%, so $330,000. You hold $300,000 in a 401(k) while under 59½, which counts at 90%, so $270,000. You hold $200,000 in savings, which counts at 100%, so $200,000.
Total usable assets come to $800,000, which equals the loan. You qualify on assets alone, subject to underwriting and the lender’s own calculation.
Now the depletion path. Picture a household holding $1,500,000 in securities and $300,000 in cash. Securities count at 80%, so $1,200,000. Cash counts at 100%, so $300,000. That is $1,500,000 usable, and dividing by 60 months gives $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. If the test fails, the loan size or the leverage has to come down.
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. When asset depletion is your only income source, you also need at least $250,000 liquid.
When can tax returns still come up?
Three situations put tax documents back in play.
Blended income. Asset-derived income may supplement documented income on the depletion path, up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived. But the documented income piece comes with its own proof, and that proof may include returns under the applicable program. If you want zero income paperwork, qualify on assets alone.
Lender overlays. Programs in a wholesale network are not identical. A few lenders add conditions on unusual files, such as a recent business sale or a thin credit history. Your loan officer sees these before you apply, which is the point of shopping across lenders.
Switching products. A borrower who wants to document income with business deposits is in a different lane. Lendmire’s piece How Many Years of Tax Returns Does a Self-Employed Mortgage Need? covers what those files look like. Founders who just sold a company should read Lendmire’s guide Can Tech Founders Get a Mortgage After an Exit Without Tax Returns?. Their sale proceeds often fit the seasoning exception above.
Does Tennessee change the answer?
Not for the program figures. The leverage limits, asset credit, seasoning, and credit minimums are the same for a Tennessee borrower as for any borrower in the 16 states where Lendmire is licensed for consumer mortgage lending. State facts like local prices are context, not program parameters.
A retiree relocating to the Nashville area, or a business owner buying a second home, runs the same asset math. What changes is the property: the appraisal, the price, and the loan size.
Investment property: asset-based mortgage or DSCR?
Pick by the purpose of the loan. If you buy a rental through an asset-depletion consumer loan, the 65% purchase and 60% cash-out limits apply, and your depletion income has to pass the debt-to-income test. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
If you are buying a pure rental, the usual answer 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.
The consumer-protection rules carve out credit made primarily for business purposes, and the CFPB’s Regulation Z exemption covers exactly that. That is why a DSCR lender can look at rent instead of your personal income. Note what decides the question: purpose, not paperwork.
An LLC does not change this by itself. ABA Banking Journal’s compliance Q&A notes that the loan’s purpose, not an LLC guarantor, determines whether the exemption applies. So a home you will live in is not a DSCR candidate, however it is titled.
A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Programs below 1.00 coverage are available through select lenders in the network, but LTV and terms adjust. Credit, down payment, reserves, and property type all matter too. Lendmire’s complete DSCR loans guide walks through those requirements.
One caution applies across all non-QM options. Accredited Real Estate Schools frames the three questions these loans answer: what the deposits show, whether the rent covers the mortgage, and whether the assets support repayment. Asset-based loans answer the third question, DSCR the second, and bank-statement loans the first. Choose the one that matches how your strength actually shows up on paper.
Who should skip this?
Skip the asset-based route if your reportable income is strong. A borrower with steady W-2 pay and clean returns often fits full-documentation financing with less asset scrutiny.
Skip it if your wealth sits in assets that do not count. Crypto, collectibles, and borrowed funds have to be converted to seasoned cash first. And skip the depletion path if your total assets fall below its minimums, since those are floors, not suggestions.
Finally, treat the figures here as ceilings, not offers. Programs change, and every file is underwritten individually.
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. As a broker, it arranges the loan through select lenders and does not make credit decisions. Reach the team at 828-256-2183.
Frequently Asked Questions
Do I need W-2s or pay stubs for an asset-based mortgage?
Not on the asset qualifier path, where no employment or income is documented. On the depletion path, W-2s are not needed to create the asset-derived income. If you blend in documented income, that portion carries its own paperwork. Underwriting governs every file.
Can I use retirement accounts to qualify?
Yes, through select programs. On the qualifier path, a 401(k) or IRA counts at 90% if you are under 59½ and 100% at 59½ or older. On the depletion path, retirement accounts count at 70% at any age. You do not have to liquidate the account just to have it counted.
Do I have to be a first-time buyer, or can I buy a rental?
You can buy a rental only on the depletion path, with investment property limited to 65% LTV on a purchase or rate-and-term refinance and 60% on a cash-out. A first-time investor needs a 700 score on that path. A pure rental purchase usually fits a DSCR loan better.
What is the difference between this and a bank-statement loan?
A bank-statement program is for borrowers who document income with deposits. An asset-based program ignores income and looks at balances. If you have strong business deposits but modest savings, the bank-statement route may fit better. If you have the reverse, assets win.
Does cash-out work on an asset-based refinance?
It depends on the path. On the depletion path, cash-out is limited to 60% LTV for a primary residence, second home, or investment property, and the proceeds never count as qualifying assets. The qualifier path’s cash-out terms are set by the lender and are not published. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Lendmire’s asset-based mortgage in Tennessee page presents the program for Tennessee borrowers.
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 § 1026.3, Exempt transactions
2. ABA Banking Journal: When the loan applicant is an individual but the guarantor is an LLC
3. Accredited Real Estate Schools
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 Long Should Money Sit in an Account Before an Asset-Based Mortgage Application? · How an Asset Depletion Mortgage Works · Can You Get an Asset Depletion Mortgage After a Foreclosure or Short Sale?
Guides: Asset-Based Mortgage in Tennessee
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.