The Quick Read: To finance a Texas vacation home on assets instead of paychecks, you pick one of two paths: the asset qualifier path, where your eligible balances must cover the entire loan, or the asset depletion path, where your balances are converted into monthly income that carries the payment. Both paths document your assets in full. Only income goes undocumented on the qualifier path. Every file is placed through select lenders in Lendmire’s network and is subject to underwriting.
Key takeaways
- The asset qualifier path needs eligible assets that equal or exceed the whole loan, with no income documented.
- The asset depletion path divides usable assets by 60 months to create qualifying income, which then runs through a debt-to-income test.
- A borrower is qualified on one path at a time, and the two paths have different credit percentages and leverage limits.
- Whether the Texas property is a second home or an investment property changes the leverage, the paperwork, and whether rent can help.
What Is an Asset Qualifier Mortgage?
An asset qualifier mortgage is a way of qualifying for a loan, not a separate kind of house. The lender looks at what you own in liquid accounts instead of what you earn. Your accounts are not pledged as collateral. The Texas property secures the loan, as it would with any mortgage.
This fits a specific reader. Think of a retiree living on a portfolio, someone who just sold a business, or a household that received an inheritance or a settlement. The balances are large. The documented income is small or irregular.
Across Lendmire’s wholesale network, the phrase “asset-based” covers two different methods. They are easy to blur, so here they are side by side.
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| How it qualifies | Eligible assets cover the entire loan | Assets become monthly income |
| Income documented | None | Derived income, run through DTI |
| Divisor | Not used | 60 months |
| Max loan amount | Up to $4,000,000 | $125,000 to $3,500,000 |
| Property types | Principal residence, second home | Also investment property |
DTI means debt-to-income ratio: your monthly debts divided by your monthly income. The qualifier path skips that test because no income is documented. The lender’s ability-to-repay review rests on the assets instead.
Which Path Fits a Vacation Home Buyer?
Pick the qualifier path if your eligible assets can cover the whole loan amount. Pick the depletion path if they cannot, or if the property may be treated as an investment property. Qualification is subject to underwriting on either one.
Leverage differs by path, and the label matters. These figures are ceilings, not offers.
On the asset qualifier path, the ceiling is 80% loan-to-value (LTV) on a purchase of a principal residence or second home. On a refinance of a principal residence or second home, it is 75%. The lender sets cash-out terms on this path and does not publish them, so do not plan around cash-out proceeds here.
On the asset depletion path, the ceilings are:
- A principal residence or second home: up to 80% LTV on a purchase or rate-and-term refinance, and 60% on a cash-out refinance.
- An investment property: up to 65% LTV on a purchase or rate-and-term refinance, and 60% on a cash-out refinance. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Cash-out proceeds never count as qualifying assets on the depletion path.
Credit also differs. The qualifier path has a published floor of 600. The depletion path follows the lender’s matrix of score and loan amount. A first-time investor on the depletion path needs a 700 score. A housing event such as a foreclosure needs 4 years of seasoning on the depletion path. Housing history is expected at 0x30x12, and one 30-day late payment in the last twelve months is considered case by case. Multiple bankruptcies are not eligible.
How Underwriting Treats Your Assets, Step by Step
Underwriting moves in a fixed order: classify the property, count the eligible assets, subtract the money you will spend, then test the result. The order matters because each step shrinks the number the next step uses.
1. Classify the property. Decide whether it is a second home or an investment property. This drives the leverage, the paperwork, and whether rent counts.
2. List your eligible assets. Only accounts the program accepts go on the list.
3. Apply the credit percentages. Each account type counts at a set share of its balance. Those shares are in the next section.
4. Subtract money committed to the purchase. Your down payment and costs to buy leave the accounts before they are counted. The same dollars cannot qualify you and also pay for the house.
5. Run the test for your path. On the qualifier path, usable assets must equal or exceed the entire loan. On the depletion path, usable assets divided by 60 months must carry the new housing payment and your other debts through DTI.
6. Underwrite everything else. Credit, the appraisal, the property, and leverage still get a full review.
Reserves are the money left over after the purchase. On the qualifier path, none are required at or below 75% LTV. Above that, the lender sets them. The depletion path has no published reserve months. Some lenders set their own overlays, so ask early. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
What Counts, and at What Percentage
Each account type counts at a set share of its balance, and the shares differ by path. Keep the two tables separate. Mixing them is the most common way borrowers misjudge their own numbers.
Asset qualifier path: share of balance that counts.
| Asset | Counts at |
|---|---|
| Brokerage accounts | 100% |
| CDs, money market, savings | 100% |
| 401(k) and IRA, under age 59½ | 90% |
| 401(k) and IRA, 59½ or older | 100% |
Accounts combine. On this path, a balance of $330,000 in brokerage plus $200,000 in savings counts in full.
Asset depletion path: share of balance that counts.
| Asset | Counts at |
|---|---|
| Cash accounts, CDs | 100% |
| Securities | 80% |
| Private stock | 75% |
| Retirement accounts (any age) | 70% |
| Real-estate equity | 60% |
Several things do not count on the depletion path: 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 into a seasoned cash balance in a regulated account. The lender then reviews where the money came from.
Seasoning is the time money must sit in an account before it counts. 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 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.
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 assets are the only income source, liquid assets must never fall below $250,000. If asset income only supplements documented income, it can do so up to a 45% DTI, and the minimum-assets rule is waived.
Two Worked Examples
These examples show the arithmetic. The lender’s own calculation governs, and nothing here is an offer.
Qualifier path. Picture a borrower seeking an $800,000 loan on a Hill Country second home. They hold $330,000 in brokerage accounts, which count at 100%, so $330,000. They hold $300,000 in a 401(k) and are under 59½, so it counts at 90%, or $270,000. They hold $200,000 in savings, which counts at 100%, or $200,000. Usable assets total $800,000. That equals the loan, so the borrower is reviewed on assets alone, subject to underwriting.
Depletion path. Now say a borrower holds $1,500,000 in securities and $300,000 in cash. The securities count at 80%, or $1,200,000. The cash counts at 100%, or $300,000. Usable assets are $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income. That income then has to carry the housing payment and other debts through the DTI test.
Notice what happens if the borrower in the first example spends $300,000 of that 401(k) on the down payment. The pool shrinks, and the loan may no longer be covered. Sequence your funds before you pick the loan amount.
Second Home or Investment Property?
This is the fork that shapes the whole file. A second home is one you use yourself. An investment property is one you buy mainly to rent out. The lender decides which it is based on your stated intent and how you will use the home.
The IRS has its own test. Under IRS Publication 527, a dwelling counts as a home when personal use exceeds the greater of 14 days or 10% of the days rented at a fair price, and the University of Illinois Tax School restates that threshold. That is a tax test, not a lending test. A lender does not run that formula to set occupancy. 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.
Rent works differently by classification. On a second-home file, rental income generally does not help you qualify. On an investment-property file, rent may count, though the asset qualifier path is published for principal residences and second homes only. A vacation home you plan to rent out regularly may belong on the depletion path, at the lower investment-property leverage.
Classify the home honestly at application. Misstating occupancy to get better terms is a recognized fraud risk, and the file will be reviewed against your actual plans.
If the Texas property is a pure rental, financing usually moves to a different tool. 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 loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Lendmire’s complete DSCR loans guide explains that route. The asset qualifier is the cleaner fit when the home has no rent history, or when you want no rental-income analysis at all.
Because a vacation home you use yourself is a consumer-purpose loan, standard consumer-mortgage disclosures, including the Loan Estimate and Closing Disclosure under TRID, apply to it. DSCR business-purpose loans are exempt from TRID.
Texas Specifics Worth Knowing
The program figures above do not change by state. Texas matters for what surrounds the loan. Lendmire’s consumer mortgage lending is licensed in 16 states, and Texas is one of them.
Coastal and Hill Country homes tend to carry more insurance questions than a typical suburban house. Condos add association rules and sometimes separate insurance requirements. Budget for those costs, which vary by property and county, and get quotes before you commit to a loan amount.
If you plan to rent the home short-term, Texas charges a 6% state hotel occupancy tax. Airbnb collects it on bookings made through its platform. Direct bookings are separate, and a city or county may add its own layer. Short-term rental rules can vary by city, county, HOA, and property type, so investors should confirm local rules before relying on projected rental income.
What Documents to Gather
Gather your paperwork in the order the lender will ask for it.
1. Statements for every account you want counted: two months each on the qualifier path, or the 120-day-old statement plus a recent one on the depletion path. 2. Proof that you own the accounts and can reach the money. 3. For retirement accounts, evidence of your age and any vesting terms. 4. A paper trail for large deposits, such as a business sale, inheritance, or settlement. 5. A credit report and housing history. 6. The purchase contract and an appraisal of the property.
Nothing about this is “no documentation.” Income paperwork is replaced by asset paperwork, and the lender reviews all of it.
Where the Rule Breaks, and Who Should Skip It
The method fails in predictable places.
- Assets that sit in the wrong place. A large crypto holding or a pile of precious metals does nothing until it becomes a seasoned cash balance in a regulated account.
- Equity used twice. Real-estate equity counts at 60% on the depletion path, but cash-out proceeds never count as qualifying assets.
- Two housing payments. On the depletion path, derived income has to carry the new payment and your current housing costs through DTI. On the qualifier path, no income is documented, so the test is whether the assets cover the loan.
- A thin pool after the down payment. Check the pool after you subtract what you spend, not before.
- Borrowed or pledged funds. These are not published as eligible on either path.
This path is probably wrong for you if your income is strong and documented, because a standard program may serve you with less asset scrutiny. It is also wrong if your wealth is mostly in illiquid holdings. And it is wrong if you want cash out of the vacation home on the qualifier path, where cash-out terms are not published.
| Option | Reviewed on | Best fit |
|---|---|---|
| Asset qualifier | Assets cover the loan | Large balances, no income |
| Asset depletion | Assets become income | Income-light, large portfolio |
| Conventional second home | Documented income (agency rules) | Steady W-2 or tax-return income |
| Bank statement | Deposits as income | Self-employed with strong deposits |
| DSCR | Property rent | Pure rental purchases |
Key Terms Defined
Asset qualifier: A method that qualifies you when your eligible assets equal or exceed the entire loan.
Asset depletion: A method that divides usable assets by 60 months to create monthly qualifying income.
Seasoning: The length of time money must sit in an account before a lender counts it.
Reserves: Money left over after the purchase, kept as a cushion.
LTV: Loan-to-value, the loan amount as a percentage of the property’s value.
Imputed income: Income the lender calculates from your assets instead of reading from a pay stub or tax return.
Frequently Asked Questions
Do I have to sell my investments to buy the home?
No. The accounts stay invested and are not pledged as collateral. The lender counts a share of each balance toward qualifying. Money you spend on the down payment, however, leaves the pool before the count is made.
Do I need income or a DTI ratio?
Not on the qualifier path, where no employment or income is documented and the assets must cover the loan. On the depletion path, your derived income runs through a DTI test, and it can also supplement documented income up to a 45% DTI.
Can I rent the home out?
You can, but it changes the classification. A vacation home with regular rental use may be treated as an investment property. That means lower leverage on the depletion path, and the qualifier path is published only for principal residences and second homes. Tell the lender your real plan up front.
Can I use retirement funds?
Yes, at a reduced share. On the qualifier path, a 401(k) or IRA counts at 90% under 59½ and 100% at 59½ or older. On the depletion path, retirement accounts count at 70% at any age. Terms are subject to underwriting.
Is this the old no-income, no-asset loan?
No. Assets are documented in full on both paths, with seasoning and statement requirements. Credit is reviewed, and the lender still performs a full review of the property and the borrower.
Your 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. You can reach the team at 828-256-2183 or request a quote. Texas buyers with portfolio-heavy balance sheets often find that the pool left after the down payment, not the headline account total, decides which path works.
For current guidelines and terms, see Lendmire’s asset-based mortgage programs page.
Lendmire’s asset-based mortgage in Texas page presents the program for Texas 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
2. University of Illinois Tax School: Tax Rules for Rentals and Vacation Homes
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 Qualifier vs Asset Depletion for a Tech Employee · Asset Qualifier Mortgage vs Bank Statement Mortgage · What Counts as an Asset Statement for a Mortgage?
Guides: Asset-Based Mortgage in Texas
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.