The Quick Read: You qualify on your balance sheet instead of your paycheck. On the asset qualifier path, your eligible savings and investments must cover the entire loan, and no employment or income is documented. Every account is still verified with statements, through select programs and subject to underwriting.
- Two paths exist. Assets cover the loan outright (asset qualifier), or assets become monthly income (asset depletion). You are qualified on one path at a time.
- Not every dollar counts fully. Retirement balances and securities are discounted, and the discount depends on the path.
- Leverage differs by path and occupancy. The qualifier path allows up to 80% on a purchase. The depletion path allows 80% on a second-home purchase and less on an investment property.
- You keep your accounts. The lender measures them. You do not sell them to qualify.
- Occupancy decides the category. A vacation home you also rent out may be treated as an investment property, which narrows your options.
What Is an Asset Qualifier Mortgage?
An asset qualifier mortgage approves the loan based on what you own, not what you earn. If your eligible assets, after the credit percentages below, equal or exceed the whole loan amount, you can qualify on assets alone. No traditional personal-income documentation, pay stubs or employment verification are involved.
The names are not standardized. You will see asset qualifier, asset depletion, asset utilization and asset-based used for overlapping ideas. Across the wholesale network where Lendmire places these files, the two real mechanics are different products:
- Asset qualifier: assets are measured directly against the loan.
- Asset depletion: assets are converted into a monthly qualifying income, then run through a debt-to-income test.
Lendmire is a broker. It arranges these consumer mortgages through select lenders in its network, including for Colorado borrowers. Each lender underwrites its own file, and the figures here are ceilings and floors, never offers.
Key Terms Defined
Asset qualifier path: the route where eligible assets must equal or exceed the entire loan amount, with no income documented.
Asset depletion path: the route where usable assets are divided by 60 months to create a qualifying monthly income.
Debt-to-income (DTI) ratio: your monthly debts, including the new housing payment, compared with your monthly income.
Seasoning: how long funds have sat in your accounts before the lender will count them.
Usable assets: your balances after the credit percentage each asset type earns.
Second home: a one-unit property you occupy part of the year, suitable for year-round use, under your control. Lenders define it differently, so confirm the definition with the lender.
Which Path Fits You?
Start with your situation, because the path drives everything else.
The qualifier path fits you if your balances are large and you want the loan covered outright. Think of a retiree, someone who sold a business, or an heir with an inheritance. Your assets must reach the full loan amount, so this path suits borrowers with substantial liquid wealth.
The depletion path fits you if you want assets to act as income. That works well if you have a smaller loan, or if your documented income is real but not enough alone. Asset-derived income can supplement documented income up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived.
Neither path means selling your portfolio. The accounts stay yours.
How Underwriting Treats Your Assets, Step by Step
1. Pick the occupancy category. A second home or an investment property. This choice sets which path and leverage apply.
2. Inventory your accounts. List brokerage, savings, money market, CDs and retirement accounts. Note who owns each one.
3. Check seasoning. The qualifier path wants 60 days of seasoning and two months of statements for each qualifying account. The depletion path wants statements at least 120 days old at application, plus the most recent statement within 45 days.
4. Apply the credit percentages. Each asset type counts at a set share of its balance (tables below).
5. Subtract what leaves the accounts. Cash for your down payment and closing costs cannot also count toward the loan.
6. Measure or convert. On the qualifier path, usable assets are compared with the loan. On the depletion path, usable assets are divided by 60 months.
7. Underwrite the rest. Credit, the appraisal, and the property itself still get reviewed.
The lender’s own calculation governs every one of these steps.
What Counts, and at What Percentage?
Asset qualifier path (purchases and refinances on a principal residence or second home, subject to underwriting):
| Asset | Share that counts |
|---|---|
| Brokerage accounts | 100% |
| Certificates of deposit | 100% |
| Money market | 100% |
| Savings | 100% |
| 401(k) or IRA, under 59½ | 90% |
| 401(k) or IRA, 59½ or older | 100% |
Accounts combine, so several balances can add up to the loan.
Asset depletion path (principal residence, second home or investment property, through select programs):
| Asset | Share that counts |
|---|---|
| Cash accounts | 100% |
| Certificates of deposit | 100% |
| Securities | 80% |
| Private stock | 75% |
| Retirement accounts, any age | 70% |
| Real-estate equity | 60% |
Some assets 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 and pledged or borrowed funds 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.
Two Worked Examples
These are illustrations only. The lender’s own calculation governs.
Qualifier path. Say you want an $800,000 loan. You hold $330,000 in brokerage accounts (100% counts, so $330,000). You hold $300,000 in a 401(k) and you are under 59½ (90% counts, so $270,000). You hold $200,000 in savings (100%, so $200,000). Usable assets total $800,000. That equals the loan, so the file is reviewed on assets alone, subject to underwriting. The cash for your down payment and closing costs would need to sit outside those balances.
Depletion path. Say you hold $1,500,000 in securities (80% counts, so $1,200,000) plus $300,000 in cash (100%). Usable assets are $1,500,000. Divide by 60 months and you get $25,000 of monthly qualifying income. That income must then carry the new housing payment and your other debts through the debt-to-income test.
Notice what changed. The same balances can look strong on one path and thin on the other, because the percentages differ and the loan sizing rule differs.
Program Parameters at a Glance
These are typical network ranges, through select programs and subject to underwriting.
- Qualifier path leverage: up to 80% on a purchase and 75% on a refinance, on a principal residence or second home. Whether cash-out is allowed on this path is set by the individual lender.
- Qualifier path loan size: up to $4,000,000.
- Depletion path leverage: up to 80% on a purchase or rate-and-term refinance and 60% on a cash-out refinance, on a principal residence or second home. On an investment property, up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out.
- Depletion path loan size: $125,000 to $3,500,000. Cash-out proceeds never count as qualifying assets.
- Credit: the qualifier path has a 600 minimum score. The depletion path follows the lender’s matrix, and a first-time investor needs 700. A housing history of 0x30x12 is standard, and one late payment in twelve months is considered case by case.
- Depletion minimums: qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan, and never below $250,000 liquid when depletion is your only income source.
- Reserves: none required at or below 75% loan-to-value on the qualifier path. Above that, the lender sets them.
Where the Vacation-Home Rules Bite
The general rule is simple: a second home gets the best terms. The edge cases decide whether your Colorado cabin or condo actually counts as one.
Lender definitions vary, but common traits include a single unit, suitability for year-round use, your exclusive control, and personal occupancy for part of the year. A timeshare or a unit run under a management program that controls your occupancy often fails the test.
Intended rental use changes the picture. If you plan to rent the home heavily, the lender may classify it as an investment property. That category is not available on the qualifier path. On the depletion path, investment property carries lower leverage: 65% on a purchase and 60% on a cash-out. A property bought purely as a rental usually fits business-purpose DSCR financing better. DSCR qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
Mountain markets add their own wrinkles. Condo and condo-hotel eligibility, HOA rules, seasonal road access, and appraisals in thin markets can all affect a file. 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.
Here is a quiet trap. Many borrowers describe a property as a second home when they mean a part-time rental. Lenders often ask you to sign an occupancy certification. Answer it honestly, because the category follows your real plan.
How It Compares With Other Options
| Option | Reviewed on | Best fit |
|---|---|---|
| Asset qualifier | Assets vs. loan | Large balances, no income documented |
| Asset depletion | Assets as income | Smaller loan or supplemental income |
| Bank statement | Deposits as income | Self-employed with strong deposits |
| DSCR | Property rental income | Pure rental purchase |
| Conventional full-doc | Personal income, pay records | Steady, documented income |
If you can document income cleanly, conventional full-doc financing may still serve you well. The asset route earns its place when income is lumpy, heavily written off, retired or deliberately low.
What the Rules Actually Require
Common misconceptions cluster here, so settle them first.
Myth: no documentation. It is documented. Under the federal ability-to-repay rule, a lender may rest its decision on income, on assets other than the dwelling, or on both, per Regulation Z § 1026.43. The lender must verify what it relies on. The CFPB compliance guide lists the underwriting factors a lender must weigh and requires that verification. That is why you provide statements even with no income documented.
Myth: you must liquidate. You do not. The lender uses balances for calculation only.
Myth: every asset loan works alike. They do not. The divisor, eligible assets and allowed property types differ by program.
Risks and Trade-Offs
Your assets are tied up in qualification. Money counted toward the loan cannot also pay for renovations, furniture or a rainy-day fund.
Markets move. A drop in securities balances between application and funding can shrink usable assets. On the depletion path, securities count at 80%, so a 20% discount is already built in, but that is not a shield against a bigger drop. Keep a cushion above the minimum.
Consider the alternative honestly. Buying with cash and refinancing later is one option for someone with enough liquidity. Financing keeps your portfolio invested and working. Which is better depends on your investment returns, your comfort with debt, and your goals. This one is a genuine toss-up.
Tax treatment varies; consult a qualified professional.
A practitioner note: the files that stall are rarely about the asset totals. They stall on statements that do not match, deposits nobody can explain, and accounts in a spouse’s name. Gather clean statements for every qualifying account before you shop.
Frequently Asked Questions
Do I have to sell my investments to qualify?
No. The lender uses your balances to calculate qualifying assets or income, and the accounts remain yours. Some funds leave your accounts for the down payment and closing costs, but the rest stay invested, subject to underwriting.
Can I rent out a Colorado vacation home bought with this loan?
It depends on how much and how the lender classifies the property. A second home typically involves personal occupancy for part of the year. Heavier rental use may push it into investment property, which is available only on the depletion path at lower leverage. A pure rental usually fits DSCR financing better.
Is an asset qualifier the same as asset depletion?
No. The qualifier path measures eligible assets against the whole loan and documents no income. The depletion path divides usable assets by 60 months into qualifying income and runs the debt-to-income test.
What if my portfolio drops before the loan funds?
Usable assets are recalculated from your current statements, so a significant drop can reduce what counts. That is why a cushion above the minimum matters. The lender’s calculation governs.
Can I count cryptocurrency or business accounts?
Not directly. These are not published as eligible on either path. The documented route is converting them into a seasoned cash balance in a regulated account, with the source reviewed by the lender.
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. Colorado is one of the 16 states where Lendmire arranges consumer mortgages, and any placement is not a commitment to lend.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging bank statement and other alternative-documentation mortgages (P&L-only, 1099-only and asset-based paths) through a wholesale lending network. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB Regulation Z § 1026.43
2. CFPB Ability-to-Repay and Qualified Mortgage Compliance Guide
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 Indiana Vacation Home With an Asset Qualifier Mortgage · How to Document a Colorado Asset Qualifier Mortgage Without an Employer · Pledged Asset Line vs Asset Qualifier Mortgage for a Montana Home Purchase
Guides: Asset-Based Mortgage in Colorado
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.