The Quick Read: The first step is choosing which of two asset-based paths fits your balance sheet. On the asset qualifier path, eligible assets must cover the entire loan, and no employment or income is documented. On the asset depletion path, usable assets are divided by 60 months into a qualifying income that carries the payment through a debt-to-income test. Both are available through select programs, subject to underwriting.
- Qualifier path: up to 80% loan-to-value on a purchase, with loans to $4,000,000.
- Depletion path: up to 80% on a second-home purchase, with loans from $125,000 to $3,500,000.
- Seasoning: 60 days on the qualifier path; older statements plus a recent one on the depletion path.
- Occupancy: a vacation home you rent out is an investment property, and that changes the leverage.
Washington buyers often have a lot in their accounts and little documented income. Retirees, business sellers, and people living off a portfolio fit that profile. Across the wholesale network Lendmire works with, the pattern is consistent. The lender asks whether the assets can carry the loan. Your paycheck isn’t the test.
Which Path Fits a Washington Vacation Home Buyer?
Choose the qualifier path if your eligible assets add up to at least the whole loan amount. Choose the depletion path if your assets are large but fall short of the loan, so converting them to monthly income is the better route. A borrower is qualified on one path at a time.
The qualifier path is the simpler one. Eligible assets, after the credit percentages below, must equal or exceed the entire loan. No employment or income is documented. The assets are documented, though. Skipping income documentation never means skipping documentation.
The depletion path works like income. Usable assets are divided by 60 months. The result must carry the full housing payment and your other debts through the debt-to-income test. It suits a borrower whose assets are strong but not big enough to cover the loan outright.
Here is a rough rule of thumb. Buying a cabin on the Olympic Peninsula with a loan smaller than your liquid balances points toward the qualifier path. Buying a waterfront place near the San Juan Islands with a larger loan, where your portfolio is big but not that big, points toward depletion. Both paths are subject to underwriting, and the lender’s own calculation governs.
What Is an Asset Qualifier Mortgage, in Plain Terms?
An asset qualifier mortgage lets verified assets stand in for income. “Asset qualifier,” “asset depletion,” and “asset-based mortgage” get used loosely as if they were one product. In practice they work differently, so this article names the path every time a figure appears.
The legal footing is simple. Under the federal ability-to-repay rule, a lender may base its decision on income, on assets other than the home itself, or on both. The CFPB’s ability-to-repay regulation says so directly. Asset-based loans are still regulated and still underwritten. They are not a shortcut around review.
This is also a consumer mortgage. It is not the same as a DSCR loan, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. If you plan to rent the home heavily, that other product may fit better, and the occupancy section below explains when.
How Do Assets Count on Each Path?
Each path gives a different percentage of credit to each asset type, so never blend the two tables. Figures below are ceilings and floors through select programs, subject to underwriting. They are not offers.
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Brokerage accounts | 100% | Securities 80% |
| Savings / money market | 100% | Cash accounts 100% |
| Certificates of deposit | 100% | 100% |
| 401(k) / IRA | 90% under 59½; 100% at 59½+ | 70% at any age |
| Private stock | Not published | 75% |
| Real-estate equity | Not published | 60% |
Accounts combine. Some assets don’t count at all 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 converting them to a seasoned cash balance in a regulated account. The lender reviews the source of that cash.
What Does the Math Look Like?
The arithmetic is simple. Treat these as illustrations only. Start with the qualifier path.
Say the loan is $800,000. You hold $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). Usable assets come to $800,000. That covers the loan, so the file can qualify on assets alone, subject to underwriting.
Now the depletion path. Picture a retiree with $1,500,000 in securities, where 80% counts, so $1,200,000. Add $300,000 in cash, which counts at 100%. Usable assets are $1,500,000. Divide by 60 months and you get $25,000 of monthly qualifying income. That income then carries the housing payment, taxes, insurance, any HOA dues, and other debts through the debt-to-income test.
Two points trip people up. Assets used to qualify can’t also serve as the down payment or reserves in the same count. And the depletion path requires qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance. When asset depletion is the only income source, it also requires at least $250,000 liquid. Asset-derived income can also supplement documented income up to a 45% debt-to-income ratio, and the minimum-assets rule is waived in that case.
Does a Washington Vacation Home Count as a Second Home?
It counts as a second home only if you will use it as one. If you plan to rent it out, it is an investment property, and that changes the leverage. This is a common trap for vacation-home buyers.
Leverage shifts with occupancy on the depletion path:
| Occupancy | Purchase / rate-and-term | Cash-out |
|---|---|---|
| Principal residence or second home | Up to 80% | Up to 60% |
| Investment property | Up to 65% | Up to 60% |
Cash-out proceeds never count as qualifying assets. On the qualifier path, leverage is up to 80% on a purchase and 75% on a refinance for a principal residence or second home. Whether cash-out is allowed on that path, and at what leverage, is set by the lender and isn’t published.
Occupancy is a signed representation. Declaring a home as a second home while intending to rent it is a misrepresentation, so match your declaration to your real plan. Part-time rental can be a gray zone. The honest move is to tell your broker the plan up front, so the file lands in the right category.
The tax rules are a separate matter. The IRS looks at personal-use days against the greater of 14 days or 10% of days rented, as laid out in IRS Publication 527. A University of Illinois Tax School explainer covers the same threshold. That test governs tax treatment, not lender occupancy. Don’t assume the two share a line. Tax treatment varies; consult a qualified professional.
What Credit, Seasoning, and Documents Are Required?
Plan for credit, seasoning, and statements before you write an offer. The qualifier path sets a 600 minimum score. The depletion path follows the lender’s score and loan-amount matrix. A first-time investor on the depletion path needs 700.
Housing history is typically 0x30x12, and one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. A housing event needs 4 years of seasoning on the depletion path. Nothing here promises approval.
Seasoning differs by path:
- Qualifier path: 60 days of seasoning and two months of statements for each qualifying account.
- Depletion path: statements at least 120 days old at application, plus the most recent statement within 45 days. Sale-of-business, inheritance, and legal-settlement funds are excused from that seasoning.
Reserves also differ. On the qualifier path, none are required at or below 75% loan-to-value; above that, the lender sets them. The depletion path has no published reserve months.
Practical prep matters. Don’t shuffle money between accounts right before applying, because large transfers invite questions. Keep statements complete, including every page. Gather the sale paperwork for any business, inheritance, or settlement funds. In our experience placing these files, sourcing questions delay more files than the math does.
Washington Vacation Home Considerations
Washington properties raise practical questions the loan program can’t answer for you. Waterfront and cabin homes, rural parcels, and condos in resort areas each come with their own appraisal and insurance questions. HOA rules or condo rental restrictions can limit how you use the home. Short-term rental rules can vary by city, county, HOA, and property type, so confirm local rules before relying on projected rental income.
Taxes, insurance, and HOA dues all feed the housing payment. On the depletion path, those costs run through the debt-to-income test.
The program figures above don’t change by state. Lendmire’s consumer mortgage lending is licensed in 16 states, and Washington is one of them. A Washington buyer can work with the same parameters described here, subject to underwriting.
Asset Qualifier vs. Other Ways to Pay for a Vacation Home
The right choice depends on your balance sheet and your plan for the property. These are general comparisons, and each describes how those products typically work, not this program.
| Option | Best for | Trade-off |
|---|---|---|
| Asset qualifier | Assets cover the whole loan | Assets are tied up in qualifying |
| Asset depletion | Large assets, little documented income | Haircuts shrink usable assets |
| Conventional second-home loan | Steady W-2 or tax-return income | Income documentation required |
| HELOC on a primary home | Equity and a clean income file | Puts the primary home at risk |
| Bank statement loan | Self-employed, deposits show income | Built for income, not asset-rich retirees |
| DSCR loan | Property rented, rent covers payment | Investment occupancy only |
If you will rent the home and rents are strong, DSCR is business-purpose financing. Programs below 1.00 coverage are available through select lenders in the network, though leverage and terms adjust. Lendmire’s complete DSCR loans guide covers that path.
Risks and Trade-Offs
Assets used to qualify stay in your name. The lender doesn’t force you to liquidate them. But they do sit in the file, and the haircuts shrink what counts. Retirement accounts at 70% on the depletion path lose real qualifying power. A market drop before closing could also lower the usable total.
Liquidity is the other cost. Money used to qualify can’t be counted twice, so a vacation home bought this way leaves a thinner cushion. Run your own post-closing liquidity check before you commit. If the cushion looks thin, a smaller loan or lower leverage may be the smarter move.
For related reading, Lendmire’s guide Do You Have to Liquidate Assets to Reserve an Asset Qualifier Mortgage? covers the liquidation question.
Key Terms Defined
Asset qualifier path: qualifying on assets alone, where usable assets cover the entire loan.
Asset depletion path: dividing usable assets by 60 months to create a monthly qualifying income.
Haircut: the share of an asset’s balance that does not count toward qualifying.
Seasoning: the length of time funds have sat in an account before you apply.
Debt-to-income ratio: monthly debts, including the new housing payment, divided by monthly qualifying income.
Frequently Asked Questions
Can I use retirement funds?
Yes, on both paths. On the qualifier path, 401(k) and IRA balances count at 90% under age 59½ and 100% at 59½ or older. On the depletion path they count at 70% at any age. You are not required to withdraw them.
Do I have to sell my investments?
No. The assets are used to show you can support the loan. Money you put toward the down payment and closing costs does leave your accounts, of course, and that money can’t also count as qualifying assets.
Can I rent the home out?
You can, but it changes the category. A home you will rent is an investment property, with lower leverage on the depletion path (65% on a purchase). State your plan honestly so the file is classified correctly.
Do I need employment?
Not on the qualifier path, where no employment or income is documented. On the depletion path, asset-derived income can stand alone or supplement documented income, subject to the program’s tests.
Is this only for Washington residents?
No. The program figures are the same regardless of state. Lendmire’s consumer lending is licensed in 16 states, including Washington, so it makes sense to confirm availability for your situation.
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. Programs are placed through select lenders in its wholesale network, and every file is underwritten individually.
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 – 12 CFR §1026.43 (ability-to-repay rule)
3. 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 Mortgage vs Bank Statement Mortgage · What Counts as an Asset Statement for a Mortgage? · Asset Qualifier vs Asset Depletion for a Tech Employee
Guides: Asset-Based Mortgage in Washington
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.