The Quick Read: Yes, in many cases, because a lender can count your IRA balance as proof you can repay the loan without you withdrawing a dollar, as long as the account is documented, the loan fits one of two asset-based paths, and the file clears underwriting. The lender counts the IRA. It never takes a lien on it. Retirement balances usually count at a discount, and the discount depends on the path and your age.
- On the asset qualifier path, a 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older, subject to underwriting.
- On the asset depletion path, retirement accounts count at 70% at any age, then the total is divided by 60 months to create qualifying income.
- The asset qualifier path documents no traditional personal-income documentation, pay stubs or employment verification. The assets are still fully documented with statements.
- Colorado is one of the 16 states where Lendmire arranges consumer mortgages, and the program figures do not change by state.
What This Article Covers (and What It Doesn’t)
Search terms around this topic get tangled, so here is the scope. This article covers using an IRA balance to qualify for a mortgage on a home you will buy or refinance. It does not cover borrowing from your IRA. It does not cover a self-directed IRA buying real estate inside the account. Those are different tools with different rules.
Your situation is probably this: the balance is large, your documented income is small, and you do not want to cash anything out. Retirees, business sellers, people who received an inheritance or settlement, and early-retired professionals fit the picture. Ordinary income paperwork makes these borrowers look weaker than they are.
How Can a Lender Count an IRA You Haven’t Touched?
A lender counts an IRA the same way it counts any other evidence of repayment ability: it reads the statement. Using a balance in an underwriting calculation is not a distribution. You are showing the money exists. You are not spending it.
This approach sits in the non-QM world, meaning loans that follow their own documentation rules rather than the standard qualified-mortgage box. Bankrate’s non-QM guide explains that counting assets as income, often called asset depletion, is not allowed in a qualified mortgage but may be allowed in non-QM. NerdWallet’s non-QM explainer lists asset qualifiers among the alternative documentation methods non-QM borrowers can use.
Across the wholesale network Lendmire places files with, asset-based mortgages come in two flavors. Which one fits you decides almost everything else.
Two Paths, One at a Time
You qualify on one path at a time. You cannot blend them. The first path asks whether your eligible assets cover the entire loan. The second turns your assets into monthly income and tests that income against your payments.
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| Core test | Assets cover the whole loan | Assets become monthly income |
| Income documented | None | Derived income, run through DTI |
| Property types | Principal residence, second home | Also investment property |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Credit | 600 minimum | Lender’s matrix |
Every figure here is a ceiling or floor under select programs, subject to underwriting. None is an offer. Debt-to-income, or DTI, is the share of your monthly income that goes to debt payments, housing included.
Path One: Your Assets Cover the Whole Loan
The asset qualifier path is the simplest idea in the program. Eligible assets, after the credit percentages below, must equal or exceed the entire loan amount. If they do, no employment or income is documented. That means no traditional personal-income documentation, pay stubs or employment verification.
Here is how each asset counts toward that total:
- 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.
- A 401(k) or IRA counts at 100% once you are 59½ or older.
- Accounts combine, so you can stack several.
Leverage on this path tops out at 80% loan-to-value on a purchase and 75% on a refinance, both on a principal residence or second home. Loan-to-value, or LTV, is the loan divided by the property’s value. Reserves are not required at or below 75% LTV. Above that, the lender sets them. Credit starts at a 600 minimum score. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Run an illustration. Say you want an $800,000 loan. You hold $330,000 in brokerage accounts (counts at 100%, so $330,000), $300,000 in a 401(k) while under 59½ (counts at 90%, so $270,000), and $200,000 in savings (counts at 100%, so $200,000). Usable assets total $800,000. That covers the loan on assets alone, subject to underwriting. The lender’s own calculation governs the real file.
Notice the IRA share took a 10% haircut and still did real work. You did not touch it.
Seasoning matters here. Seasoning is how long money has sat in an account. This path wants 60 days of seasoning and two months of statements for each qualifying account. Money that appeared last week gets questions.
Path Two: Your Assets Become Income
The asset depletion path converts assets into a monthly qualifying income. The lender takes your usable assets, after haircuts, and divides by 60 months. That income must then carry the full housing payment and your other debts through the DTI test.
The haircuts are steeper. Cash accounts and certificates of deposit count at 100%. Securities count at 80%, private stock at 75%, real-estate equity at 60%. Retirement accounts count at 70% at any age. Put plainly, every dollar in your IRA counts as 70 cents.
Illustrate it with one shape. Suppose you hold $1,500,000 in securities (80%, so $1,200,000) plus $300,000 in cash (100%, so $300,000). Usable assets are $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income. That figure then has to carry the housing payment and other debts through the DTI test, subject to underwriting.
This path has its own guardrails:
- 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 in liquid assets.
- Asset-derived income can supplement documented income, such as a pension or Social Security, up to a 45% DTI. When it supplements, the minimum-assets rule is waived.
- Statements must be at least 120 days old at application, plus one within 45 days.
- A first-time investor on this path needs a 700 credit score. Otherwise the lender’s matrix applies. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Leverage on this path is lower than the first path. On a principal residence or second home, it goes up to 80% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. On an investment property, it is 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Cash-out proceeds never count as qualifying assets.
Does Age 59½ Matter?
Age matters on the asset qualifier path and does not matter on the asset depletion path. On the first, an IRA counts at 90% before 59½ and 100% after. On the second, the 70% haircut applies at any age.
Why the difference? The 59½ line is where early-withdrawal penalties usually fall away. Lenders treat younger money as a bit less accessible. That is the reasoning, and it explains why a 55-year-old and a 62-year-old with identical balances can see different totals on the first path.
Age does not force a withdrawal on anyone. It only changes how much of the balance counts.
What a Colorado Buyer Should Know
Colorado is among the 16 states where Lendmire arranges consumer mortgages. The program figures above are the same here as anywhere else in that footprint. Prices and local costs differ by county, but the percentages and path rules do not.
Occupancy decides your path options. For a principal residence or a second home, such as a mountain or resort-area property, you can use either path. For a pure investment property, only the asset depletion path applies, at the lower 65% and 60% leverage limits. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Relocating from another state? A move does not change the program rules. Gather statements from wherever your accounts are held.
Rental purchase? Consider a different tool first. Rental financing built for non-owner-occupied investment properties qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Bankrate notes that both DSCR loans and asset depletion loans often suit real estate investors. DSCR is the debt service coverage ratio, meaning rent divided by the property’s monthly obligation. If the rent carries the loan, DSCR generally leaves your IRA out of the conversation. If the rent is thin and your assets are deep, the asset-based mortgage program can carry the file instead. Lendmire’s asset-based mortgage program page lays out the structure.
Why You Can’t Pledge the IRA
Here is the line you cannot cross. You may show an IRA. You may not pledge it. IRS Publication 590-B lists using an IRA as security for a loan as a prohibited transaction. If you pledge part of the account, that part is treated as a distribution.
The same publication says a prohibited transaction by the owner generally ends the account’s IRA status as of January 1 of that year. Separate IRAs are treated separately, so only the one that took part is affected.
This is why a properly structured asset-based mortgage never asks you to assign the account. The IRA stays with its custodian. The lender reads statements and moves on. Tax treatment varies; consult a qualified professional before relying on any of this.
Which Accounts Count, and How Much?
Assets do not all count the same. This table sets the two paths side by side, each column strictly its own.
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Cash, savings, money market, CDs | 100% | 100% (cash, CDs) |
| Brokerage / securities | 100% | 80% |
| Retirement (IRA, 401(k)) | 90% under 59½, 100% after | 70% at any age |
| Real-estate equity | Not published | 60% |
Some assets sit outside both tables. Cryptocurrency, precious metals, collectibles and pledged or borrowed funds are not published as eligible on either path. Neither is a self-directed IRA holding real estate or an LLC interest. IRS Publication 590-B cautions that the prohibited-transaction risk can be higher when an IRA holds assets that are not publicly traded or that the owner controls directly.
The documented workaround is plain. Convert the asset to a seasoned cash balance in a regulated account, and the lender reviews the source. On the depletion path, these are also not eligible: 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.
Roth and traditional IRAs follow the same percentages. The haircut stands in for the tax and penalty you would face on a liquidation, which is why account type does not change the math.
Qualifying Money Versus Closing Money
Proving you can repay is one job. Having cash to close is another. An IRA balance can serve the first job without a withdrawal. The down payment, closing costs and any reserves still need a source.
If that source is also one of your qualifying accounts, the lender’s own calculation governs how the money is treated. Do not assume the same dollar counts twice. Ask early which accounts are earmarked for what.
Selling a business, receiving an inheritance or settling a legal claim raises a seasoning question. On the depletion path, those funds are excused from the 120-day statement-age rule. The lender still reviews where the money came from.
What to Pull Before You Apply
A tidy file does half the work. Gather these:
- Statements for every qualifying account. Two months each on the qualifier path.
- On the depletion path, a statement at least 120 days old plus the most recent one within 45 days.
- Proof the account is in your name and that you can access it.
- Documentation of any large deposit, including its source.
- Photo ID, plus age verification if your age affects the percentage.
- For rollovers or inherited funds, the paperwork that shows where the money landed.
Statements are the whole story here. That is why calling this program no documentation would be wrong. Income paperwork gets lighter. Asset paperwork gets heavier.
When This Is a Poor Fit
Asset-based qualifying does not suit everyone. Run through these honestly.
Thin balances. The depletion path needs qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan. A smaller portfolio may not clear it.
Volatile balances. A stock-heavy IRA can swing between application and closing. If the balance drops, your usable total drops with it. The haircut hits a smaller number.
Strong rental income. If the property’s rent carries the payment, a rental-focused loan can leave your IRA alone entirely. That is a cleaner path.
Heavy cash needs. An IRA balance cannot fund your down payment unless you take a distribution. If you must withdraw anyway, ask a tax professional what that costs before comparing programs.
It is a genuine judgment call. Some borrowers would rather take a modest distribution and keep the file simple. Others hold firm on the IRA. The numbers decide, not the principle.
Key Terms Defined
Asset qualifier: A path where your eligible assets, after credit percentages, must cover the entire loan amount.
Asset depletion: A path where usable assets are divided by 60 months to create monthly qualifying income.
Haircut: The share of an account’s balance a lender does not count, often because of access, volatility or tax exposure.
Seasoning: The length of time money has sat in an account before a lender will count it.
Prohibited transaction: An IRA action the tax rules forbid, such as using the account as loan security.
Frequently Asked Questions
Do I have to be retired to use my IRA this way?
No. Retirement is not a requirement on either path. The approach tends to fit retirees and asset-rich, income-light households, but a working borrower with a large balance can use it, subject to underwriting and the lender’s credit matrix.
Will the lender make me cash out the IRA?
No. The lender reads the balance and applies a percentage. Nothing is liquidated, and the account is never pledged. If you choose to withdraw money for a down payment, that is a separate decision with separate consequences.
Is there a minimum age?
No minimum age is published. Age changes the credit percentage on the asset qualifier path: 90% under 59½, 100% at 59½ or older. On the asset depletion path, retirement accounts count at 70% regardless of age.
What if my balance drops before closing?
A lower balance means a lower usable total, and the lender’s calculation uses what the statements show. If a drop pushes you below the asset requirement, the file may need a different structure or more assets. Stable accounts make this less of a risk.
Can I use an IRA on an investment property?
Only through the asset depletion path, at up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out refinance for investment property. The asset qualifier path covers principal residences and second homes only. Business-purpose rental financing is DSCR, which looks at the property’s income instead.
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. Programs change, every file is individually underwritten, and nothing here is a commitment to lend. Reach the team at 828-256-2183.
An IRA you never touch can still carry a Colorado purchase, so long as you show it and never pledge it.
Lendmire’s asset-based mortgage in Colorado page presents the program for Colorado 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.
Investors who want the broader program framework can review how DSCR loans work.
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References
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can a Michigan Buyer Qualify for a Mortgage on IRA Assets Without Withdrawals? · Can a New Mexico Trust Beneficiary Qualify for a Mortgage on Trust Assets? · Can You Qualify for a Mortgage If Your Income Is in a Foreign Currency?
Guides: Asset-Based Mortgage in Colorado
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.