The Quick Read: Yes, select asset-based mortgage programs can qualify you for a Colorado second home on your account balances rather than a paycheck, either by letting eligible assets cover the entire loan or by converting them into qualifying income, subject to underwriting, credit review and the occupancy being genuinely personal use. The file does not ask for pay stubs, traditional personal-income documentation or employment verification. Your assets are still documented with statements, and the loan is fully underwritten.
- Two paths exist. On the asset qualifier path, eligible assets must equal or exceed the whole loan. On the asset depletion path, usable assets divided by 60 months become qualifying income.
- It fits income-light, asset-rich borrowers. Think retirees, business sellers, inheritance or settlement recipients, and households living on a portfolio.
- Leverage on a second home runs up to 80% on a purchase on both paths, subject to underwriting.
- A rent-based loan is the wrong tool. A rental-income (DSCR) loan is built for investment property, not a house you plan to use yourself.
- Colorado is covered. Lendmire’s consumer mortgage licensing includes Colorado, and the program figures below do not change by state.
What Does “On Assets” Actually Mean?
Lenders use the phrase three different ways, and mixing them up causes most of the confusion. Assets can be the source of your qualifying income, the money for your down payment, or the collateral behind the loan. An asset-based mortgage uses assets for the first purpose, and it still needs the second.
Here is how the three meanings differ:
- Assets as qualifying income. The lender counts your balances to prove you can repay, in place of traditional personal-income documentation and pay stubs. This is what the asset-based mortgage program does.
- Assets as a down payment. Cash for the purchase comes out of your accounts at closing. Every mortgage needs this, whatever the qualification method.
- Assets as collateral. The house secures the loan, as with any mortgage. Your brokerage account does not.
One more point surprises people. You do not sell or withdraw anything to qualify. The balances stay in your accounts and serve as evidence of repayment ability. Money committed to the down payment and closing is subtracted first, because it cannot be counted twice.
Which of the Two Asset Paths Fits You?
Pick the qualifier path if your liquid balances can cover the entire loan. Pick the depletion path if they cannot, but they are large enough to produce meaningful monthly income once spread over 60 months. A borrower is qualified on one path at a time, never a blend of both.
Across the wholesale network Lendmire works with, select lenders offer both paths for a principal residence or a second home. Here is how they compare on a second home:
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| How assets work | Cover the entire loan | Become monthly income (÷ 60) |
| Income documented | None | Derived from assets, tested by DTI |
| Leverage, purchase | Up to 80% | Up to 80% |
| Leverage, refinance | Up to 75% | 80% rate-and-term; 60% cash-out |
| Loan size | Up to $4,000,000 | $125,000 to $3,500,000 |
| Credit score | 600 minimum | Lender’s matrix |
| Statements | 60 days seasoning, two months each | 120 days old, plus one within 45 days |
These are ceilings and floors across select programs, not offers. Each file is underwritten individually, and programs change.
The depletion path adds a minimum-assets test. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When assets are your only income source, liquid assets must also be at least $250,000. If you have some documented income, the asset-derived income can supplement it, up to a 45% debt-to-income ratio. In that case the minimum-assets rule is waived.
Reserves differ by path. The qualifier path requires none at or below 75% loan-to-value, and the lender sets them above that. The depletion path has no published reserve months.
Credit still matters on both paths. Housing history is expected to be clean at 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 prior housing event needs four years of seasoning.
How Do the Numbers Work?
Both paths use simple arithmetic. The lender’s own calculation governs, so treat these examples as illustrations only.
Qualifier path example
Say you want an $800,000 loan. You hold $330,000 in brokerage accounts, $300,000 in a 401(k) and $200,000 in savings, and you are under 59½. Brokerage counts at 100%, which is $330,000. The 401(k) counts at 90%, which is $270,000. Savings counts at 100%, which is $200,000. Together that is $800,000 of usable assets, which matches the loan. The file is reviewed on assets alone, subject to underwriting.
Now suppose you are 59½ or older. The same 401(k) counts at 100%, which gives you more room.
Depletion path example
Say you hold $1,500,000 in securities and $300,000 in cash. Securities count at 80%, which is $1,200,000. Cash counts at 100%, which is $300,000. Usable assets total $1,500,000. Divide by 60 months and you get $25,000 of monthly qualifying income. That income must then carry the housing payment and your other debts through the debt-to-income test.
This is why the path matters. The qualifier path asks whether your assets cover the loan. The depletion path asks whether the income your assets produce can carry the payment.
Which Assets Count, and Which Do Not?
Balances in regulated accounts count, at a percentage that depends on the path. Business accounts, borrowed money and the equity in the house you are buying generally do not. The percentages differ by path, so the two are shown separately here.
Asset qualifier path: share of the balance that counts.
| Asset | Counts at |
|---|---|
| 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 you can stack several to reach the loan amount.
Asset depletion path: share of the balance that counts.
| Asset | Counts at |
|---|---|
| Cash accounts | 100% |
| Certificates of deposit | 100% |
| Securities | 80% |
| Private stock | 75% |
| Retirement accounts (any age) | 70% |
| Real-estate equity | 60% |
Several holdings are not eligible 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, business accounts beyond your ownership share, 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. Equity in the home you are buying cannot be used to qualify.
Seasoning matters too. On the qualifier path, assets need 60 days of seasoning and two months of statements per 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 a business sale, inheritance or legal settlement are excused from that seasoning on the depletion path.
Is a Vacation Home Really a Second Home? Occupancy Decides.
Occupancy is the gate. If you will personally use the house, it is a second home, and an asset-based mortgage is a fitting tool. If you are buying it mainly to rent out, it is an investment property, and qualification moves to the property’s rent.
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.
A federal line backs this up. Under Regulation Z’s business-purpose provision, a rental counts as non-owner-occupied only if the owner does not expect to occupy it for more than 14 days in the coming year. In practice, a ski condo you use three weeks each winter is a second home, not a DSCR file.
Mixed use is the gray zone, and it is where borrowers get into trouble. Occupancy cannot be misstated on an application. Second-home terms are usually more generous than investment-property terms, so mislabeling is the main risk in this corner of the market.
Asset-based programs on investment property are narrower. Within the program parameters here, investment property is available only on the depletion path. It runs up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out, and a first-time investor needs a 700 credit score. A buyer who wants a pure rental usually moves to DSCR instead.
If you already own a former second home that has become a rental, the label changes to investment property. Qualification then follows the property’s rent, and rental appraisal forms (Form 1007 for one unit, Form 1025 for two to four units) come into play.
Rent also generally does not help you qualify on a second-home loan. A second-home file is reviewed on your personal profile, and asset-based loans follow the same personal-use logic.
What Do You Still Have to Document?
Skipping traditional personal-income documentation does not mean skipping paperwork. The lender verifies the assets it relies on, and the review covers much more than your balances.
On the assets side, you provide statements for every qualifying account. The CFPB’s small entity compliance guide says lenders have wide latitude in choosing verification sources, so long as the source is reasonably reliable and comes from a third party. Account statements fit that standard.
The rest of the file works like any other mortgage:
- Credit must meet the program’s minimum and housing-history standard.
- An appraisal is ordered on the property.
- Occupancy is certified. You state that you will use the home as a second home.
- Reserves apply where the program sets them.
Because this is an owner-occupied consumer mortgage, standard consumer loan disclosures apply. Every file is underwritten, and approval is never promised in advance.
What Changes When the Second Home Is in Colorado?
The program figures stay the same, but the property itself raises a few practical questions. These are context rather than program rules.
Resort condos and townhomes often sit inside a homeowners’ association, and lenders review the project as well as the borrower. Ask early whether the building’s rules and structure fit the program. On the property-type side, the programs here finance one-unit second homes. Log homes, manufactured homes and barndominiums are not offered, which matters for mountain cabins.
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. Remember also that heavy rental use pushes a second home toward investment-property treatment.
Insurance and carrying costs differ by county and by building, so get quotes before you commit. In busy vacation markets, sellers often favor cash offers. Qualifying on assets gives you a financing path, but your offer is still stronger when your statements are organized in advance.
If you live outside Colorado, the question is the same: will you personally use the house? A buyer in another state can ask about a Colorado purchase, and the second-home occupancy has to be genuine.
Is This Route Worth It, or Should You Skip It?
It is worth a close look if your balances are large and your documented income is small. It is a poor fit if your income is strong and fully documented, because a standard second-home loan may be simpler.
The trade-off most buyers miss is that assets committed to the file are tied up. Under the depletion path’s minimum-assets test, a large share of your portfolio sits behind the loan. Those same dollars cannot also fund the down payment, reserves and the next purchase. Plan liquidity across your whole portfolio before you pick a path.
Retirement balances count at a haircut, but you do not withdraw them.
A quick way to choose among loan types:
| Your situation | Likely fit |
|---|---|
| Large balances, little documented income, personal use | Asset-based mortgage |
| Income shown through bank deposits | Bank statement program |
| Buying mainly to rent out | DSCR loan |
The bank statement program is for borrowers who document income with deposits, and business-purpose rental financing is DSCR. None of these is a promise of approval. Select lenders in the network review each file on its own.
Readiness Checklist
Gather these before you apply:
1. Statements for every account you want counted, covering the seasoning period for your path.
2. A clean source for any large deposit, such as a business sale, inheritance or settlement.
3. Any crypto, metals or collectibles converted to cash in a regulated account, with a paper trail.
4. A credit review so you know where you stand against the program’s score minimum.
5. An honest occupancy plan for how many weeks you will use the home.
6. Your down payment and reserve plan, separate from the balances you are using to qualify.
Key Terms Defined
Non-QM: A mortgage that falls outside standard agency guidelines, so lenders set their own documentation and approval rules.
Seasoning: The length of time money must sit in your account before a lender will count it.
Haircut: The share of an asset’s value the lender subtracts because the asset may rise, fall or be hard to cash out.
Debt-to-income (DTI): Your monthly debts divided by your monthly income, used to test whether you can carry a payment.
Second home: A property you personally use for part of the year, as opposed to an investment property bought mainly to rent.
Business-purpose loan: A loan made for an investment property whose repayment rests on the property’s rent rather than the borrower’s personal profile.
Frequently Asked Questions
Do I have to sell my investments to qualify?
No. Your balances stay in your accounts, and they serve as evidence that you can repay. Money you commit to the down payment and closing is subtracted from what counts, but nothing is liquidated to qualify.
Do retirement accounts count?
Yes, at a haircut. On the qualifier path, a 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. On the depletion path, retirement accounts count at 70% at any age. You do not withdraw the money.
Can a DSCR loan buy my vacation home?
Generally not if you will use it yourself. DSCR loans are built for non-owner-occupied investment property, and the federal 14-day owner-occupancy line is a useful reference point. A personal-use vacation home is a second home, and asset-based or bank statement financing is the usual path.
What is the smallest portfolio that works?
It depends on the path and the loan. On the qualifier path, eligible assets must equal or exceed the entire loan. On the depletion path, qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 liquid when assets are your only income source. All of this is subject to underwriting.
Can I rent the home out afterward?
The loan is underwritten as a second home, so occupancy has to be genuine. Rent generally does not help you qualify. If your plan is mainly to rent the property, discuss it up front, because the file belongs under investment-property financing 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 programs based on your statements, the property, credit profile, leverage, and your goals. Lendmire is a broker that places these files with select lenders in its network, and qualification is subject to lender guidelines and is not a commitment to lend.
Lendmire’s asset-based mortgage in Colorado page presents the program for Colorado borrowers.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges bank statement, P&L-only, 1099-only and asset-based home financing in 16 states through wholesale lenders, on primary residences, second homes and investment properties. Every option is subject to the lender’s guidelines and full underwriting. 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
1. CFPB, Regulation Z §1026.3 (exempt transactions and business-purpose rule)
2. CFPB, Ability-to-Repay and Qualified Mortgage Small Entity 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: Can a Montana Snowbird Buy a Winter Home on Savings Alone? · Can You Buy a Second Home in California on Assets Instead of Income? · Can You Buy a Home on Savings While Your Business Is Still Ramping Up?
Guides: Asset-Based Mortgage in Colorado
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.