The Quick Read: A Michigan household that has retired early can qualify on assets instead of a paycheck, through select programs placed by a broker, subject to underwriting. One path counts eligible assets against the whole loan and documents no employment or income. The other divides usable assets by 60 months to create a qualifying income. Either way, the assets are documented with statements, and the file is fully underwritten.
- Asset qualifier path: eligible assets must equal or exceed the entire loan. No income is documented.
- Asset depletion path: usable assets divided by 60 months become monthly income that runs through the debt-to-income test.
- A borrower is qualified on one path at a time. The two tables never blend.
- There is no traditional personal-income documentation, and no pay stubs or employment verification. There are still statements, seasoning and a credit review.
- Consumer mortgage lending for this program is licensed in 16 states, Michigan among them.
FIRE households trip the same wire every time. The balance sheet is strong. The tax return shows almost nothing. A standard underwriter sees a borrower with no job and no income to divide into a payment.
The fix is not a trick. It is a different question: can the assets carry this loan? Lendmire is a broker, so the work is matching the household to a program in its wholesale network that answers that question the way the file needs. For the program page, see Lendmire’s asset-based mortgage program.
Why FIRE Households Look Unemployed to a Lender
A standard mortgage file is built around earned income. Underwriters want pay stubs, traditional personal-income documentation, then divide that income into the housing payment and other debts. A household living on portfolio withdrawals, dividends and a planned drawdown has little of that on paper.
The household is not poor. The paper trail is built for a different kind of borrower. Asset-based programs exist for exactly this gap: retirees, business sellers, inheritance recipients, and early-retired professionals whose balances are large and whose documented income is not.
Early retirees have one added wrinkle. Many hold a big share of net worth in 401(k) and IRA balances, and those accounts are locked behind age rules. The IRS states that distributions before age 59½ generally carry a 10% additional tax unless an exception applies. That is a tax fact about withdrawals. How a lender credits the balance is a separate program rule, covered below.
The Two Paths, Defined
Across the wholesale network, asset-based files split into two structures. Pick the wrong one and the file stalls.
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| What it tests | Assets cover the whole loan | Assets become monthly income |
| Income documented | None | Derived from assets |
| Debt-to-income test | Not run on income | Yes, on derived income |
| Purchase leverage | Up to 80% | Up to 80% (65% investment) |
| Refinance leverage | Up to 75% | 80% rate-and-term, 60% cash-out |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
Leverage figures are ceilings through select programs, subject to underwriting. They are not offers. On the depletion path, the 80% and 60% figures apply to a principal residence or second home. An investment property on that path is capped at 65% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. Cash-out proceeds never count as qualifying assets.
On the qualifier path, whether cash-out is allowed, and at what leverage, is set by the lender. Do not plan around it.
The qualifier path in plain terms
The test is simple. Take each account, apply the credit percentage, add them up. If the total equals or exceeds the entire loan amount, the file is reviewed on assets alone. No employment is documented and no income is documented.
Here is the illustrative shape. Picture an $800,000 loan. The household holds $330,000 in brokerage accounts, counted at 100%. It holds $300,000 in a 401(k) and the borrower is under 59½, so it counts at 90%, which is $270,000. It holds $200,000 in savings, counted at 100%. That adds up to $800,000 of usable assets, which equals the loan. The file is reviewed on assets alone, subject to underwriting. The lender’s own calculation governs.
The depletion path in plain terms
Here assets are converted to income. Usable assets are divided by 60 months. The result is a monthly qualifying income, and it must carry the housing payment and other debts through the debt-to-income test.
Illustratively: $1,500,000 in securities counts at 80%, which is $1,200,000. Add $300,000 in cash at 100%. 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.
The depletion path has minimums. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When depletion is the only income source, liquid assets can never fall below $250,000. If the household has some documented income, derived income can supplement it up to a 45% debt-to-income ratio, and then the minimum-assets rule is waived.
Which Assets Count, and at What Percentage
Each path credits assets differently. Never mix the two columns.
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Brokerage / securities | 100% | 80% |
| Cash, savings, money market | 100% | 100% (cash) |
| Certificates of deposit | 100% | 100% |
| Private stock | Not published | 75% |
| 401(k) / IRA | 90% under 59½, 100% at 59½+ | 70% at any age |
| Real-estate equity | Not published | 60% |
Some asset types do not count on the depletion path at all: 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.
Crypto, precious metals, collectibles, pledged funds and borrowed funds are not published as eligible on either path. Here’s the catch: that does not mean they are worthless to the file. The documented route is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender. Plan that move early.
The Early Retiree’s Retirement-Account Question
This is where FIRE files differ most from a standard retiree file. A 62-year-old and a 44-year-old can hold the same balance and get different treatment.
On the qualifier path, age matters directly. A 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. The haircut is small, but it is real, and it changes the total.
On the depletion path, retirement accounts count at 70% at any age. The household does not have to withdraw anything to use the balance. The lender credits the balance as-is.
Two things are easy to confuse. The IRS early-distribution tax is about what it costs to take money out. The program percentage is about how much the account counts toward qualifying. An FIRE household can use a retirement balance to qualify without ever making a withdrawal. Keep those two questions apart when planning.
The IRS also describes a substantially equal periodic payments exception that early retirees often discuss with their tax advisers. That is a tax-planning decision for a qualified professional. Tax treatment varies; consult a qualified professional.
Do You Have to Sell Your Investments?
No. Neither path asks the household to liquidate a portfolio. On the qualifier path, the balances are counted and documented. On the depletion path, they are converted on paper to monthly income. The securities stay invested.
Moving money still matters for one reason: seasoning. Assets need to sit in documented accounts long enough for the lender to trust the source.
Which Path Fits Your Household?
Lead with the question the file has to answer. Do the assets cover the loan outright, or do they need to become income?
| Household profile | Better fit | Why |
|---|---|---|
| Large cash and brokerage, modest loan | Asset qualifier | Assets exceed the loan, no income documented |
| Mixed portfolio, larger loan | Asset depletion | Derived income can carry a bigger payment |
| Some part-time income plus portfolio | Depletion, supplementing | Income plus derived income, up to 45% DTI |
| Buying an investment property on assets | Depletion only | Qualifier path is for residences and second homes |
Two quick profiles show the logic.
Consider an early-retired couple in their late 40s with a seven-figure brokerage account and a lake-country second home in mind. Brokerage counts at 100% on the qualifier path. If the loan is modest against that balance, the qualifier path may fit and the household never documents income. If the loan is large, the 80% securities credit on the depletion path produces monthly income that has to carry the payment.
Now consider a business seller who just closed a sale and has the proceeds in cash. On the depletion path, sale-of-business funds are excused from the statement-age requirement. That is a real advantage for someone whose cash arrived recently.
Michigan households weigh a few local cases the same way: a northern or lake second home, a buyout, a business sale, or a move from a paycheck household to a portfolio household. The program figures do not change by state. What changes is the property and the buyer’s plan.
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 Underwriters Still Review
Skipping employment documents does not skip underwriting. Here is what stays on the file.
- Credit. The qualifier path has a 600 minimum score. The depletion path follows the lender’s matrix. A first-time investor on the depletion path needs 700.
- Housing history. 0x30x12. One 30-day late in the last twelve months is considered case by case.
- Credit events. Multiple bankruptcies are not eligible. A housing event needs 4 years of seasoning on the depletion path.
- Asset statements. 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.
- Reserves. On the qualifier path, none required at or below 75% loan-to-value. Above that, the lender sets them. The depletion path publishes no reserve months.
Programs change, and every file is underwritten individually. The program is a consumer mortgage, so the usual consumer disclosures apply.
The Investment-Property Edge Case
Occupancy decides the regime. A household that will live in the home, or use it as a second home, is borrowing consumer credit. The ability-to-repay review rests on the assets, and the file is built around that.
A purchase of a property that someone else will rent is different. Federal rules exempt credit extended primarily for a business purpose, and a non-owner-occupied rental is treated that way case by case. For an FIRE household buying a rental, the depletion path is the asset-based route, at 65% on a purchase or rate-and-term and 60% on a cash-out. Rental-property loans that qualify primarily on the property’s rental income covering the payment, subject to lender guidelines, are a separate product.
Do not move into the rental in year one and expect the file to hold. Occupancy at application is part of how the loan is classified.
Prep Steps Before You Apply
Most FIRE files that stall do so on documents, not eligibility. Here is the order that keeps them clean.
1. Pick the path first. Add up the balances with the credit percentages. Compare the total to the loan you want.
2. Consolidate where it helps. Accounts combine on the qualifier path, but each qualifying account needs its own statements.
3. Season the funds. Qualifier path needs 60 days. Depletion path needs statements 120 days old plus one within 45 days.
4. Convert unusual assets early. Crypto, metals and similar holdings should move to a seasoned cash balance in a regulated account before the file goes in.
5. Avoid large unexplained transfers. Moves between accounts get reviewed. Paper them.
6. Pull complete statements. Every page, every account, no gaps.
Key Terms Defined
Asset qualifier: a path where eligible assets, after credit percentages, must equal or exceed the entire loan and no income is documented.
Asset depletion: a path where usable assets divided by 60 months become monthly qualifying income.
Seasoning: the time funds must sit in a documented account before the lender counts them.
Usable assets: the balance that counts after the program’s percentage is applied.
Debt-to-income test: the comparison of monthly debts and housing payment to qualifying income.
Myths Worth Dropping
- No income means no documents. That is a myth. The assets are documented with statements, and the file is fully underwritten. What drops out is traditional personal-income documentation, such as pay stubs and employment verification.
- You must be retired or unemployed. That is a myth. A household with some documented income can use derived income to supplement it, up to a 45% debt-to-income ratio on the depletion path.
- A locked 401(k) does not count. That is a myth. It counts at the program’s percentage, whether or not you can touch it penalty-free.
- Cash-out proceeds can fund the file. That is a myth on the depletion path.
Frequently Asked Questions
Can both spouses be non-working and still qualify?
Yes, subject to underwriting. The file rests on documented assets, not on either spouse’s employment. Joint and individual accounts both need full statements, and the household chooses one path.
Does a 401(k) alone work?
It can, but the math is tight. On the qualifier path, a 401(k) counts at 90% under 59½ and 100% after, so the balance has to exceed the loan by a margin. On the depletion path it counts at 70%, and the minimum-asset rules still apply.
Can I use this for a refinance?
Yes. The qualifier path allows up to 75% on a refinance of a principal residence or second home. The depletion path allows 80% on a rate-and-term and 60% on a cash-out. Cash-out proceeds never count as assets.
Does it work for a second home?
Yes. Both paths cover principal residences and second homes, subject to underwriting. A lake or northern Michigan second home fits that category.
What if my wealth is in crypto?
Crypto is not published as eligible on either path. The documented route is converting it to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
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. Reach the team at 828-256-2183, or request a quote.
Michigan’s lake-country buyers tend to start with the same question, and the answer rarely turns on a paycheck: it turns on which account holds the money and how long it has been sitting there.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending partners for borrowers whose tax returns understate their income, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. IRS, Exceptions to tax on early distributions
2. IRS, Substantially equal periodic payments
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 Widow Qualify for a Mortgage on Life Insurance and Retirement Assets? · Can You Qualify for a Mortgage If Your Income Is in a Foreign Currency? · How to Refinance a Georgia Mortgage After Retiring With No W-2 Income
Guides: Asset-Based Mortgage in Michigan
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.