The Quick Read: The best program depends on which conventional rule you miss and which path your assets support. On the asset depletion path, balances become monthly qualifying income, and cash-out is available through select programs at lower leverage. On the asset qualifier path, assets alone cover the loan and no income is documented, but cash-out terms there are set by the lender and not published.
- Asset qualifier path: eligible assets must equal or exceed the entire loan. No employment or income is documented.
- Asset depletion path: usable assets divided by 60 months become qualifying income, which then runs through the debt-to-income test.
- Cash-out on the depletion path tops out at 60% on a principal residence, second home or investment property, subject to underwriting.
- Privately held company stock is not an eligible asset on either path.
- The file is fully underwritten. Assets are documented with statements. There is no traditional personal-income documentation, and no pay stubs or employment verification are required.
Lendmire is a mortgage broker. It arranges these loans through select lenders in its wholesale network and does not lend. Consumer asset-based lending is available in 16 states, and every figure here is subject to underwriting and the lender’s own calculation.
What Does “Asset-Based” Mean Here?
The phrase covers three different things, and mixing them up is how borrowers end up with the wrong program. Here is how they separate.
1. Your assets qualify you. The asset qualifier path. Eligible balances cover the whole loan and income is not documented.
2. Your assets become income. The asset depletion path. Balances are converted into monthly qualifying income.
3. The property’s rent drives lender review. That is a DSCR loan, a different product built for business-purpose rental financing. This article stays with the first two.
A fourth meaning exists too: hard-money lenders who lend against the property’s value. That is a different product again.
A borrower is qualified on one path at a time. The two paths use different haircuts, different leverage limits and different minimums. Never blend the tables.
Why Does Conventional Underwriting Say No?
Conventional underwriting reads documented income. It looks for tax returns, pay stubs and a stable employment history, then tests debt against that income.
Retirees living on a portfolio fail that test. So do business sellers holding sale proceeds, heirs holding an inheritance, and early-retired professionals. Their balances are large and their documented income is small.
Conventional guidelines also set cash-out limits and seasoning conditions of their own. The Fannie Mae eligibility matrix shows how agency programs separate cash-out from limited cash-out refinances and cap each differently. Those are agency rules. They do not govern the programs described here.
Loans that fall outside the qualified mortgage box are called non-QM. The federal consumer-finance regulator’s repayment-capacity assessment report explains what makes a loan non-QM. Lenders still have to make a good-faith repayment determination. Here that determination rests on the assets.
Which Path Fits You?
| If you are… | Look at | What is documented | Cash-out fit |
|---|---|---|---|
| Holding assets that exceed the loan | Asset qualifier | Statements only | Lender-set, not published |
| Living on a portfolio, with a smaller loan | Asset depletion | Statements, plus credit | Yes, at lower leverage |
| Borrowing on an investment property | Asset depletion | Statements, plus credit | Yes, 60% ceiling |
| Holding mostly private company stock | Neither, until sold | Sale proceeds as seasoned cash | After conversion |
| Needing the income to cover other debts | Asset depletion | Derived income plus debts | Yes, subject to DTI |
The question is whether your usable assets exceed the loan outright. If they do, the qualifier path is cleaner. If they don’t, depletion is the fallback.
How Does the Asset Depletion Path Work?
This is the path that handles cash-out most clearly. Eligible assets, after haircuts, are divided by 60 months to produce a monthly qualifying income. That income must carry the full housing payment and other debts through the debt-to-income test.
The haircuts on this path:
- Cash accounts and certificates of deposit count at 100%.
- Securities count at 80%.
- Retirement accounts count at 70% at any age.
- Real-estate equity counts at 60%.
Run the numbers on a borrower with $1,500,000 in securities and $300,000 in cash. Securities at 80% count as $1,200,000. Cash counts at 100%, or $300,000. That is $1,500,000 usable, divided by 60 months, for $25,000 of monthly qualifying income. That income then has to carry the housing payment and other debts. This is illustrative, and the lender’s own calculation governs.
Leverage on this path is up to 80% on a purchase or rate-and-term refinance of a principal residence or second home, and 60% on a cash-out. Investment property runs up to 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Loan amounts run from $125,000 to $3,500,000.
Minimums matter. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. Where depletion is the only income source, liquid assets can never fall below $250,000. If asset income only supplements documented income, it can go up to a 45% debt-to-income ratio, and the minimum-assets rule is waived.
One rule trips people up. Cash-out proceeds never count as qualifying assets. You cannot borrow against the property and then use the cash to qualify for the same loan.
What About the Asset Qualifier Path?
On the qualifier path, eligible assets must equal or exceed the entire loan amount. No employment or income is documented. Loans go up to $4,000,000. Leverage is up to 80% on a purchase and 75% on a refinance of a principal residence or second home, subject to underwriting.
Whether cash-out proceeds are allowed on this path, and at what leverage, is set by the lender. It is not published. A borrower who needs cash-out should expect the broker to confirm that with the specific lender before the file is built around it.
Here is how the credit percentages work on this path:
- Brokerage accounts, CDs, money market and savings count at 100%.
- Retirement accounts (401(k) and IRA) count at 90% under age 59½ and 100% at 59½ or older.
- Accounts combine.
Take an $800,000 loan with $330,000 in brokerage accounts, $300,000 in a 401(k) held by a borrower under 59½, and $200,000 in savings. The brokerage counts at 100%, or $330,000. The 401(k) counts at 90%, or $270,000. Savings count at 100%, or $200,000. That is $800,000 of usable assets, which covers the loan and is reviewed on assets alone. Again, illustrative only.
Reserves are not required at or below 75% loan-to-value. Above that, the lender sets them. Credit minimums start at 600.
What Counts, and What Doesn’t?
Not everything with a balance counts. The following 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.
Privately held company stock is not an eligible asset on either path. That includes closely held shares in a business you own. Cryptocurrency, precious metals, collectibles, pledged or borrowed funds, and business accounts beyond your ownership share are not published as eligible either.
The route for all of these is conversion. A sale, buyout or liquidation that lands as cash in a regulated account can count, once it is seasoned and the lender has reviewed the source. A founder who sells a stake and holds the proceeds in a brokerage account has a documentable file. A founder holding the stake itself does not.
How Seasoning and Statements Work
Seasoning is where files stall, because assets that moved recently look borrowed.
On the qualifier path, funds need 60 days of seasoning, with two months of statements for each qualifying 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 the sale of a business, an inheritance or a legal settlement are excused from that seasoning, though the source is still reviewed.
This is the point where “no income documentation” gets misread. The assets are documented on both paths. Every balance traces to a statement. The file is fully underwritten. What you skip is tax returns, pay stubs and employment verification.
How Does This Compare With Other Paths?
| Factor | Asset-based | Bank statement | DSCR | HELOC |
|---|---|---|---|---|
| It is reviewed on | Assets | Deposits | Property rent | Existing equity |
| Best for | Cash-rich, income-light | Self-employed | Rental owners | Keeping a first lien |
| Replaces first mortgage | Yes | Yes | Yes | No |
| Property use | Home, second home, investment (depletion) | Varies | Investment only | Varies |
If you hold a first mortgage you want to keep, a second-lien product can beat a refinance. A refinance resets the whole balance. That tradeoff is worth running before you commit to any new first lien.
If the property is a rental and the rent covers the payment, a business-purpose rental loan is often the cleaner fit.
Credit and Housing History
Credit decides how much of this works. The qualifier path publishes a 600 minimum score. The depletion path follows the lender’s matrix, so ask the broker which matrix applies to your loan size. A first-time investor on the depletion path needs 700.
Housing history is typically 0x30x12. One 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible, and a housing event needs 4 years of seasoning on the depletion path. No program here skips the credit review.
Costs, Tradeoffs and When Not to Use It
Be honest about the tradeoffs. Asset-based programs are non-QM, and pricing usually runs above agency loans. Cash-out leverage is lower than purchase leverage. On the depletion path, 60% cash-out is a much smaller loan than 80% purchase.
Alternatives deserve a look. A borrower with large securities holdings could sell rather than borrow, though that triggers a tax event. Tax treatment varies; consult a qualified professional. A margin or securities-backed line avoids the refinance but carries its own call risk.
Skip this path if conventional underwriting works for you. If your documented income carries the loan, the extra layer buys you nothing.
What the Process Looks Like
1. Sort the balance sheet. List every account and mark it eligible, haircut or ineligible.
2. Choose the path. If usable assets exceed the loan, look at the qualifier path. If not, depletion.
3. Gather statements. Two months per account for the qualifier path. For depletion, statements 120 days old plus a recent one within 45 days.
4. Confirm cash-out terms. On the qualifier path, the broker asks the lender directly, since terms are not published.
5. Underwriting. The lender reviews credit, assets, the property and the source of funds. TRID disclosures apply, because this is a consumer mortgage.
Key Terms Defined
Asset qualifier: A path where eligible assets, after credit percentages, equal or exceed the whole loan and no income is documented.
Asset depletion: A path that divides usable assets by 60 months to produce monthly qualifying income.
Haircut: The share of a balance that is discounted because the asset can lose value or is hard to reach.
Seasoning: The length of time funds must sit in an account before they count.
Non-QM: A mortgage outside the qualified mortgage box, underwritten on a lender’s own guidelines.
Cash-out refinance: A new, larger loan that pays off the old one and leaves the difference with the borrower.
Frequently Asked Questions
Can I use privately held company stock to qualify?
No. If you sell the business or a stake, the proceeds can count once they sit as seasoned cash in a regulated account. Sale-of-business funds are excused from the depletion path’s statement seasoning, though the source is still reviewed.
Do I need tax returns or pay stubs?
No traditional personal-income documentation, pay stubs or employment verification are used. The file is still fully underwritten. Your assets are documented with statements, your credit is reviewed, and the property is appraised.
Can I take cash out on an investment property?
On the asset depletion path, yes, up to 60% leverage on a cash-out refinance of an investment property, subject to underwriting. The loan is business-purpose. Cash-out proceeds never count toward the assets used to qualify. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Are retirement accounts counted differently on each path?
Yes. On the qualifier path they count at 90% under age 59½ and 100% at 59½ or older. On the depletion path they count at 70% at any age. Which path is better depends on your balances and the loan size.
Is approval guaranteed under this program, and are the terms fixed?
No. Every file is reviewed individually, programs change, and nothing here is a commitment to lend.
Where to Go From Here
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. Reach the team at 828-256-2183.
Whatever the path, the result turns on the same thing: how much of your balance sheet a lender can count, and how cleanly you can document it.
A deeper walk-through of investment-property equity extraction lives in Lendmire’s guide to cash-out refinance on an investment property.
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.
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Fannie Mae Eligibility Matrix
2. CFPB Ability to Repay Qualified Mortgage Assessment Report
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 You Cash Out a Texas Home on an Asset Depletion Refinance? · Can You Get a Texas Asset-Based Mortgage With No Job? · How to Document a Wire From a Sale Before an Asset-Based Mortgage
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.