The Quick Read: No single program wins here, because the loan-size floor and the cash-out leverage cap usually decide the outcome before your assets do. Through select programs in Lendmire’s wholesale network, the asset depletion path starts at $125,000 and caps cash-out at 60% of value. On a property worth under $150,000, that math rarely clears the floor, subject to underwriting.
- Asset-based programs review your file on your statements, not on pay stubs or tax returns. Every file is still fully underwritten.
- The asset qualifier path covers the whole loan with eligible assets. The asset depletion path turns assets into monthly income. You qualify on one path at a time.
- On the depletion path, cash-out is capped at 60% on a primary residence, a second home or an investment property, and loans start at $125,000.
- Qualifier-path cash-out terms are set by each lender and are not published, so a broker has to ask lender by lender.
- Which route fits depends on the property type, your credit, how much you need and what your balances look like.
What “Asset-Based” Actually Means
Asset-based means the lender looks at what you own instead of what you earn. The loan is still underwritten. The lender reviews credit, the property, the appraisal and your statements. What it skips is the usual paper trail of tax returns, pay stubs and employment verification.
The term gets stretched in three directions, so it helps to separate them.
- Collateral-based lending means the property secures the loan. Every mortgage does this, so it tells you little.
- Asset-based mortgages let your liquid balances do the qualifying. You can see the full set on Lendmire’s asset-based mortgage programs page.
- Rental-income loans qualify the property on its own rent. That is business-purpose DSCR lending, a separate product with separate rules.
The reader this fits is cash-heavy and income-light. Think of a retiree, someone who sold a business, an heir, or a household living off a portfolio. Balances are large and documented income is small. That is a real profile, and these programs were built for it.
The Two Paths, and Which One You Are On
Every asset-based file runs down one of two paths. You are never on both at once, and the figures below do not blend.
The asset qualifier path. Your eligible assets, after the credit percentages below, must equal or exceed the entire loan amount. No employment or income is documented. On this path, loans run up to $4,000,000. Leverage tops out at 80% on a purchase and 75% on a refinance, on a principal residence or second home. Whether cash-out proceeds are allowed, and at what leverage, is set by each lender and is not published. So no honest article can give you a number for it.
Here is how the credit percentages work. Brokerage accounts, certificates of deposit, money market and savings count at 100%. A 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. Accounts combine.
Take an illustrative file. An $800,000 loan, backed by $330,000 in brokerage accounts, $300,000 in a 401(k) held under 59½ (counted at 90%, or $270,000), and $200,000 in savings, counts $800,000 of usable assets. That is reviewed on assets alone. The lender’s own calculation governs the real answer.
The asset depletion path. Your eligible assets, after haircuts, 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. Loans run from $125,000 to $3,500,000.
Here is the illustrative shape. $1,500,000 in securities, counted at 80%, is $1,200,000. Add $300,000 in cash at 100%. That gives $1,500,000 of usable assets. Divided by 60 months, it produces $25,000 of monthly qualifying income. That income then has to cover the payment and your other debts.
The haircuts on this path are cash accounts and certificates of deposit at 100%, securities at 80%, retirement accounts at 70% at any age, and real-estate equity at 60%. Cash-out proceeds never count as qualifying assets.
Why a Property Under $150,000 Is the Hard Case
Two numbers collide on a small property: the cash-out leverage cap and the minimum loan size. On the depletion path, cash-out is capped at 60% of value, and the loan floor is $125,000. For the new loan to reach $125,000 at 60%, the property has to be worth well above $150,000. A property under that value falls short of the floor before your assets are even reviewed. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
This catches people because they check the wrong test. They see that their property value looks fine and assume the loan will too. A value test and a loan-size test are separate, and a cash-out cap shrinks the loan relative to value. Always work out the loan after the cap, then compare it to the floor.
The depletion path has a second wall. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. They can never fall below $250,000 liquid when asset depletion is your only income source. Someone sitting on $250,000 or more in liquid assets is often better served by simply using those assets than by cashing out a small property.
The qualifier path has no such published floor in the guidelines this article draws on, and it covers primary residences and second homes only. If your property is a home you live in or a vacation home, that is the path to ask about. If it is a rental, the qualifier path does not apply. Investment property is eligible only on the depletion path, where the loan is business-purpose.
Where the General Rule Breaks
The 60% cap and the $125,000 floor are the rule. A few edge cases change the picture.
A supplementing income. Asset-derived income may supplement documented income, up to a 45% debt-to-income ratio. When it supplements rather than replaces, the minimum-assets rule is waived. If you have a pension or Social Security that you can document, that can change which test you face.
A rate-and-term refinance instead of cash-out. On the depletion path, a principal residence or second home can go up to 80% on a rate-and-term refinance, and an investment property up to 65%. A rate-and-term loan is a different transaction. It pays off the existing mortgage and returns no cash. It may not fit what you need, but the leverage is higher.
A first-time investor. On the depletion path, a first-time investor needs a 700 credit score. Otherwise the depletion path follows the lender’s matrix, and the qualifier path’s floor is 600. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
A recent housing event. A housing event needs four years of seasoning on the depletion path. Multiple bankruptcies are not eligible. Housing history is 0x30x12, though one 30-day late in the last twelve months is considered case by case.
Assets that do not count. Privately held stock is not eligible on either path. The same goes for cryptocurrency, precious metals, collectibles, pledged or borrowed funds, and business accounts beyond your ownership share. 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 are also out. The documented route for any of these is converting them to a seasoned cash balance in a regulated account. The lender reviews the source.
Seasoning. On the qualifier path, expect 60 days of seasoning and two months of statements per qualifying account. On the depletion path, statements must be 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.
How a Broker Finds the Right Program
The best program for your situation depends on the property type, your credit, how much you need, how your assets are held and what the lenders in a network will actually write. Lendmire is a mortgage broker, not a lender. It places files through select lenders in its wholesale network, and each lender sets its own overlays. One may want more seasoning than another. One may treat a retirement account differently at the edges. A broker’s job is to match the scenario to the program, and to say so early when none fits.
That last part matters on a small property. Here is how the routes line up.
| Your situation | Path to ask about | Main hurdle |
|---|---|---|
| Home or second home, assets cover the loan | Asset qualifier | Cash-out terms set by lender |
| Home or second home, want income from assets | Asset depletion | $125,000 floor, 60% cash-out cap |
| Rental property, assets large | Asset depletion | Same floor, plus 700 score if first-time |
| Rental that earns well, assets modest | Business-purpose rental loan | Separate rent-coverage test |
| Small draw on a modest property | HELOC or second lien | Different program rules |
Rental financing that is reviewed on the property’s income is DSCR lending, and it has its own size minimums. Some programs go below 1.00 coverage, through select lenders in the network, but leverage and terms adjust when they do. If you qualify on assets only because your income is thin, a DSCR loan on a rental may be the cleaner route. Qualification is primarily on property-level rental income covering the payment, subject to lender guidelines.
Does a Small Cash-Out Even Pay?
Fixed costs weigh more heavily on a small loan. An appraisal, title work and lender charges do not shrink just because the balance is small. They take a larger share of the proceeds. The cash that reaches you is the new loan minus the payoff minus those costs, and on a small balance that difference can be thin.
Before you apply, run a break-even check. Decide how much cash you need. Estimate the new loan after the leverage cap. Subtract your payoff and expected costs. Then ask whether what remains justifies the work.
If the answer is no, you have alternatives for a small draw. A home equity line of credit lets you borrow only what you need. A second lien leaves your existing first mortgage in place, which matters if the current loan is one you want to keep. And sometimes the right move is to use the assets directly and skip the cash-out.
The Business-Purpose Wrinkle on Rentals
A cash-out on a rental you do not live in is treated differently from a home loan. The CFPB’s Regulation Z, section 1026.3 exempts credit extended primarily for a business purpose. It says credit to acquire, improve or maintain non-owner-occupied rental property is deemed business-purpose. The official text is at the eCFR. The purpose of the proceeds is what counts, so a loan secured by a rental is not automatically business-purpose if the cash goes elsewhere. Your lender and counsel decide how a given loan is classified.
Before You Apply
- Pull your last several account statements and check their dates against the seasoning rules for the path you want.
- Total your balances by account type and apply the credit percentages to see your usable assets.
- Identify any asset that will not count and plan to convert it to seasoned cash.
- Get a rough value and payoff for the property, then work out the loan after the leverage cap.
- Compare that loan to the $125,000 floor if you are on the depletion path.
- Check your credit and housing history against the score and lateness rules above.
- Decide how much cash you need, and whether a smaller product fits better.
Tax treatment can depend on how the funds are used and how the property is held; borrowers should keep clear records and speak with a qualified tax professional before relying on any deduction.
Key Terms Defined
Asset qualifier: a path where eligible assets must equal or exceed the whole loan amount, with no income documented.
Asset depletion: a path that divides usable assets by 60 months to create a qualifying monthly income.
Seasoning: how long funds must sit in your account, shown by statements, before the lender counts them.
Haircut: the share of an account’s balance that is discounted when the lender counts it.
Cash-out refinance: a new loan that pays off the old one and gives you the difference in cash.
Loan-to-value (LTV): the loan amount as a percentage of the property’s appraised value.
Rate-and-term refinance: a refinance that changes the loan terms without giving you cash.
Frequently Asked Questions
Can privately held company stock count toward qualifying?
No. Privately held company stock is not an eligible asset on either path. If you hold shares in a company you own or founded, the documented route is a sale or buyout that turns the proceeds into a seasoned cash balance. Public securities and retirement accounts can count at their respective percentages. The lender reviews the source of those funds.
Can I do an asset-based cash-out on a rental worth under $150,000?
Rentals are eligible only on the asset depletion path, which has a $125,000 minimum loan and a 60% cash-out cap. A property worth under $150,000 generally cannot produce a loan that large at that leverage. If your numbers are close, a program reviews each file individually, subject to underwriting.
Does asset-based mean no underwriting?
No. Every file is fully underwritten. You document assets with statements, and the eligibility reviews credit, the property and the appraisal. What is not required on these programs is tax returns, pay stubs or employment verification. The qualifier path documents no income at all.
Do retirement accounts count?
They do, at different percentages by path. 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. Cash-out proceeds never count as assets.
What if my property is too small for an asset-based program?
Then a different product may fit better. A HELOC or second lien can work for a smaller draw. A business-purpose rental loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. A broker can tell you which one to pursue after seeing your numbers.
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. These programs are available through select lenders in Lendmire’s network in 16 states, and all figures are subject to underwriting. They are not a commitment to lend.
For how equity extraction works on an investment property, see 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. CFPB, Regulation Z, section 1026.3
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 Seasoning Rules for a Colorado Asset-Based Mortgage · Can You Take Cash Out of a Texas Homestead on an Asset Depletion Loan? · Can You Get an Asset-Based Mortgage on a Tennessee Condo?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.