Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
The Quick Read: The best program for your situation is the one where your statements already prove the assets, so the loan itself asks for little extra cash held back afterward. Across Lendmire’s network, that points to one of two paths, and each treats reserves differently. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
- On the asset qualifier path, no reserves are required at or below 75% loan-to-value on a refinance, subject to underwriting.
- Cash-out on the qualifier path is set by the lender and is not published, so you confirm it file by file.
- On the asset depletion path, cash-out tops out at 60% on a principal residence, second home or investment property, and no reserve months are published.
- Cash-out proceeds never count as qualifying assets on the depletion path.
- You skip traditional personal-income documentation, pay stubs and employment verification, but you still document every asset with statements.
What “Minimal Reserves” Actually Means
Reserves are the cash you must still hold after closing, usually counted in months of housing payment. An asset-based loan adds a second idea that people mix up with reserves: the asset base you need in order to qualify at all.
Those are two different tests. The asset base is the money that proves you can carry the loan. Reserves are the cushion left over once the loan is done.
On an asset-based file, the same dollars can feel like they are being counted twice. That is why the “minimal reserves” question has a different answer on each path. Programs change and every file is underwritten individually, so treat everything below as ceilings and floors, never offers.
Key Terms Defined
Asset qualifier path: The loan is qualified on assets alone. Your eligible assets, after the credit percentages, must equal or exceed the entire loan amount, and no employment or income is documented.
Asset depletion path: Your eligible assets, after haircuts, are divided by 60 months to create a monthly qualifying income. That income must carry the housing payment and your other debts through the debt-to-income test.
Haircut: The share of an account’s balance the lender will not count. A 20% haircut means 80% of the balance counts.
Cash-out refinance: A new loan larger than the one you owe, with the difference paid to you.
Rate-and-term refinance: A new loan that replaces the old balance without paying you cash, apart from a small amount at closing.
Seasoning: How long money has sat in an account before the lender trusts it as yours.
Loan-to-value (LTV): The loan amount divided by the property’s value.
Which Path Fits You
You are on one path at a time, and the choice usually settles itself. If your qualifying assets cover the whole loan, the qualifier path is the simpler file. If your assets are large but fall short of the loan, the depletion path turns them into income instead.
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| What carries the loan | Assets cover the full loan | Assets ÷ 60 months = income |
| Reserves | None at or below 75% LTV | No reserve months published |
| Max refinance leverage | 75% | 80% rate-and-term, 60% cash-out |
| Cash-out | Lender-set, not published | 60% on all property types |
| Property types | Principal residence, second home | Also investment property |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
All figures run through select programs and are subject to underwriting. The depletion path’s investment-property leverage is lower: 65% on a purchase or rate-and-term refinance and 60% on a cash-out.
Where the Reserve Math Lands on Each Path
On the qualifier path, the reserve answer is the friendlier of the two. No reserves are required at or below 75% loan-to-value, and above that level the lender sets them. Since the refinance ceiling on this path is 75%, a refinance at the ceiling stays inside the no-reserve zone.
The catch is cash-out. Whether the qualifier path allows cash-out proceeds, and at what leverage, is the lender’s call and is not published. Anyone who promises you a specific qualifier-path cash-out figure up front is guessing.
Many borrowers are surprised that the qualifier path’s real hurdle is not reserves. It is the requirement that your counted assets equal the whole loan. Reserves are light because the assets are doing the heavy lifting.
On the depletion path, no reserve months are published, which is not the same as none. The lender’s own matrix can still apply, so ask for it in writing before you commit. The qualifying work here is the asset minimum: the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 liquid when depletion is your only income source.
If asset income only supplements documented income, you can run it up to a 45% debt-to-income ratio. In that case the minimum-assets rule is waived.
What Counts, and at What Percentage
Your statements decide the path choice more than anything else. The two paths count assets differently, so never blend the tables.
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Brokerage accounts | 100% | 80% (as securities) |
| Certificates of deposit | 100% | 100% |
| Money market, savings | 100% | 100% (cash accounts) |
| 401(k) and IRA | 90% under 59½, 100% at 59½+ | 70% at any age |
| Real-estate equity | Not listed | 60% |
Accounts combine on the qualifier path. 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 not eligible.
Privately held company stock is not an eligible asset on either path. If you own a closely held business, your route is a sale or buyout converted to a seasoned cash balance.
Cryptocurrency, precious metals, collectibles and pledged or borrowed funds are not published as eligible on either path. For those, the route is conversion to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Two Worked Examples
These are illustrative. The lender’s own calculation governs.
Qualifier path. Picture an $800,000 loan. You hold $330,000 in brokerage accounts, which counts at 100% for $330,000. You hold $300,000 in a 401(k) at age 55, which counts at 90% for $270,000. You hold $200,000 in savings, which counts at 100% for $200,000.
Together that is $800,000 of usable assets against an $800,000 loan. The file is reviewed on assets alone, subject to underwriting, and reserves are not required at or below 75% loan-to-value.
Depletion path. Say you hold $1,500,000 in securities, which counts at 80% for $1,200,000. You also hold $300,000 in cash, which counts at 100% for $300,000. That is $1,500,000 of usable assets.
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. A cash-out raises the new balance, so it also raises the payment the income has to carry.
Why Cash-Out Proceeds Don’t Fix the Reserve Problem
A cash-out feels like it should help. You walk away with money, so why not count it?
Because the lender is measuring whether you could carry the loan without it. On the depletion path, cash-out proceeds never count as qualifying assets. The money exists only because of the new loan, so it cannot prove your strength before the loan.
This is where borrowers get tripped up. They size the cash-out first, then discover their qualifying assets fall short. Size the qualifying assets first, then see what cash-out the leverage cap leaves you.
A practical sequence that works across the network is this: settle the path, confirm the asset count, then decide how much cash you actually need. Taking less cash-out often keeps you under a leverage tier that carries lighter requirements.
Seasoning and Documents
The assets are documented on both paths. The only thing skipped is income paperwork. You provide statements instead of tax returns, pay stubs or employment verification.
The qualifier path asks for 60 days of seasoning and two months of statements for each qualifying account. The depletion path wants statements at least 120 days old at application, plus a most-recent statement within 45 days. Sale-of-business, inheritance and legal-settlement funds are excused from that depletion-path seasoning.
Credit still matters. The qualifier path sets a 600 minimum score, and the depletion path follows the lender’s matrix. A first-time investor on the depletion path needs a 700 score.
Housing history is read as 0x30x12, meaning no 30-day lates in twelve months. A single late in that window is considered case by case. Multiple bankruptcies are not eligible, and a housing event needs four years of seasoning on the depletion path.
What About an Investment Property?
The depletion path is the only asset-based route that covers investment property. Because those loans are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. The CFPB’s Regulation Z exempts credit extended primarily for a business purpose, and America’s Credit Unions notes that credit to an entity rather than a person is also exempt.
The practical result is a lower ceiling: 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Subject to underwriting, that is the tradeoff for qualifying on assets rather than on rent.
If the property is a rental and your goal is cash flow rather than asset coverage, a different structure may fit better. Business-purpose rental financing is DSCR, and the bank statement program suits borrowers who document income with deposits. Both read the file differently from an asset-based loan.
Edge Cases Where the Rule Bends
- Founders and shareholders. Privately held stock is not an eligible asset on either path. Your route is documented liquid assets: seasoned proceeds from a sale or conversion, cash, public securities and retirement accounts at their percentages.
- Retirement accounts under 59½. The qualifier path counts them at 90%, while the depletion path counts them at 70% at any age. A retiree under 59½ with a large 401(k) can see a real difference between the paths.
- Large balances. The qualifier path reaches $4,000,000, and the depletion path stops at $3,500,000. Above those limits, neither path applies.
- Real-estate equity. It counts at 60% on the depletion path only.
- Cash in a safe or at home. It is not eligible on the depletion path, and cash on hand never substitutes for a statement.
How a Broker Finds the Best Fit
The best program for your situation depends on your balances, your age, the property type, how much cash you want out and your credit profile. The lenders that write this product each set their own matrix on top of the published ranges. A single lender gives you one answer, while a broker can shop several wholesale lenders and match your file to the program that fits.
Lendmire arranges asset-based mortgage programs through select lenders in its network, in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. Lendmire is a broker, not a lender, and approval rests with the lender. This is a consumer mortgage, so the disclosures that come with consumer loans apply.
If you want the next piece, Lendmire’s article Best Asset-Based Cash-Out Refinance Program Without a Mortgage covers the free-and-clear case.
Before you apply, gather the following:
1. Two months of statements for every qualifying account, plus older statements if you may land on the depletion path.
2. A written source for any large recent deposit, such as a sale, inheritance or settlement.
3. A clear number for how much cash you actually want out.
4. Your current mortgage statement and property details.
Common Mistakes
- Counting cash-out proceeds as assets. They never count on the depletion path.
- Assuming “no reserves” means “no documentation.” Every asset is documented, and every file is fully underwritten.
- Counting ineligible assets. Stock options, unvested restricted stock units, crypto and privately held stock are not eligible assets. Privately held stock is out on both paths.
- Mixing the two tables. A borrower is qualified on one path at a time.
- Skipping the lender’s matrix. Published ranges are the outer edges, so confirm the lender’s own overlay before you plan around a number.
Frequently Asked Questions
Can I really get a cash-out refinance with no reserves?
On the qualifier path, reserves are not required at or below 75% loan-to-value, subject to underwriting. The open question is cash-out itself, because the lender sets whether proceeds are allowed and at what leverage. Confirm that before you assume the two work together.
Do cash-out proceeds count toward qualifying assets?
No. Your statements must prove the strength before the new loan exists.
Does the depletion path have reserve requirements?
No reserve months are published for it. The lender’s own matrix can still add a requirement, so ask for it in writing. The bigger test is the asset minimum: the lesser of $1,000,000 or 1.25 times the loan, and never below $250,000 liquid when depletion is the only income source. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Which path gives the highest cash-out?
The depletion path publishes a clear ceiling of 60% on a principal residence, second home or investment property. The qualifier path’s cash-out leverage is lender-set and not published, so compare actual lender answers on your file.
Can I use this to refinance a rental?
Only on the depletion path, where the loan is business-purpose. The ceiling on an investment property is 65% on a rate-and-term refinance and 60% on a cash-out. If your goal is cash flow rather than asset coverage, DSCR financing is the usual route for rentals.
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.
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 file is underwritten on its own facts by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Investors weighing their equity options can start with Lendmire’s guide to cash-out refinance on an investment property.
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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 §1026.3 (exempt transactions)
2. America’s Credit Unions, compliance blog on business-purpose loans
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Best Asset-Based Cash-Out Refinance Program to Buy Out a Co-Owner · Best Asset-Based Cash-Out Refinance Program to Cover a Medical Bill
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
Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.