The Quick Read: Yes, an Alabama buyer can typically qualify on IRA assets without withdrawing anything, because the lender counts the balance on paper while the house secures the loan; the qualifier and depletion paths apply different credit percentages, and every file is underwritten, subject to lender guidelines.
- Two paths: On the asset qualifier path, eligible assets must cover the entire loan with no income documented. On the asset depletion path, usable assets divided by 60 months become qualifying income that runs through the debt-to-income test.
- IRA credit: The qualifier path counts an IRA at 90% under age 59½ and 100% after. The depletion path counts retirement accounts at 70% at any age.
- Leverage: Purchases go up to 80% on the qualifier path. The depletion path also allows up to 80% on a primary or second home purchase, but investment property tops out lower.
- Documentation still applies: You provide statements, not traditional personal-income documentation, pay stubs or employment verification. The IRA stays invested in your name and is not pledged as collateral.
- Taxes are separate: Qualifying on assets is not a withdrawal. Tax treatment varies if you later take a distribution, so consult a qualified professional.
Can an Alabama buyer qualify for a mortgage on IRA assets without withdrawals? The account stays invested and the house, not the IRA, secures the loan. Which path fits depends on how large your balances are compared with the loan.
- Asset qualifier path: eligible assets must cover the entire loan, and no employment or income is documented.
- Asset depletion path: usable assets divided by 60 months become qualifying income that runs through the debt-to-income test.
- IRA credit: 90% under age 59½ and 100% after on the qualifier path; 70% at any age on the depletion path.
- Leverage: up to 80% on a purchase on the qualifier path; up to 80% on a principal residence or second home purchase on the depletion path.
- Still underwritten: you provide statements, not traditional personal-income documentation, pay stubs or employment verification. Every file is fully reviewed, subject to underwriting.
Lendmire is a mortgage broker, so it does not lend. It places these files with select lenders in its wholesale network. Consumer mortgage lending through this program is licensed in 16 states, and Alabama is one of them. The figures below are ceilings and floors, not offers.
What Does “Qualify on IRA Assets” Actually Mean?
It means the lender treats your retirement balance as evidence you can repay, then moves on. Nothing leaves the account. There is no taxable transfer to a bank and no early-withdrawal event.
Three phrases get confused, so separate them:
- Qualifying on IRA assets: the lender counts the balance on paper. The IRA stays put.
- Withdrawing from an IRA: you take real money out, which is a separate decision with its own tax consequences.
- Borrowing against an IRA: the IRA is pledged as collateral. That is not what these programs do. The property secures the loan.
A fourth misreading is worth clearing up. “Mortgage on IRA assets” can sound like buying a property inside a self-directed IRA. That is a different structure with its own rules, and it is not what this article covers. Here the borrower owns the home personally and the IRA simply backs the file.
This is also not a new idea in federal lending. The Federal Register commentary on the ability-to-repay rule says a lender may base repayment ability on income, on assets other than the home being financed, or on both, and it lists vested retirement amounts as an example of an eligible asset.
Which Path Fits: Assets Cover the Loan, or Assets Become Income?
Pick the qualifier path if your eligible assets equal or exceed the whole loan. Pick the depletion path if your assets are large but fall short of the loan, so converting them into monthly income is the better fit. A borrower is qualified on one path at a time, and the two tables never blend.
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| How it works | Assets must cover entire loan | Assets ÷ 60 months = income |
| Income documented | None | Derived income runs through DTI |
| Withdrawal needed | No | No |
| Purchase leverage | Up to 80% | Up to 80% (primary/second home) |
| Loan size | Up to $4,000,000 | $125,000 to $3,500,000 |
| Best fit | Very large balances | Large balances, loan exceeds assets |
Leverage details differ. On the qualifier path, refinances go to 75% on a principal residence or second home. Investment property on the depletion path tops out at 65% on a purchase or rate-and-term and 60% on a cash-out. The qualifier path is for a principal residence or second home. All of this is subject to underwriting and varies by lender.
How Much of Your IRA Counts?
On the qualifier path, an IRA counts at 90% if you are under 59½ and 100% once you reach 59½. On the depletion path, retirement accounts count at 70% at any age. Those percentages reflect that a retirement balance is not fully spendable cash.
Here is how the other assets stack up on each path.
| Asset | Qualifier Path | Depletion Path |
|---|---|---|
| Brokerage accounts | 100% | Securities at 80% |
| Savings, money market | 100% | Cash at 100% |
| Certificates of deposit | 100% | 100% |
| 401(k) and IRA | 90% under 59½, 100% after | 70% any age |
| Private stock | Not listed | 75% |
| Real-estate equity | Not listed | 60% |
Accounts combine, so you can stack an IRA with brokerage and savings balances. Some assets are not eligible 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, and borrowed or pledged funds are not published as eligible on either path. The documented route is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Two Worked Examples
The lender’s own calculation governs. These show the shape of the math, not an offer.
Qualifier path. Picture a borrower seeking an $800,000 loan. They hold $330,000 in brokerage accounts (counted at 100%, so $330,000), $300,000 in a 401(k) while under 59½ (counted at 90%, so $270,000), and $200,000 in savings (counted at 100%, so $200,000). That totals $800,000 of usable assets, which matches the loan. The file is reviewed on assets alone, subject to underwriting, with no income documented.
Depletion path. Say a borrower holds $1,500,000 in securities and $300,000 in cash. Securities count at 80%, so $1,200,000. Cash counts at 100%, so $300,000. Usable assets are $1,500,000. Divide by 60 months and the result is $25,000 of monthly qualifying income. That income then has to carry the housing payment and other debts through the debt-to-income test.
Notice what each example avoids: neither requires selling anything or moving money out of the retirement account.
Do I Have to Withdraw or Liquidate?
No. This is the most common misconception. The calculation is an underwriting exercise. CNBC reports that the underwriter wants a statement showing the assets exist, not a taxable transfer from the IRA to a bank account.
That said, keep two questions separate. Underwriting asks whether your assets support the loan. Taxes ask what happens if you actually take money out. If you later withdraw funds for a down payment, that is a distribution with its own consequences. Tax treatment varies; consult a qualified professional.
This is the real tradeoff. Qualifying on assets costs you a haircut and a leverage ceiling. Withdrawing costs you a taxable event and possibly a penalty. If your down payment comes from a non-retirement account, you may never need to touch the IRA at all.
What the Lender Will Verify
Expect documents, not a pass. The program asks for no traditional personal-income documentation, pay stubs or employment verification, but the assets themselves are documented with statements and reviewed.
- Qualifier path: 60 days of seasoning and two months of statements for each qualifying account. Credit starts at a 600 minimum score.
- Depletion path: statements 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. Credit follows the lender’s matrix. A first-time investor on this path needs a 700 score.
- Housing history: 0x30x12, with one 30-day late in the last twelve months reviewed case by case. Multiple bankruptcies are not eligible. A housing event needs 4 years of seasoning on the depletion path.
- Account conditions: in your name, vested, and accessible.
Across the wholesale network, the files that stumble usually have the same cause. Funds were moved or consolidated shortly before applying, so the balance has not seasoned. Another common slip is using the same dollars for both the qualifying balance and the down payment, which shrinks the usable total. Lenders re-check balances before funding, so a market dip can also change the math.
The depletion path adds minimums. 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 depletion is your only income source. Asset-derived income can also supplement documented income up to a 45% debt-to-income ratio, and in that case the minimum-assets rule is waived.
Does Asset-Based Mean No Debt-to-Income Test?
Not always. On the qualifier path no income is documented, and the lender’s ability-to-repay review rests on the assets. On the depletion path, derived income goes straight through the debt-to-income test. Even on assets alone, a lender must still weigh repayment ability. A compliance analysis of non-QM lending notes that a lender may rest its decision on verified assets but must still consider debt-to-income or residual income.
Reserves are lighter than many expect. The qualifier path requires none at or below 75% loan-to-value, and above that the lender sets them. The depletion path has no published reserve months.
Alabama Buyers: Where This Tends to Fit
Alabama is among the 16 states where this consumer program is available. The program figures do not change by state. Alabama specifics, such as local prices, taxes and insurance, are context, not program terms.
The profile that fits is cash-heavy and income-light: a retiree, someone who just sold a business, a recipient of an inheritance or settlement, an early-retired professional, or a household living on a portfolio. Balances are large. Documented income is not.
The property matters. A second home, such as a lake or Gulf Coast place, fits the same profile. On the depletion path, an investment property is possible at the lower 65% and 60% leverage levels, and the loan is business-purpose. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
A genuine toss-up for some borrowers: if you are young enough that the 90% credit under 59½ applies, but your balances are near the loan size, the qualifier path may work only with a larger down payment. If your balances run well past the loan, the depletion path’s lower leverage on an investment property may be a fair price for avoiding a withdrawal. A rental purchase on the strength of its own rent is usually a different product. Business-purpose rental financing is DSCR, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
Which Path Fits Which Borrower?
- Balances exceed the loan, no income to document: the qualifier path.
- Balances are large but below the loan, and you want to preserve the account: the depletion path.
- You document income with deposits, such as self-employment: a bank statement program may fit better.
- You want a rental purchase underwritten on rent: DSCR, not this program.
- You are already taking retirement distributions: those can be counted as documented income, which is a different route than converting a balance.
Key Terms Defined
Asset qualifier: a path where eligible assets, after the credit percentages, must equal or exceed the entire loan.
Asset depletion: a path that divides usable assets by 60 months to create monthly qualifying income.
Haircut: the discount a lender applies to an asset because it is not fully liquid or carries tax and penalty costs.
Seasoning: how long funds have sat in an account before the lender will count them.
Debt-to-income (DTI): your monthly debts divided by your monthly qualifying income.
Frequently Asked Questions
Can I qualify if I am under 59½?
Yes. On the qualifier path, an IRA or 401(k) counts at 90% under 59½ and 100% after. Age changes the credit, not the eligibility, subject to underwriting.
Do I need to be retired?
No. These programs suit retirees, but also business sellers, people with inheritances or settlements, and anyone with large balances and thin documented income. The file is judged on assets, credit and the property.
Is my IRA used as collateral?
No. The property secures the mortgage. The IRA is documentation that supports repayment ability. The account stays invested in your name.
Can I combine my IRA with other accounts?
Yes. Accounts combine on both paths, so an IRA can sit alongside brokerage, savings and CD balances. Each account is seasoned and documented separately.
Does my IRA balance drop when I buy?
Not because of qualifying. Nothing is withdrawn. Your balance only changes if you choose to take a distribution for a down payment or closing costs, which is a separate decision from underwriting.
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’s asset-based mortgage in Alabama page presents the program for Alabama borrowers.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging bank statement and other alternative-documentation mortgages — P&L-only, 1099-only and asset-based paths — through a wholesale lending network. Eligibility is determined by the lender on each file. 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. Federal Register – Ability-to-Repay and Qualified Mortgage Standards
2. CNBC – How to Qualify for a Mortgage in Your Retirement
3. CFS Review – CFPB Addresses Non-QMs Under Ability-to-Repay Rule
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How Much Does a Startup Founder Need in Assets to Qualify for a Mortgage? · Can a Texas Widow Qualify for a Mortgage on Life Insurance and Retirement Assets? · Can a Florida Buyer Qualify for a Mortgage on IRA Assets Without Withdrawals?
Guides: Asset-Based Mortgage in Alabama
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.