The Quick Read: Yes, a retiree can qualify for a mortgage on savings and investments without a paycheck, because select asset-based programs either count eligible assets against the whole loan or turn them into a monthly qualifying income, and the file is still fully underwritten with account statements, credit review, and a property review.
- Path one, the asset qualifier: eligible assets must cover the entire loan. No employment or income is documented.
- Path two, asset depletion: usable assets are divided by 60 months to create qualifying income, which then runs through the debt-to-income test.
- Documents: statements, ID, credit, and property paperwork. No traditional personal-income documentation, pay stubs or employment verification.
- Alabama: Lendmire’s consumer mortgage lending is licensed in Alabama, and the program figures do not change by state. Everything is subject to underwriting.
- Rentals: a retiree buying a rental can also look at a DSCR loan, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
Does Retirement Alone Stop a Lender?
No. Retirement is not a disqualifier on its own. The lender looks at three things: whether the assets are real and seasoned, whether the credit is clean, and whether the property fits the program.
Plenty of retirees have large balances and a small documented income. Social Security and a modest pension do not look like much next to a seven-figure portfolio. Traditional underwriting reads that file as weak. Asset-based programs read it as strong.
Here is the catch. “Savings and investments alone” can mean two different things. It can mean the assets cover the whole loan. Or it can mean the assets get converted into income. Across the wholesale network, those are two separate tests with separate numbers. A borrower is qualified on one path at a time. Mixing them is the fastest way to misjudge a file.
Two Paths, Two Different Tests
The asset qualifier path asks whether your eligible assets equal or exceed the loan amount. The asset depletion path asks whether your usable assets, divided over 60 months, produce enough monthly income to carry the housing payment and other debts. Which one fits depends on how big the loan is compared with the portfolio.
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| Core test | Assets cover the entire loan | Assets divided by 60 months become income |
| Income documented | None | Derived from assets |
| Debt-to-income test | Not applied to documented income | Applied to derived income |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Credit floor | 600 minimum | The lender’s matrix |
| Best fit | Portfolio larger than the loan | Large portfolio, steady housing payment |
Every figure here is through select programs and subject to underwriting. The figures are ceilings and floors. They are not offers.
A retiree who wants to buy a $600,000 home with 20% down and holds a $900,000 portfolio is a qualifier-path candidate. A retiree who wants a $3,500,000 home at 80% loan-to-value against a $2,000,000 portfolio may need the depletion path, because the usable assets do not cover the loan outright. The second borrower is converting wealth into income. The first is simply proving the loan is already covered. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
How Each Account Type Gets Counted
Lenders do not count every dollar at face value. Each account type gets a percentage, and the percentages differ by path. Never apply one table to the other.
| Account type | Qualifier path | Depletion path |
|---|---|---|
| Brokerage or securities | 100% | 80% |
| Savings, money market, cash | 100% | 100% |
| Certificates of deposit | 100% | 100% |
| 401(k) or IRA | 90% under 59½, 100% at 59½ or older | 70% at any age |
| Private stock | Not published | 75% |
| Real-estate equity | Not published | 60% |
On the qualifier path, accounts combine. On the depletion path, several account types are not eligible: 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.
What about cryptocurrency, precious metals, collectibles, or pledged and borrowed funds? Neither path publishes them as eligible. The documented route is to convert them into a seasoned cash balance in a regulated account, with the lender reviewing the source. Do not plan around them counting at a percentage.
One more rule on the depletion path. Cash-out proceeds from the loan never count as qualifying assets.
A Worked Example: The Mostly-401(k) Retiree
This is the borrower most guides skip. Say a 58-year-old retiree wants an $800,000 loan on a principal residence. The holdings are $330,000 in brokerage accounts, $300,000 in a 401(k), and $200,000 in savings.
Run it on the qualifier path. Brokerage counts at 100%, which is $330,000. The 401(k) is under age 59½, so it counts at 90%, which is $270,000. Savings count at 100%, which is $200,000. Usable assets total $800,000, which matches the loan. The file is reviewed on assets alone, with no employment or income documented, subject to underwriting.
Wait one year and the same retiree is past 59½. The 401(k) now counts at 100%, and the cushion grows by $30,000. That is the age effect in plain terms. Under 59½, the retirement account loses ten points on the qualifier path.
The same retiree on the depletion path would see the 401(k) counted at 70%. Retirement-heavy borrowers usually do better on the qualifier path, as long as the portfolio is at least as large as the loan.
This example is illustrative. The lender’s own calculation governs.
A Worked Example: The Portfolio Retiree
Now flip the profile. A retiree holds $1,500,000 in securities and $300,000 in cash, wants a larger loan, and the assets do not cover it outright.
On the depletion path, securities count at 80%, which is $1,200,000. Cash counts at 100%, which is $300,000. Usable assets total $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income. That income then has to carry the full housing payment and other debts through the debt-to-income test.
Two minimums apply on this path, subject to underwriting. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. And when depletion is the only income source, liquid assets can never be below $250,000. A retiree with a smaller nest egg does not fit this path, however clean the credit.
Social Security or a pension changes the picture. Asset-derived income can supplement documented income up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived. A retiree with steady benefits and a mid-size portfolio often fits better here than one relying on assets alone.
What Lenders Check Beyond the Balance
Assets are the headline. They are not the whole file. Credit still matters, and the property still gets reviewed.
- Credit: the qualifier path publishes a 600 minimum score. The depletion path follows the lender’s score and loan-amount matrix. A first-time investor on the depletion path needs 700.
- Housing history: 0x30x12 is the standard. 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.
- Reserves: on the qualifier path, none are required at or below 75% loan-to-value. Above that, the lender sets them. The depletion path has no published reserve months.
None of this is a promise of approval. Each file is underwritten on its own facts.
Seasoning and Documents: Where Files Stall
Asset-based does not mean thin paperwork. The assets are documented on both paths. What drops out is income documentation.
Seasoning is where files most often stall. A retiree who sells a house or moves money between accounts a few weeks before applying often trips the rule.
- 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. Sale-of-business, inheritance and legal-settlement funds are excused from that seasoning.
A practical checklist:
1. Gather every statement for each account you plan to count, including full pages.
2. Keep large deposits explainable. A transfer between your own accounts needs a paper trail.
3. Pull your credit report early and fix errors before the file goes in.
4. Collect the property documents for the home you are buying or refinancing.
5. If Social Security or pension income will supplement the file, have the award letters ready.
Move money before the seasoning clock starts, not during it.
Why the Rules Allow Assets at All
The consumer ability-to-repay rule does not demand a paycheck. The Federal Register entry for the rule lists eight factors a lender must consider, and the first is current or reasonably expected income or assets. The assets it names include savings and checking balances, vested retirement account amounts, and stocks.
One limit applies. A law-firm summary on Consumer Finance Monitor confirms that the assets considered exclude the value of the property securing the loan. The house you are buying cannot be the asset that qualifies you for it. That matches how the programs work in practice.
Buying a Rental on Assets: The Investor Decision
A retiree with deep savings often wants a rental, not a primary home. The path then depends on the property, and the answer is not always asset-based.
DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. CFPB’s commentary to Regulation Z treats credit to buy or maintain non-owner-occupied rental property as business purpose.
For a retiree, that has a plain-English result. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Personal income is not the test. The savings show up as the down payment, closing funds and reserves, and they should stay liquid and seasoned.
Programs below 1.00 coverage are available through select lenders in the network, but leverage and terms adjust. Rent has to carry the property.
The asset depletion path can also finance an investment property, with lower leverage. On the depletion path, an investment property goes up to 65% loan-to-value on a purchase or rate-and-term refinance, and 60% on a cash-out refinance, subject to underwriting. Compare that with 80% on a purchase or rate-and-term refinance and 60% on a cash-out for a principal residence or second home on the same path. The tradeoff is real. A portfolio-funded rental loan needs more equity at closing than a home would.
So which one fits? A retiree with strong rent on a clean rental should price DSCR first. A retiree who wants to hold a property that cannot cover its own payment, or who prefers one loan type across all properties, should price both. This is a genuine toss-up on borderline-coverage properties.
Leverage by Path
Leverage is where retirees get surprised. The ceilings differ by path, by transaction and by how the property is used, so read the row that matches the file.
| Transaction | Path | Max loan-to-value |
|---|---|---|
| Purchase, principal residence or second home | Qualifier | 80% |
| Refinance, principal residence or second home | Qualifier | 75% |
| Purchase or rate-and-term, principal residence or second home | Depletion | 80% |
| Cash-out, principal residence or second home | Depletion | 60% |
| Purchase or rate-and-term, investment property | Depletion | 65% |
| Cash-out, investment property | Depletion | 60% |
On a purchase, both paths reach 80% for a principal residence or second home. The paths split on refinances: the qualifier path tops out at 75%, while the depletion path allows 80% on a rate-and-term refinance and 60% on a cash-out. Whether cash-out proceeds are allowed on the qualifier path is set by the lender and is not published. Do not assume it.
Where Alabama Retirees Fit
Alabama is one of the 16 states where Lendmire’s consumer mortgage lending is licensed. The program figures do not change by state. State facts such as taxes, insurance and local prices are context for the budget, not program parameters.
A few common Alabama retiree situations map cleanly to the paths above:
- Downsizing within the state: a retiree sells a larger home and buys a smaller one. The sale proceeds sit in a savings or brokerage account. Seasoning matters, because fresh sale proceeds need to age in the account unless an excused category applies.
- Second home on the coast or a lake: this is a second home, not an investment property, so the more generous second-home leverage applies. Occupancy must be honest. A property that is partly a rental has to be disclosed as such.
- Relocating in from out of state: the retiree may hold accounts in another state. That is fine. The accounts need to be in the borrower’s name at a regulated institution and fully documented.
If a spouse is on the loan, the picture changes. Joint accounts, a co-borrower’s credit, and one spouse with no income all affect the file.
Retirees in other states face the same mechanics. Lendmire’s piece Can a Texas Retiree Get a Mortgage on Savings and Investments Alone? walks the same two paths from a Texas angle.
When This Isn’t the Right Tool
Asset-based lending is not always the best answer. It suits specific profiles.
- Portfolio too small. Below the $250,000 liquid floor on the depletion path, the math does not work. A smaller loan or a larger down payment may.
- Mostly home equity. Real-estate equity counts at 60% on the depletion path, and the house you are financing cannot be the qualifying asset.
- Cash purchase. If the portfolio is large and the loan is small, paying cash or borrowing less may make more sense.
- Selling versus borrowing. Liquidating investments to fund a purchase can trigger taxes and lock in losses in a down market. Tax treatment varies; consult a qualified professional.
- Mostly cryptocurrency or collectibles. These must be converted to a seasoned cash balance before they count.
A retiree also has other routes, such as an agency loan using retirement income, a reverse mortgage, or a home equity line. Those are different products with their own rules. Compare them, because a lower-cost option may exist for the profile.
Step by Step: From First Call to Settlement
1. Pick the path. Match the portfolio to the loan size. Assets that cover the loan point to the qualifier path. A larger loan against a big portfolio points to depletion.
2. Inventory the accounts. List each account, its type, and its owner. Remove anything on the ineligible list.
3. Check seasoning. Confirm the 60-day or 120-day clock is satisfied for each account.
4. Review credit. Pull the report and check the score against the path’s floor.
5. Submit the file. Provide statements, ID, credit authorization, and property documents.
6. Underwriting review. The lender verifies the assets, reviews the property, and applies its own calculation. The lender’s math governs, not an illustration.
7. Settlement. Disclosures apply to this consumer mortgage, and the final reconciliation follows the lender’s instructions.
Key Terms Defined
Seasoning: the length of time money must sit in an account before a lender will count it.
Haircut: the share of an account’s balance that a lender does not count, which is why a 401(k) rarely counts dollar for dollar.
Qualifying income: the monthly figure a lender uses to judge repayment. On the depletion path it is usable assets divided by 60 months.
Debt-to-income ratio: monthly debts, including the new housing payment, compared with monthly qualifying income.
Reserves: liquid money left over after the down payment and closing costs.
Business-purpose loan: a loan taken to buy or hold a rental or other investment, reviewed differently from an owner-occupied mortgage.
Frequently Asked Questions
Do I have to sell my investments to qualify?
No. Eligible assets are counted by their balances, not by selling them. You keep the accounts. The lender needs statements that show the balances are real and seasoned. Money you set aside for down payment and closing funds still needs to remain documented.
Can I use my IRA or 401(k)?
Yes, with a haircut. On the qualifier path, retirement accounts count at 90% under age 59½ and 100% at 59½ or older. On the depletion path, they count at 70% at any age. Both are subject to underwriting.
Does my age count against me?
Retirement status alone is not a disqualifier. The file is judged on assets, credit and the property. Age affects only how a retirement account is counted on the qualifier path, because the 90% treatment moves to 100% once the borrower reaches 59½.
Do I need traditional personal-income documentation, pay stubs or an employer letter?
No. Neither path asks for traditional personal-income documentation, pay stubs or employment verification. The assets are documented with statements, and the file is fully underwritten on credit, the property and the assets.
Can I combine Social Security or a pension with my assets?
Yes, on the depletion path. Documented benefits help a borrower whose portfolio is mid-sized.
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 programs based on your statements, the property, credit profile, leverage, and your goals. Lendmire is a broker that places these loans through select lenders in its wholesale network. Qualification is subject to underwriting and is not a commitment to lend.
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.
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References
1. Federal Register: Ability-to-Repay and Qualified Mortgage Standards Under the Truth in Lending Act
2. Consumer Finance Monitor: CFPB Finalizes Ability-to-Repay and Qualified Mortgage Rules
3. CFPB: Regulation Z, Section 1026.3 Exemptions
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 Alabama Tech Employees Paid in Stock Get a Mortgage on Assets · Can a New Mexico Retiree Get a Mortgage on Savings and Investments Alone? · Can a Pennsylvania Landlord in Retirement Get a Mortgage on Rents and Savings?
Guides: Asset-Based Mortgage in Alabama
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.