The Quick Read: Neither asset-based path publishes a six-month reserve rule: the qualifier path requires no reserves at or below 75% loan-to-value, the depletion path publishes no reserve months, and your documented assets, leverage and credit decide the file through select programs, subject to underwriting.
- Qualifier path: your eligible assets must cover the entire loan, and no employment or income is documented.
- Depletion path: your usable assets are divided by 60 months into a monthly income that must carry the housing payment and other debts.
- Cash-out leverage on the depletion path: up to 60% on a principal residence, a second home or an investment property.
- Your real question: whether the six months of cash you hold is enough, and what a lender will count toward it.
Many borrowers hit this question after a sale, an inheritance or retirement. The balances are large and the paycheck is gone. A cash-out refinance on assets can work in that situation, but only if you know which path you are on.
What does “asset-based” mean for a cash-out refinance?
Asset-based means the lender reviews your file on what you own instead of what you earn. Lendmire arranges these loans through select lenders in its wholesale network. Its asset-based mortgage programs come in two forms, and you are on one at a time.
On the asset qualifier path, your eligible assets, after the credit percentages, must equal or exceed the entire loan amount. No employment or income is documented. That means no traditional personal-income documentation, pay stubs or employment verification. Every file is still fully underwritten, and the assets are proven with statements.
On the asset depletion path, the lender turns your eligible assets into monthly income. It adds up the usable balances and divides by 60 months. That income then runs through the debt-to-income test, which compares your monthly debts to your income.
Both paths serve consumer mortgages on a principal residence or a second home. Investment property is available only on the depletion path, where the loan is business-purpose. A business-purpose investor loan is reviewed differently from a standard owner-occupied mortgage.
Is six months of reserves a requirement here?
No published rule on either path sets it at six months. Reserve counts are a lender setting, so the honest answer depends on the file.
- Qualifier path: no reserves are required at or below 75% loan-to-value. Above that, the lender sets them.
- Depletion path: the program publishes no reserve months.
Across our wholesale network, individual lenders may add their own overlays, which are extra conditions on top of the program. Six months of cash is not a published program rule here, so treat it as a planning target rather than a promise.
Reserve and seasoning rules also differ widely across the wider market. SEC-filed due-diligence exhibits for securitized loan pools show programs that require minimum ownership time before a cash-out. They also show seasoning waived only when the file documents compensating factors.
The two paths side by side
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| Core test | Assets cover whole loan | Assets / 60 months = income |
| Income documented | None | Derived from assets |
| Cash-out leverage | Set by lender, not published | 60% (all occupancies) |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Credit | 600 minimum | Lender’s matrix |
| Reserves | None at 75% LTV or below | None published |
Every figure is subject to underwriting and varies by lender, property and borrower. Never blend the two columns. A qualifier-path asset figure does not carry over to the depletion path.
How does underwriting treat a cash-out, step by step?
The underwriter works through the file in a set order. Here is how it runs.
1. Pick the path. If your assets cover the whole loan, the qualifier path fits. If your balances are large but smaller than the loan, the depletion path may fit.
2. Credit review. The qualifier path has 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.
3. Housing history. The program wants 0x30x12 on housing payments. One 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. On the depletion path, a housing event needs 4 years of seasoning.
4. Asset verification. Each account is documented and then discounted by the credit percentages below.
5. Leverage test. The appraised value and your requested loan set the loan-to-value ratio. On the depletion path, a cash-out refinance tops out at 60%. That holds on a principal residence, a second home or an investment property.
6. Income and debt test (depletion only). Derived income must carry the housing payment and your other debts.
7. Reserve check. Any lender overlay is applied here, after the qualifying assets are set.
On the depletion path, cash-out proceeds never count as qualifying assets. You cannot borrow cash out and then use that same cash to qualify for the loan.
Which assets count, and at what percentage?
Eligible assets are counted at a share of their balance, and the share depends on the path. Keep the two lists apart.
Qualifier path (share counted):
- Brokerage accounts, certificates of deposit, money market and savings: 100% each
- 401(k) and IRA balances: 90% under age 59½, 100% at 59½ or older
- Combining accounts: balances across your eligible accounts add together toward the total
Depletion path (share counted):
- Cash accounts and certificates of deposit: 100%
- Securities: 80%
- Retirement accounts: 70% at any age
- Real-estate equity: 60%
The depletion path does not accept custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options, non-vested restricted stock units or funds from non-regulated financial companies.
Privately held company stock is not an eligible asset on either path. If you own part of a business, the documented route is a sale or buyout. You then hold the proceeds as a seasoned cash balance. Cryptocurrency, precious metals, collectibles, business accounts beyond your ownership share, and pledged or borrowed funds are also not published as eligible on either path. Convert them to cash in a regulated account and let the lender review the source.
Seasoning and statements: what the paper trail looks like
Seasoning is how long the money must have sat in your accounts. It stops last-minute deposits from inflating the file.
- Qualifier path: 60 days of seasoning and two months of statements for every qualifying account.
- 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 on this path.
Seasoned money is the safest money on a file. If you plan to move cash around before applying, a good rule is to do it earlier and keep the trail clean.
Worked examples: the only arithmetic you need
These examples are illustrative. The lender’s own calculation governs.
Qualifier path. Say you want an $800,000 loan. You hold $330,000 in brokerage accounts, which count at 100%, so $330,000. You hold $300,000 in a 401(k) while under 59½, which counts at 90%, so $270,000. You hold $200,000 in savings, which counts at 100%, so $200,000. The usable total is $800,000. That equals the loan, so the file is reviewed on assets alone, subject to underwriting.
Depletion path. Say you hold $1,500,000 in securities, which count at 80%, so $1,200,000. You also hold $300,000 in cash at 100%. 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 housing payment and your other debts through the debt-to-income test.
The depletion path also has asset minimums. You need qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance. If depletion is your only income source, you also need at least $250,000 in liquid assets. Asset income may also supplement documented income, up to a 45% debt-to-income ratio. In that case the minimum-assets rule is waived.
Where the general rule breaks
A few situations change the answer.
- Leverage above 75% on the qualifier path. Reserves are no longer automatic. The lender sets them, and that is where a six-month figure is most likely to appear.
- Cash-out on the qualifier path. Whether cash-out proceeds are allowed, and at what leverage, is set by the lender and is not published. Ask before you plan around it.
- Reserves and qualifying assets overlapping. Where a lender asks for reserves, ask whether the same dollars can serve both purposes. On a qualifier file, assets equal to the whole loan are already committed to qualifying.
- A retirement account under 59½. It counts at 90% on the qualifier path and 70% on the depletion path. The part that does not count can turn a file that looked fine on paper into a short one.
- Business owners. Closely held company shares do not count. A sale or buyout turns them into cash that does.
- First-time investors on the depletion path. The score requirement is 700.
- Investment property. Only the depletion path covers it, and it is capped at 65% on a purchase or rate-and-term refinance and 60% on a cash-out.
What the decision looks like in practice
Start with one question: do your eligible assets cover the whole loan? If yes, the qualifier path is the simplest fit. If no, run the depletion math: usable assets divided by 60, then the debt-to-income test.
Next, pick a leverage you can live with. A cash-out at 60% on the depletion path leaves you plenty of equity, and that matters when the lender weighs the file. Every figure here varies by lender and program, and guidelines, property type, leverage and credit profile all apply.
Last, decide what the six months of reserves are for. If they are your safety cushion, keep them out of the cash-out plan. If you want the proceeds to fund the next purchase, plan around an overlay that may require the cushion to stay in place.
Programs change, and every file is underwritten individually. These figures are ceilings and floors, never offers. Lendmire arranges these loans through select lenders and does not make the credit decision.
Key Terms Defined
Asset qualifier path: the route where eligible assets, after the credit percentages, must cover the entire loan with no income documented.
Asset depletion path: the route where usable assets divided by 60 months become qualifying income for the debt-to-income test.
Reserves: cash and liquid assets you still hold after closing, usually counted in months of your housing payment.
Seasoning: the length of time money has sat in your account, or you have owned the property, before it counts.
Loan-to-value (LTV): the loan amount divided by the appraised property value.
Debt-to-income (DTI): your monthly debts divided by your monthly qualifying income.
Overlay: an extra condition a lender adds on top of a program’s published rules.
Frequently Asked Questions
Do cash-out proceeds count as reserves on an asset-based loan?
Not as qualifying assets on the depletion path. Cash-out proceeds never count there. Whether a lender will count proceeds toward a reserve overlay is set lender by lender, so get that answer in writing before you rely on it.
Can I use a retirement account for the cash-out?
Yes, in part. 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 it counts at 70% at any age. The lender reviews the statements.
Does privately held company stock count toward assets or reserves?
No. If you sell or are bought out, the seasoned cash proceeds can count at their own percentage.
Can I use this for a rental property?
Only on the depletion path. Investment property cash-outs there are capped at 60% loan-to-value. If you would rather qualify on rent, that is business-purpose rental financing (DSCR), a different program.
Is a credit check required?
Yes. The depletion path follows the lender’s matrix, and a first-time investor on that path needs 700. Approval is never promised, and it stays subject to underwriting.
Next steps
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. The consumer program is available through select lenders in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. This is not a commitment to lend.
Investors weighing their equity options can start with Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving self-employed and high-net-worth borrowers in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. 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. SEC ABS-15G due-diligence exhibit, securitized loan pool (minimum ownership time before cash-out)
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-Based Cash-Out Refinance Requirements on a Primary Home · Asset-Based Cash-Out Refinance Lenders With Low Documentation Requirements
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.