The Quick Read: Usually, when your wealth sits in accounts and your documented monthly income is thin. Asset depletion is reviewed around what you own, not on a paycheck, while a conventional loan is reviewed around what you document as income. If a pension, Social Security, and required distributions already carry the payment, conventional may still be the cleaner route.
- Asset qualifier path: eligible assets must equal or exceed 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.
- You are qualified on one path at a time, never a blend of the two.
- Nothing is sold or pledged. The math is a qualifying convention, not a withdrawal plan.
- A true rental purchase is a different lane. That is DSCR territory, covered in Lendmire’s complete DSCR loans guide.
All figures below come through select programs in Lendmire’s wholesale network, are subject to underwriting, and are ceilings and floors, not offers. Lendmire is the broker. Select lenders review and approve.
What Does Each Route Actually Measure?
A conventional mortgage measures documented monthly income against your monthly debts. Asset depletion measures your liquid balance sheet and turns it into either full loan coverage or imputed income. Same borrower, two different yardsticks.
Picture a Montana retiree who sold a ranch business and holds a large brokerage account. Her pension is modest. On paper, her monthly income looks small next to a new payment. A conventional file reads that income and stalls. An asset-based file reads the balances.
Across the wholesale network, the pattern is consistent. Conventional underwriting was built for people with pay stubs. Retirees living on a portfolio do not look like that, even when they are far wealthier than the salaried borrower who sails through.
Conventional loans are not invisible to assets, but they lean hard on income. Under the federal framework for consumer mortgages, a lender must consider and verify income or assets plus debts, as the CFPB’s ability-to-repay compliance guide explains. Asset-based programs use that “assets” room. They are still underwritten files, and the lender still reviews your ability to repay. Rules for conventional and agency loans belong to those programs, not to this one.
The Two Asset Paths, Side by Side
The right path depends on how big your portfolio is compared with the loan. Name the path every time you see a number, because the two tables never blend.
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| How assets are used | Cover the whole loan | Become monthly income |
| Income documented | None | Derived from assets |
| Purchase leverage | Up to 80% | Up to 80% (home); 65% (investment) |
| Refinance leverage | Up to 75% | 80% rate-and-term; 60% cash-out |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Credit | 600 minimum | The lender’s matrix |
Leverage on the depletion path is 80% on a purchase or rate-and-term refinance and 60% on a cash-out refinance for a principal residence or second home. For an investment property it is 65% and 60%. Whether cash-out is allowed on the qualifier path is set by the lender and not published, so plan around the depletion figures if you need proceeds. Cash-out proceeds never count as qualifying assets.
When Asset Depletion Wins
It wins in four situations.
Documented income is the barrier, not wealth. Retirees with large balances and small distributions are the classic case. The portfolio is the strength, so the program reads the portfolio.
You want to keep your portfolio invested. Conventional loans often push borrowers to liquidate assets to build a bigger down payment, which can trigger sales you did not plan. Asset depletion does not require liquidating anything. You still need cash for the transaction itself, and that money comes out before the math runs.
Your money is mostly in one account type. Under the qualifier path, brokerage, certificates of deposit, money market, and savings count at 100%. A retirement account counts at 90% under age 59½ and 100% at 59½ or older. That is a generous reading for someone whose wealth sits in an IRA.
The loan is large. Qualifier-path loans reach $4,000,000 through select programs, subject to underwriting. High balances are where income-based files strain hardest.
When Conventional Wins
Conventional wins when your documented income already carries the payment. Consider a retiree who draws Social Security, a pension, and required distributions. The IRS says required minimum distributions generally must start at age 73 for traditional IRAs and workplace plans. Those distributions are real, recurring, documented income. Add them to the rest and the file may qualify the ordinary way.
Check conventional first. It is an honest rule. If the income works, you rarely need a specialty path, and the asset-based programs carry stricter asset minimums and seasoning that a plain income file avoids. This is a toss-up in some cases, so run both before you commit.
Asset depletion can also supplement documented income. Asset-derived income may add to your documented income up to a 45% debt-to-income ratio, and when it supplements, the minimum-assets rule is waived, subject to underwriting. That blend is useful when income is close but not quite enough.
The Math, Using the Sanctioned Shapes
These examples are illustrative. The lender’s own calculation governs.
Asset qualifier path. Say you want an $800,000 loan. You hold $330,000 in brokerage accounts (100% counts, so $330,000), $300,000 in a 401(k) while under 59½ (90% counts, so $270,000), and $200,000 in savings (100%, so $200,000). Usable assets total $800,000. That equals the loan, so you qualify on assets alone. No employment or income is documented.
Asset depletion path. Say you hold $1,500,000 in securities (80% counts, so $1,200,000) and $300,000 in cash (100%). Usable assets are $1,500,000. Divide by 60 months and you get $25,000 of monthly qualifying income. That income then carries the housing payment and other debts through the debt-to-income test.
Notice the difference. The first retiree needs assets that match the loan. The second needs assets large enough to produce income. Neither involves selling a share.
Which Assets Count
The percentages depend on the path.
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Cash, savings, money market | 100% | 100% (cash accounts) |
| Certificates of deposit | 100% | 100% |
| Brokerage / securities | 100% | 80% |
| Private stock | Not listed | 75% |
| 401(k) / IRA | 90% under 59½; 100% at 59½+ | 70% at any age |
| Real-estate equity | Not listed | 60% |
Not eligible 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.
Cryptocurrency, 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.
One practical point: if most of your wealth is retirement money and you are under 59½, the qualifier path counts it more generously than the depletion path does. Age matters on one path and not the other.
Seasoning, Credit, and Minimums
Assets are documented on both paths. “No income documentation” never means no documentation.
On the qualifier path, funds need 60 days of seasoning, with two months of statements for each 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, which helps a retiree who just sold a company.
On credit, the qualifier path has a 600 minimum score. The depletion path follows the lender’s matrix. A first-time investor on the depletion path needs 700. Housing history is 0x30x12, with one 30-day late in the last twelve months considered case by case. Multiple bankruptcies are not eligible, and a housing event needs 4 years of seasoning on the depletion path.
The depletion path also sets a minimum: qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 liquid when asset depletion is your only income source. On the qualifier path, reserves are not required at or below 75% loan-to-value. Above that, the lender sets them.
What About the Montana Part?
Program figures do not change by state. A Montana borrower sees the same percentages and floors. Lendmire’s consumer mortgage lending is licensed in 16 states, and Montana is one of them. Local prices, taxes, and insurance are context for your budget, not program parameters, so keep them out of the qualifying math.
One scenario worth naming: a retiree moving to Montana with assets held elsewhere. Balances in regulated U.S. accounts can count. Foreign funds are not eligible on the depletion path. Another: a second home. Second homes use the same leverage as principal residences on the depletion path.
Occupancy Decides the Lane
Here is where retirees get tripped up. Asset depletion is a consumer mortgage for a home you will live in, or a second home. A rental bought as a business is a different product.
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. A DSCR file qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Your portfolio then shows up as credit strength and reserves, not as income.
The line is narrower than it sounds. The CFPB’s Regulation Z provision on exempt transactions treats credit for non-owner-occupied rentals as business-purpose. If you plan to use the property yourself, it may not qualify as a pure rental. Many retirees assume one product covers both their home and their rentals. It does not.
Asset depletion on an investment property exists, at lower leverage: 65% on a purchase or rate-and-term refinance and 60% on a cash-out, per the depletion path. If rent covers the payment with room to spare, DSCR is usually the more natural fit. If rent coverage is weak, asset depletion on an investment property is worth a look. Programs below 1.00 coverage are available through select lenders in the network, though leverage and terms adjust.
Common Mistakes
- Assuming one product covers both home and rental. It does not. Choose the path by the property’s use.
- Mixing the two tables. A retirement account counts at 90% or 100% on one path and 70% on the other. Name the path first.
- Moving money right before you apply. Fresh deposits fall short of seasoning. Move funds early.
- Counting crypto or borrowed funds. They are not published as eligible. Convert and season them.
- Thinking you must sell the portfolio. You do not.
- Treating it as a reverse mortgage. It is a standard purchase or refinance, with a monthly payment, qualified differently.
Tax treatment varies; consult a qualified professional.
Key Terms Defined
Asset qualifier: A path where eligible assets cover the entire loan and no income is documented.
Asset depletion: A path where usable assets divided by 60 months become qualifying monthly income.
Haircut: The share of an asset’s value that does not count toward qualifying.
Seasoning: How long funds have sat in your account before the lender will use them.
Debt-to-income (DTI): Your monthly debts divided by your monthly income.
DSCR: Debt service coverage ratio, used on rentals, comparing the property’s rent to its payment.
A Three-Step Self-Check
1. Test conventional first. Add pension, Social Security, required distributions, and documented rents. If that income carries the payment, you may not need a specialty path.
2. Total your eligible assets by path. Apply the percentages above to each account. Compare the result with the loan for the qualifier path, and divide by 60 for the depletion path.
3. Name the property’s use. A home you will occupy points to asset-based. A true rental points to DSCR.
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.
Frequently Asked Questions
Do I have to sell my investments to use asset depletion?
No. Nothing is sold or pledged. The assets are counted to build a qualifying figure, either matching the loan or producing monthly income. You still need cash for the down payment and closing costs, and that money comes out before the math runs.
Can I use both asset paths on the same loan?
No. A borrower is qualified on one path at a time. Pick the path that fits your balances, then use that path’s percentages. Mixing them would double count and the lender will not blend the tables.
Do retirement accounts count?
Yes, at different weights by path. On the qualifier path, 401(k) and IRA balances count at 90% under age 59½ and 100% at 59½ or older. On the depletion path, retirement accounts count at 70% at any age. All of this is subject to underwriting.
Can required distributions help me qualify?
Yes, when documented. Required distributions are recurring income, and asset-derived income can supplement documented income up to a 45% debt-to-income ratio. Roth IRAs have no lifetime required distribution for the original owner, so they add nothing to documented income.
Does asset depletion work for a rental property?
It can, at lower leverage on the depletion path: 65% on an investment-property purchase and 60% on a cash-out. For most true rentals with solid rent coverage, a DSCR loan is the more natural fit. Qualification is subject to lender guidelines, credit approval, and property review.
Lendmire’s asset-based mortgage in Montana page presents the program for Montana borrowers.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps self-employed and high-net-worth borrowers in 16 states qualify on bank statements, a profit-and-loss statement, 1099s or liquid assets instead of tax returns, through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and its guidelines. 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. CFPB – ATR/QM Small Entity Compliance Guide
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 Asset Depletion Mortgage Eligible Assets Work on a Jumbo Loan · Asset Depletion Mortgage vs HELOC on a Paid-Off Home · How Much Can a Retiree Borrow on a Jumbo Loan Using Asset Depletion?
Guides: Asset-Based Mortgage in Montana
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.