The Quick Read: Lenders turn a portfolio into monthly qualifying income by taking eligible liquid assets, discounting retirement funds, subtracting the money needed to close, and dividing what remains by a fixed number of months, which on the asset allowance path through select wholesale programs is 36, 60 or 84 depending on the file. You never have to sell the assets or draw them down. The result is a qualifying figure, not a withdrawal schedule.
- The divisor is the biggest lever. Dividing by 36 months produces roughly 2.3 times the monthly income that 84 months does from the same pool.
- Retirement accounts count at 70% of their balance, or 80% at age 59.5 and older. Business funds, gifts, unvested stock and cryptocurrency never count.
- Loans above $3,500,000 use the 84-month divisor, and any loan above $4,000,000 is reviewed case by case before submission.
- Asset allowance applies to primary residences and second homes only. Investment property qualifies through other paths.
- An assets-only path skips the debt-to-income test entirely when liquidity covers the loan, closing costs and a cushion.
All program figures here describe typical guidelines through select wholesale programs, subject to full underwriting. Nothing here is a commitment to lend.
Who This Method Is Built For
Asset depletion is built for borrowers whose balance sheet says more than their tax return does. Think of a founder who just sold a company, a physician with a large brokerage account, or a retiree living off a portfolio. Their taxable income after write-offs and depreciation can look thin next to a jumbo-size loan request.
A traditional income test punishes that profile. Asset depletion reads the same borrower through liquid assets instead. Lendmire, a mortgage broker, shops this method across several wholesale programs, and the mechanics differ more than most borrowers expect. Two lenders can look at the same statements and land on very different monthly figures.
Self-employed borrowers with heavy business deposits but modest personal investment accounts often fit a bank-statement path better. In that path, qualifying income comes from 12 or 24 months of deposits after an expense ratio. Asset depletion is the right tool when the portfolio is the strong document, not the deposit history.
How Asset Depletion Income Is Calculated, Step by Step
The calculation runs in six steps. Each one narrows the number, so skipping any of them overstates what a lender will use.
1. Inventory the eligible assets. Checking, savings, money market, brokerage and retirement accounts can count. Home equity does not count, and neither do business funds, gifts, most trusts, unvested stock or cryptocurrency.
2. Verify with statements. Recent account statements are the proof. Underwriters look at ownership, whether the funds are borrowed or pledged, and any large recent deposits that need explaining.
3. Apply the asset-type discount. Cash and brokerage balances are liquid and documented by statements. Retirement accounts count at 70%, or 80% for a borrower 59.5 or older, because of tax and market-swing risk.
4. Set aside the money the deal needs. The down payment, closing costs and required reserves come out first. The same dollars cannot serve as closing funds and as the income pool.
5. Divide by the program’s depletion period. On the asset allowance path, that is 36, 60 or 84 months, depending on the debt-to-income level and loan size.
6. Use the result in qualification. The monthly figure either sits beside other documented income in a debt-to-income test or, on the standalone version, carries the file by itself.
After that, normal underwriting continues. Credit, housing history, the appraisal and reserves are all still reviewed. Asset depletion changes how income is measured, not whether the file is examined.
Why the Divisor Moves the Number So Much
The same net pool divided by a shorter period produces proportionally more monthly income. Nothing else in the formula swings the result as hard. Here is how the three asset allowance divisors compare on identical assets.
| Divisor | When it applies | Income vs. 84 months |
|---|---|---|
| 36 months | Supplemental; DTI at or below 60% | About 2.3x |
| 60 months | Supplemental; DTI above 60% | About 1.4x |
| 84 months | Standalone, or any loan above $3.5M | Baseline (1.0x) |
Supplemental means the asset income is added to other documented income, such as business deposits or a pension. Standalone means the asset income is the only qualifying income on the file. Loans above $3,500,000 use the 84-month divisor, and loans above $4,000,000 are reviewed case by case before submission.
The practical lesson is that a larger loan gets a longer divisor, so asset requirements grow faster than the loan does. A borrower who clears comfortably at a smaller size may find the same portfolio thin at a larger one. Run the same assets through each divisor before you pick a price point.
Market-wide, lenders choose their own depletion periods. The SEC-hosted due-diligence filing on a reviewed asset program notes that the federal rules give no definitive method for this. Creditors set their own standards and can change them over time. That is why one portfolio can produce several different answers.
Which Assets Count and How
Liquidity and ownership decide what counts. If you cannot sell it or withdraw it without a restriction, a lender usually will not credit it.
| Asset | Treatment | What the file needs |
|---|---|---|
| Checking and savings | Counts as liquid | Consecutive statements |
| Brokerage accounts | Counts as liquid | Statements; U.S. liquid assets |
| Retirement accounts | 70%; 80% at 59.5+ | Statements showing access |
| Revocable living trust | Counts | Trust documentation |
| Business funds, gifts | Never counts | Not eligible |
| Unvested stock, crypto | Never counts | Not eligible |
A trust other than a revocable living trust does not count. Co-borrower and joint accounts need clean ownership documentation.
Tax treatment can depend on how the funds are used and how the property is held, so keep clear records and speak with a qualified tax professional before relying on any deduction.
Allowance or Assets-Only: Which Path Fits?
The program offers two ways to use assets. They answer different questions, and the right one depends on your other income and the loan size.
| Factor | Asset allowance | Assets-only |
|---|---|---|
| Income test | Divisor result enters DTI | No DTI test |
| Liquidity needed | Pool sized by divisor | Loan plus closing costs plus 60 months of net loss on other residential property |
| Occupancy | Primary and second homes | Confirm program by file |
| Leverage | 80% maximum | Set by the size ladder |
Assets-only is blunt. U.S. liquid assets must equal the loan amount, the closing costs, and sixty months of any net loss on other residential property you own. Borrowers with a rental portfolio that loses money on paper feel that last term. Borrowers with unleveraged, cash-heavy balance sheets often find this path simplest.
The allowance path asks for less liquidity but leaves you inside a debt-to-income test. On the supplemental tiers, the 36-month divisor applies when the file’s DTI is at or below 60% and the 60-month divisor applies above 60%, as the program defines it. Your other debts and documented income decide which tier you land in.
Where the General Rule Breaks
A big portfolio does not automatically qualify. These are the situations where the usual math stops working.
Reserves and income are separate tests. Assets can satisfy the reserve requirement and still fall short on the income calculation. Reserves run 3 months of the payment on loans to $500,000, 6 months to $1,500,000 and 9 months above that. Loans above $4,000,000 are reviewed case by case before submission. Each additional financed property adds 2 months, up to a 12-month maximum, and first-time investors need 12 months. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Cash-out cannot do double duty. Above the super-jumbo line (above $3,500,000 on a primary residence and $3,000,000 on a second home), cash-out proceeds cannot satisfy reserves. Do not count money you plan to pull out of the property as the cushion behind it.
The same dollars cannot be counted twice. If the down payment comes out of the brokerage account, the pool shrinks by that amount before division. Many first-pass estimates miss this.
Investment property is a different lane. Asset allowance is for primary residences and second homes. A rental purchase typically moves to a rent-based path, where the property’s income covering its payment drives qualification. Lendmire’s complete DSCR loans guide walks through that path. The two methods answer different questions and are not interchangeable.
Super-jumbo overlays tighten everything. Above the super-jumbo line, expect a 700 credit floor, a 0x30x24 housing history, 48 months of seasoning after any credit event, and U.S. citizen or permanent resident status. Rural property and non-occupant co-borrowers are out.
Credit floors rise with size. The portfolio non-QM program starts at a 660 floor, the bank portfolio jumbo program at 680, and both move to 700 above the super-jumbo line.
What the Federal Rules Say (and Leave Open)
The rule that governs this is flexible about assets and silent about math. The CFPB’s Regulation Z ability-to-repay provision lets a lender base its repayment decision on income, on assets other than the home being financed, or on both. It names savings, checking, vested retirement funds, stocks and bonds as examples, and requires verification through reliable third-party records.
It does not prescribe a divisor or a discount. That gap explains the program-by-program variation above, and it means a generic online estimate can only approximate. The program’s own guidelines set the real figure.
What the Decision Looks Like in Practice
Picture a founder buying a primary residence after selling a business. Taxable income is low, but liquid assets are large. The path is asset allowance with the 84-month divisor if the loan sits above $3,500,000, or a shorter divisor if the loan is smaller and the file’s DTI allows it.
Leverage on a primary-residence purchase steps down with size. It runs 90% through $1,000,000, 85% to $2,000,000, 80% to $3,000,000, and 75% to $4,000,000 at the top credit tier. Above that size, every figure is case by case before submission, on review. Second homes run about five points lower at every size. The asset path itself caps at 80%.
Before you pick a path, run three checks:
1. Does the net pool, after closing funds and reserves, clear the divisor you will land in?
2. Which assets will the lender actually count, given the retirement discount and the excluded categories?
3. Would a bank-statement path, using deposits instead, produce a better answer?
The stronger play is often to compare both. Lendmire’s piece How Residual Income Shifts the Divisor on an Asset Depletion Mortgage covers one lever that can change the answer.
One broker-level observation holds across files. The estimate a borrower brings in is usually the gross portfolio balance. The estimate that holds up after underwriting is the net pool, after discounts and closing funds, divided by the divisor the loan size actually triggers. The gap between those two numbers is where most surprises come from.
Key Terms Defined
Asset depletion: A qualification method that converts liquid assets into a monthly income figure for underwriting, without requiring you to spend the assets.
Divisor: The number of months a lender divides the net asset pool by to get monthly income.
Net pool: Eligible assets after discounts and after setting aside the down payment, closing costs and reserves.
Supplemental income: Asset-derived income that is added to other documented income in a debt-to-income test.
Standalone income: Asset-derived income that carries the file with no other income documented.
Debt-to-income (DTI): Monthly debts divided by monthly qualifying income, expressed as a percentage.
Super-jumbo: A loan size above roughly $3,500,000 on a primary residence or $3,000,000 on a second home, where stricter overlays begin.
Frequently Asked Questions
Do I have to sell investments or withdraw the money to qualify?
No. The calculation is a qualifying formula, not a withdrawal plan. Your portfolio stays invested, which means you avoid selling positions and keep the funds working. Underwriting still verifies the accounts with statements.
Can I combine asset income with other income?
Yes, on the supplemental path. Documented income such as business deposits or a pension sits beside the asset-derived figure in the debt-to-income test. The 36-month tier applies when the file’s DTI is at or below 60%, and the 60-month tier applies above that.
Do retirement accounts count the same as cash?
No. Retirement balances count at 70%, or 80% for a borrower 59.5 or older, because of tax and market risk. The account must be accessible, and the statements need to show it.
Does home equity count toward the pool?
No. Equity in the property being financed or in other real estate does not count as liquid assets. The federal rule itself excludes the value of the securing dwelling from the asset test.
Can I use asset depletion to buy a rental?
Not through the asset allowance, which covers primary and second homes only. Rental purchases typically qualify on the property’s rental income covering its payment, subject to lender guidelines. That is a separate path from asset depletion.
Compare Your Options
If you are financing a high-balance property on your assets rather than income documents and want to see how the numbers work, Lendmire can help you compare super jumbo asset-qualification options based on your liquid assets, the property, credit profile, leverage, and your goals. Consumer mortgage lending is available in 16 states: AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA and WA. Programs change, and every file is underwritten individually.
The lasting takeaway is simple. The divisor your loan size triggers matters more than the size of your portfolio.
About Lendmire
Lendmire (NMLS# 2371349), a non-QM mortgage broker serving investors in 41 markets including Washington, D.C., helps structure DSCR scenarios commonly evaluated around a property’s rental income rather than personal income paperwork, subject to lender guidelines. A Scotsman Guide Top Mortgage Workplace in 2025 and 2026, Lendmire places loans through wholesale investor lenders and is not a direct lender.
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References
1. SEC EDGAR – ABS-15G due-diligence filing
2. CFPB – Regulation Z § 1026.43
This article is part of Lendmire’s super jumbo bank statement loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How K-1 Partners Qualify for a Jumbo Mortgage With Bank Statements · How P&L Only Income Is Calculated for a Jumbo Mortgage · How to Document a Jumbo Bank Statement Mortgage
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.