The Quick Read: Asset depletion income on a North Carolina mortgage is a qualifying figure, not money you spend: the lender takes your verified liquid assets, counts only the share its guidelines allow for each account type, divides that total by 60 months, and tests the result against the housing payment and other debts through the debt-to-income test. Some borrowers never need that conversion, because the asset qualifier path only asks that eligible assets cover the entire loan.
- Two paths exist, and a borrower is qualified on one at a time: assets cover the whole loan, or assets become monthly income.
- On the depletion path, the usable total is divided by 60 months, so $1,500,000 of usable assets produces $25,000 of monthly qualifying income.
- Each account type counts at a different percentage, and the percentages differ by path.
- The assets stay in your accounts. The division is an underwriting convention, not a withdrawal schedule.
- Figures here are ceilings and floors through select programs, subject to underwriting. They are not offers.
Who Uses This, and Which Path Fits?
The right path depends on one comparison: do your eligible assets exceed the whole loan, or do they only support it? The asset qualifier path suits borrowers whose assets cover the entire balance. The asset depletion path suits borrowers whose assets are large but fall short of the loan.
Typical North Carolina borrowers on these paths hold large balances and report little income. They include retirees living on a portfolio and people who sold a business. Others have received an inheritance or settlement. Some are early-retired professionals. Others are relocators bringing savings into the state.
Across Lendmire’s wholesale network, the dividing line is simple. The qualifier path documents no employment or income, and the lender’s review rests on the assets. The depletion path converts assets into income and runs that income through the debt-to-income test.
Scotsman Guide describes this kind of program as one that turns idle brokerage and retirement balances into attributed income. Non-QM loans made up about 5% of recent mortgage originations, per Scotsman Guide citing CoreLogic.
Consumer mortgage lending through Lendmire is licensed in 16 states, North Carolina among them. Lendmire is the broker. Select lenders in its network review and underwrite each file.
How Asset Depletion Income Is Calculated Step by Step
The calculation runs in six steps, and the order matters. Inventory the assets, apply the percentage for each type, remove funds the purchase itself consumes, divide by 60, run the result through the debt-to-income test, and document everything.
1. Inventory eligible assets. List each account in your own name: cash, certificates of deposit, securities, private stock, retirement accounts, and equity in real estate other than the home being financed. Accounts that are not eligible are dropped here.
2. Apply the percentage for each asset type. Cash counts in full. Market-exposed and retirement balances count at a reduced share, shown in the tables below.
3. Account for funds the purchase uses. Money that goes to the down payment or closing costs generally cannot also be counted as income-producing assets. The lender’s own calculation governs the treatment.
4. Divide by 60 months. The usable total divided by 60 is the monthly qualifying income.
5. Run that income through the debt-to-income test. The derived income has to carry the proposed housing payment and your other debts.
6. Document the assets. The assets are documented on both paths. “No income documentation” never means “no documentation.”
Here is the sanctioned illustration of the arithmetic. A borrower holds $1,500,000 in securities, which count at 80%, or $1,200,000. The borrower also holds $300,000 in cash, which counts at 100%. Usable assets total $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income. The lender’s own calculation governs the real file, and this example is illustrative only.
Many borrowers misread what happens next. Qualifying income is not a payment budget. It must carry the full housing payment and every other monthly debt through the debt-to-income test. That is why a larger asset pool does not automatically mean a larger purchase.
What Counts, and at What Percentage?
Each path has its own table, and the two never blend. Match the table to the path you are on.
Asset qualifier path (share of the balance that counts):
| Asset | Counts at |
|---|---|
| Brokerage accounts | 100% |
| Certificates of deposit | 100% |
| Money market | 100% |
| Savings | 100% |
| 401(k) / IRA, under age 59½ | 90% |
| 401(k) / IRA, 59½ or older | 100% |
Accounts combine on the qualifier path. Eligible assets, after those percentages, must equal or exceed the entire loan amount.
Take an $800,000 loan. The borrower has $330,000 in brokerage accounts, which count at 100%, or $330,000. The borrower also has $300,000 in a 401(k) under age 59½, which counts at 90%, or $270,000. Add $200,000 in savings, which counts at 100%, or $200,000. Together that is $800,000 of usable assets, so the borrower is reviewed on assets alone, subject to underwriting.
Asset depletion path (share of the balance that counts):
| Asset | Counts at |
|---|---|
| Cash accounts | 100% |
| Certificates of deposit | 100% |
| Securities | 80% |
| Private stock | 75% |
| Retirement accounts, any age | 70% |
| Real-estate equity | 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. Cash-out proceeds from the same transaction never count as qualifying assets.
The federal ability-to-repay rule, Regulation Z section 1026.43, lets a lender rely on income, assets, or both, excluding the value of the dwelling that secures the loan. In practice, equity in the home you are buying cannot be the asset. Equity in other real estate can count on the depletion path, at 60%.
How Much Does the Asset Mix Move the Number?
The mix moves the number a great deal. Take the same $1,500,000 in raw balances and change only where it sits. The depletion-path result ranges from $15,000 to $25,000 of monthly qualifying income. The table uses the same percentages and the same 60-month divisor.
| $1,500,000 held entirely in | Usable | Monthly income |
|---|---|---|
| Cash accounts | $1,500,000 | $25,000 |
| Securities | $1,200,000 | $20,000 |
| Private stock | $1,125,000 | $18,750 |
| Retirement accounts | $1,050,000 | $17,500 |
| Real-estate equity | $900,000 | $15,000 |
Two lessons follow. First, moving a portion of a portfolio into a seasoned cash balance can raise qualifying income, though the lender reviews the source of those funds. Second, two borrowers with identical net worth can land far apart on the same file.
Across Lendmire’s wholesale network, the pattern is consistent. Files lean on the account statements, so borrowers with many small accounts or recent transfers tend to need the most explanation. A clean, seasoned paper trail often matters more than the headline balance.
When Does the Qualifier Path Beat Depletion?
The qualifier path beats depletion whenever your eligible assets, after percentages, cover the whole loan. It counts more of your balances. Retirement money counts at 90% under age 59½ and 100% after, against 70% at any age on the depletion path. It also needs no debt-to-income calculation, and no reserves are required at or below 75% loan-to-value.
The tradeoff is scope. The qualifier path covers principal residences and second homes only. Investment property is available only on the depletion path.
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| Core test | Assets cover entire loan | Income from assets passes DTI |
| Leverage on a purchase | Up to 80% | Up to 80% (65% on investment property) |
| Leverage on a refinance | Up to 75% | Up to 80% rate-and-term; 60% cash-out |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Investment property | Not available | Available |
On the depletion path, the 80% and 60% figures apply to a principal residence or second home. An investment property is limited to 65% on a purchase or rate-and-term refinance and 60% on a cash-out refinance. Cash-out on the qualifier path is set by the lender and is not published, so no figure is stated here.
The depletion path has minimums as well. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When asset depletion is the only income source, at least $250,000 must also be liquid. A first-time investor on this path needs a 700 score.
Where the General Rule Breaks
The 60-month formula is the rule. A handful of named situations bend it.
Retirement accounts. Age changes the answer on the qualifier path, where the percentage rises from 90% to 100% at 59½. On the depletion path, retirement accounts count at 70% at any age. Tax treatment varies, and a qualified tax professional is the right person to ask about retirement balances.
Crypto, metals, collectibles, and pledged funds. None of these is 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. Business accounts count only for the borrower’s ownership share, and borrowed or pledged funds do not count.
Seasoning rules. The qualifier path wants 60 days of seasoning and two months of statements for each qualifying account. The depletion path wants 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 the depletion path.
Supplementing income. Asset-derived income may add to documented income on the depletion path, up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived. A borrower with a modest pension or part-time wages can use both.
Credit and housing history. The qualifier path has a published 600 minimum score. The depletion path follows the lender’s score and loan-amount matrix. A housing history of 0x30x12 is the baseline, and one 30-day late in the last twelve months is considered case by case. A housing event needs 4 years of seasoning on the depletion path. Multiple bankruptcies are not eligible.
The agency contrast. Fannie Mae’s Selling Guide section on assets as qualifying income limits its method to purchases and limited cash-out refinances. It covers principal residences and second homes only, and it caps loan-to-value at 70%, or 80% if the asset owner is 62 or older. It also subtracts early-distribution penalties. That is the agency’s rule, not this program’s. On a principal residence or second home purchase, the depletion path through Lendmire’s network allows up to 80%, and it also reaches investment property.
Does North Carolina Change the Math?
North Carolina does not change the calculation. Program figures are the same in every state where Lendmire is licensed. The state shows up elsewhere, in the housing payment the derived income must carry.
Property taxes, homeowners insurance, and HOA dues vary by county and by property. Coastal and mountain homes often carry extra insurance and association costs. The debt-to-income test counts all of these, so a purchase that looks affordable on the price can fail on the full monthly obligation. Run the whole housing payment, not just principal and interest, before choosing a price range.
Relocators face a documentation question more than a math question. Assets moved from out of state should be in your name, statements should show a clear history, and large transfers need an explanation. Foreign funds are not eligible on the depletion path.
If You Are Buying a Rental Instead
Most investment purchases belong on a different track. 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 loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Lendmire’s complete DSCR loans guide covers that route.
Asset depletion on an investment property is the narrower option. It is limited to 65% on a purchase and 60% on a cash-out. It runs through personal debt-to-income, so it fits only when you want the loan underwritten on your own finances. Borrowers who document income through business deposits belong in a bank statement program instead.
Key Terms Defined
Asset qualifier path: A program path where eligible assets, after percentages, must equal or exceed the whole loan, with no income documented.
Asset depletion path: A program path that divides usable assets by 60 months to produce monthly qualifying income.
Haircut: The reduction that makes only part of an asset count, such as securities counting at 80%.
Seasoning: The length of time funds must sit in an account before the lender counts them.
Debt-to-income test: The comparison of monthly debts, including the new housing payment, against monthly income.
Usable assets: The total that remains after the percentages are applied.
Common Calculation Mistakes
Most errors on these files are small and avoidable.
- Using gross balances. The lender counts only the usable share, so a $1,000,000 portfolio rarely yields $1,000,000.
- Counting down-payment money twice. Funds used for the purchase cannot also generate income.
- Confusing income with payment capacity. The derived income must carry every debt, not just the new payment.
- Mixing the two tables. A 90% retirement figure belongs to the qualifier path, and 70% belongs to the depletion path.
- Moving money late. Recent transfers add questions, and seasoning rules apply to each account.
- Using home equity from the property being bought. The rule excludes the dwelling securing the loan.
Lendmire’s piece How Asset Depletion Income Is Calculated for a Jumbo Mortgage shows how larger balances behave.
Frequently Asked Questions
Do I have to sell my investments to qualify?
No. The assets stay in your accounts, and the 60-month division is only an underwriting convention. You do not withdraw the money on a schedule. The lender does review the statements to confirm the balances are real, seasoned, and yours.
Can I qualify with no employment at all?
Yes, on either path, subject to underwriting. The qualifier path documents no employment or income at all. The depletion path produces its qualifying income from assets, with minimum assets of at least the lesser of $1,000,000 or 1.25 times the loan, and never below $250,000 liquid when assets are the only source.
Does my 401(k) count the same as cash?
No. On the qualifier path, a 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. Cash and certificates of deposit count in full on both.
What about crypto or precious metals?
They are not published as eligible on either path. The documented route is converting them to cash in a regulated account and letting the balance season. The lender reviews where the funds came from, so keep the sale records.
Is the income number the same as how much house I can afford?
No. The qualifying income must carry the housing payment and other debts through the debt-to-income test. Property taxes, insurance, and any HOA dues in the county where you buy all count. A strong pool can still cap out on a high-cost property.
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 options based on your statements, the property, credit profile, leverage, and your goals. Reach the team at 828-256-2183, or ask for a direct mortgage quote. Programs change, every file is underwritten individually, and nothing here is a commitment to lend.
For current guidelines and terms, see Lendmire’s asset-based mortgage programs page.
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.
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References
1. Scotsman Guide: Which Groups Are Driving Non-QM Lending
2. Scotsman Guide: One Out of 20 Mortgages Are Non-QM
3. CFPB Regulation Z section 1026.43
4. Fannie Mae Selling Guide B3-3.4-06
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 an Asset Depletion Mortgage Works · How Lenders Count Assets Toward an Asset Depletion Mortgage · How Asset Depletion Mortgage Eligible Assets Work on a Jumbo Loan
Guides: Asset-Based Mortgage in North Carolina
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.