The Quick Read: Usually when the retiree holds large, accessible savings but little documented income, and the loan has to be underwritten as a personal mortgage rather than a rental loan. A conventional mortgage tends to win when pensions, Social Security, annuities, or required distributions already carry the payment on paper. Asset-based files run on one of two paths, and the lender’s own calculation governs either one.
- Asset qualifier path: eligible assets must cover the entire loan, and no income is documented.
- Asset depletion path: usable assets divided by 60 months become qualifying income, which then runs through the debt-to-income test.
- Conventional wins when documented retirement income already clears the debt-to-income test.
- Asset-based wins when the portfolio is large and the paper income is thin.
- A pure rental purchase usually points to a DSCR loan instead, since that loan reads the property’s rent.
What Is the Real Difference Between the Two Loans?
A conventional mortgage asks whether your income is stable and large enough to carry the payment. An asset-based mortgage asks whether your balances are large enough to carry it. The first reads a tax return and pay history. The second reads account statements.
Retirees often fail the first test without being poor. A household living on a brokerage account might report modest taxable income because it is drawing down principal, not earning wages. Conventional underwriting stresses income stability, adequacy, and continuance, as Fannie Mae’s income assessment chapter shows. A retiree with $2 million in the market and a small reported income can look weak on that paper.
Federal law does not treat that as a loophole problem. The ability-to-repay rule lets a creditor consider “current or reasonably expected income or assets” other than the home that secures the loan, per Cornell’s Legal Information Institute. Assets are a legitimate basis for repayment.
Asset-based loans placed through Lendmire’s wholesale network are consumer mortgages for principal residences and second homes. Investment property is available only on the depletion path. Consumer lending runs in 16 states, and Ohio is one of them. Program figures do not change by state.
How Do the Two Asset Paths Work?
Across the wholesale network, the asset qualifier path is the cleaner file when the balances are big enough. The asset depletion path is the flexible one. A borrower sits on one path at a time, never both.
Asset qualifier path. Eligible assets, after the credit percentages, must equal or exceed the entire loan amount. No employment or income is documented. Through select programs, leverage runs up to 80% on a purchase and 75% on a refinance, for loans up to $4,000,000, subject to underwriting. The credit floor is 600.
Asset depletion path. The lender applies haircuts to your assets, adds them up, and divides by 60 months. That figure is your monthly qualifying income. It must carry the full housing payment and other debts through the debt-to-income test. Loans run from $125,000 to $3,500,000. Leverage on a principal residence or second home reaches 80% on a purchase or rate-and-term refinance and 60% on a cash-out. On an investment property it is 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Credit follows the lender’s matrix, and a first-time investor on this path needs 700.
Here is the sanctioned shape of the math, illustrative only. Say a borrower holds $1,500,000 in securities and $300,000 in cash. Securities count at 80%, which is $1,200,000. Cash counts at 100%, which is $300,000. Usable assets total $1,500,000. Divide by 60 months and the result is the qualifying monthly income.
Which Assets Count, and at What Value?
The two paths value the same account differently, so name the path before you quote a figure. Treat this table as the network’s typical treatment, subject to underwriting.
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Brokerage accounts | 100% | Securities 80% |
| CDs | 100% | 100% |
| Money market / savings | 100% | Cash accounts 100% |
| 401(k) / IRA | 90% under 59½, 100% at 59½+ | 70% at any age |
| Private stock | Not listed | 75% |
| Real-estate equity | Not listed | 60% |
Some assets do not count 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. Crypto, 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 more point. Retirement balances matter more here than people expect. A retiree under 59½ with a large 401(k) does better on the qualifier path, at 90%, than on the depletion path, at 70%. Over 59½, the qualifier path counts the account in full.
Can an Ohio Retiree Qualify Conventionally First?
Often, yes. Check this before anything else.
Income need not come from full-time work. Retirement benefits, interest, dividends, and trust income can count, as the CFPB’s ATR/QM compliance guide explains. Social Security, pensions, and annuities are documented income. If those lines, plus any documented distributions, carry the payment, the conventional route is usually the first one to price.
Run the quick test. Add up the documented monthly income. Compare it with the proposed housing payment plus existing debts. If the debt-to-income picture works, a conventional file is simpler and keeps your assets out of the calculation. If it doesn’t, you are in asset-based territory.
Asset-based income can also supplement documented income. On the depletion path, derived income can add to documented income up to a 45% debt-to-income ratio, and when it supplements, the minimum-assets rule is waived.
When Does the Asset Loan Win?
It wins in five situations. Each is a file mechanic, not a preference.
1. Documented income is thin against the loan. The portfolio is large, but the return shows little. This is the classic retiree file.
2. Assets cover the whole loan. On the qualifier path, no income is documented at all, which suits a seller of a business or a recipient of an inheritance or settlement.
3. Income is irregular. Distributions that vary year to year can complicate a conventional file. A 60-month divisor smooths them into one figure.
4. The retiree wants to keep the portfolio invested. Assets qualify the loan without being sold. There is no forced liquidation, no capital-gains event, and no retirement withdrawal to fund the purchase.
5. The purchase is large. Qualifier-path loans reach $4,000,000, and depletion-path loans reach $3,500,000, subject to underwriting.
Conventional wins when documented income already clears the test, when the borrower lacks the asset minimums, or when the loan is too small. The depletion path needs 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 assets are the only income source.
Three Retirees, Same State
These are illustrative profiles. Figures are shorthand, not offers, and the lender’s own calculation governs.
The pension household. Picture a retired couple in the Columbus suburbs with a pension, Social Security, and a modest brokerage account. Their documented income carries the payment through debt-to-income. Conventional wins. The asset loan adds nothing.
The portfolio household. Say a retired executive sold a business and holds most of the proceeds in brokerage and savings. Reported income is small. The qualifier path asks whether eligible assets equal the loan. A sanctioned example: an $800,000 loan against $330,000 in brokerage accounts (100%), $300,000 in a 401(k) under 59½ (90%, which counts $270,000), and $200,000 in savings (100%). Usable assets total $800,000, so the file is reviewed on assets alone, subject to underwriting. Asset-based wins.
The close call. Consider a retiree with solid Social Security and a mid-sized portfolio who wants a larger home than documented income supports. The depletion path can supplement the documented income. Compare both files before choosing. This one can go either way.
What About a Rental Property?
A retiree buying a rental should look at DSCR before either option above. DSCR loans qualify primarily on property-level rental income covering the payment, subject to lender guidelines, so personal income is not the qualifier. Lendmire’s complete DSCR loans guide covers the mechanics.
Business-purpose investor loans are reviewed differently from a standard owner-occupied mortgage. Regulation Z’s business-purpose provisions turn on substance. A signed form is not enough, and the factors include how much the borrower manages the property personally and the size of the transaction.
Asset depletion on an investment property still exists, at 65% leverage on a purchase. It makes sense when the rent will not reach the coverage a DSCR program needs, or when the borrower prefers a personal-income file. Programs below 1.00 coverage are available through select lenders in the network, with leverage and terms adjusted. For a primary or second home, DSCR is simply not an option. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
What Does the File Look Like?
“No income documents” never means no documents. On both paths the assets are documented. Expect these requests:
- 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. Funds from a business sale, inheritance, or legal settlement are excused from that seasoning.
- Large-deposit explanations for any recent movement. Lendmire’s piece Bank Statement vs Conventional Mortgage When Deposits Shifted Recently covers how those questions get handled.
- Housing history of 0x30x12. A single 30-day late in the last twelve months is considered case by case.
- Credit. Multiple bankruptcies are not eligible, and a housing event needs 4 years of seasoning on the depletion path.
Statements are the main friction point. Retirees who moved money between institutions in the last two months are the ones whose files stall, so keep balances seasoned before applying.
Market timing matters too. Asset values can fall between application and underwriting, and securities carry an 80% credit on the depletion path. A thinner cushion over the minimum can turn a clean file into a short one. Cash-out proceeds never count as qualifying assets on the depletion path.
Key Terms Defined
Asset qualifier: a path where eligible assets, after credit percentages, must cover the entire loan amount.
Asset depletion: a path that divides usable assets by 60 months to create qualifying income.
Haircut: the share of an account’s balance a lender does not count.
Seasoning: the time funds must sit in an account before they count.
Debt-to-income (DTI): monthly debts divided by monthly income, used to test whether a payment fits.
Frequently Asked Questions
Is an asset depletion loan a last resort?
No. It is a different tool for a different income profile. If documented retirement income carries the payment, conventional is usually the first file to price. The asset loan fits when balances are large and paper income is not.
Do retirement accounts count?
Yes, at different values by path. On the qualifier path, 401(k) and IRA balances count at 90% under 59½ and 100% at 59½ or older. On the depletion path they count at 70% at any age. Terms are subject to underwriting.
Do I have to sell my investments?
No. The assets qualify the loan as a calculation. They stay invested, and nothing is withdrawn. Cash-out proceeds, though, never count as qualifying assets on the depletion path.
Can I use it for a second home or a rental?
A second home works on both paths. An investment property works only on the depletion path, at 65% on a purchase or rate-and-term refinance and 60% on a cash-out. A rental purchase often fits DSCR better.
Does a trust or a spouse change anything?
It can. Joint accounts and trust-held assets are reviewed by the lender for ownership and access, and each file is underwritten individually. Bring the account titling documents with the statements.
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. A general reminder: tax treatment varies; consult a qualified professional before drawing from retirement accounts.
Lendmire’s asset-based mortgage in Ohio page presents the program for Ohio borrowers.
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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References
1. Fannie Mae Selling Guide B3-3, Income Assessment
2. Cornell LII – 12 CFR 1026.43
3. 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 to Qualify for an Asset Depletion Jumbo Loan · Does a Retiree Using Asset Depletion Need a Super Jumbo Loan? · How to Meet Jumbo Loan Asset Depletion Requirements for an Asset-Rich Retiree
Guides: Asset-Based Mortgage in Ohio
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.