Does an Asset Depletion Loan Require Any Income?

The Quick Read: No, an asset depletion loan does not require employment income, pay stubs, or W-2s, because the lender reviews your file on documented assets instead, converting eligible balances into a monthly income figure, testing that figure against your debts and the new payment, and still reviewing credit, reserves, and the property. You still need a verified source of repayment. Here, that source is your balance sheet.

• Employment income, pay stubs, and W-2s are not required when assets carry the file.
• Account statements prove the assets, and the lender discounts some account types.
• The monthly figure built from your assets still gets tested against your debts.
• Social Security, a pension, or rental income can be added on top, subject to the program.
• On a primary residence, select lenders in Lendmire’s wholesale network go up to 80% of the home’s value on asset-based qualification, subject to lender guidelines.

Key Terms Defined

Nobody enjoys a glossary, but this loan is full of borrowed vocabulary. Here are the words used below.

Asset depletion loan: a mortgage where the lender turns your liquid assets into a qualifying monthly income figure instead of reading pay stubs or traditional personal-income documentation.

Imputed income: the monthly figure the lender calculates from your assets. It is a qualifying convention, not money you actually receive.

Haircut: a discount the lender applies to an asset based on its type. A retirement account, for example, counts for less than cash.

Debt-to-income ratio (DTI): your monthly debts, including the new housing payment, divided by your monthly income. Lower is better.

Non-QM: a loan underwritten outside the standard Qualified Mortgage box. Asset-based income calculations live in this space.

Reserves: liquid funds left over after closing. They show you can keep paying if something goes wrong.

LTV (loan-to-value): the loan amount as a percentage of the property’s value.

DSCR: debt service coverage ratio. It measures whether a rental property’s income covers its own monthly obligation.

Required, Allowed, or Helpful?

The question “any income?” actually hides three questions: what is required, what is allowed, and what helps. Employment income is not required. Other income is allowed. Strong assets and clean credit help most.

Asset-derived income can stand alone, or it can sit on top of income you already document. A retiree with a pension and a large brokerage account might use both. Someone with no earnings at all might use the accounts only. Either way, the lender qualifies the file on documented income under the applicable program, subject to lender guidelines.

How Do Assets Turn Into Qualifying Income?

The lender totals your eligible assets, subtracts the cash you need to close and keep in reserve, then divides what remains by a set number of months. The result is your imputed income. The steps run in a predictable order.

1. Pick the eligible assets. Checking, savings, money market, brokerage, and retirement accounts are the usual candidates. Many programs exclude borrowed funds, restricted stock, business accounts, and collectibles.

2. Verify with statements. The lender wants account records, not a paycheck history.

3. Apply haircuts. Retirement balances commonly count at a discount, and the treatment can change once the borrower reaches retirement age.

4. Subtract cash to close and reserves. Money you need for the purchase cannot also count as income.

5. Divide by the program’s month count. The divisor varies by program. A longer divisor shrinks the income figure, so the same assets can look very different from one lender to the next.

6. Run the debt test. The imputed income goes into a DTI calculation against the new payment and your existing debts.

Across the programs a broker sees, this divisor is the single biggest swing factor. It is also why the same file can look strong at one lender and thin at another. Comparing several programs before choosing one is the whole point of working through a broker.

Does the Calculated Income Still Get Tested Against Your Debts?

Yes. Imputed income is treated as income for the debt test, which means your liabilities still matter. People often miss this point, because “no income required” sounds like “no ratios required.”

Picture two borrowers with identical net eligible assets. One owns a home outright and carries almost no other debt. The other has an auto loan, a student loan, and a second mortgage. The first borrower’s DTI looks comfortable. The second borrower’s looks stretched, even though the asset total matches.

This is also the point where large account balances can disappoint. Haircuts, reserve deductions, and long divisors leave the imputed income small next to the headline net worth. A seven-figure portfolio does not produce a seven-figure qualifying income. Plan on the calculator, not on the balance.

What the Lender Asks For Instead of Income

Skipping pay stubs does not mean skipping paperwork. Here is what replaces the income documents.

• Recent statements for every account you want counted. Statement periods follow the individual program.
• Sourcing for any large or recent deposit, since borrowed or newly moved funds may not count.
• Reserves, commonly around six months of the housing payment across the network.
• A credit review. Stronger scores earn better leverage, and weaker ones narrow the options.
• An appraisal and the usual title and insurance review.

Loan sizes on select programs run from $125,000 up to $3,500,000, though each lender sets its own limits and each file is underwritten individually.

Scenarios: Who Does This Fit?

Four borrower types come up often. Each lands in a different place.

The retiree with Social Security and a portfolio. Assets carry most of the file, and Social Security can be added if the program allows it. This is the cleanest fit. A job gap is irrelevant here, because the lender is not relying on employment.

The self-employed owner with low taxable income. Write-offs can make traditional personal-income documentation look weak even when the business is healthy. If deposits are strong, 12 months of business or personal bank statements may work better. Qualifying income comes from deposit averages with lender-specific expense factors, and primary-residence purchases or no-cash-out refinances can reach up to 90% LTV through select lenders, with the strongest files earning the top of that range. Assets matter more when the deposits are uneven. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.

The professional between jobs. If the accounts are large, asset-based qualification can sidestep a recent employment gap. A new offer letter is often unnecessary, since the file does not rely on employment. Lendmire’s piece RSU Income vs Asset Depletion for a Borrower Who Lives on Assets covers a related case.

The borrower with a small paycheck. A modest salary can be combined with asset income to lift the total. This blended approach often works better than either source alone.

Does the Federal Rule Require Income?

The rule requires a reasonable, good-faith check that you can repay, and it names income or assets as acceptable bases. The text of 12 CFR 1026.43 says “or,” not “and.” The lender must verify with third-party records whatever it relies on. For an assets-only file, that means account statements.

The official commentary on the same rule adds that employment status matters only if the lender relies on employment income. An assets-only file has no job to verify. That is why this is not a loophole. It is a recognized way to show repayment ability.

Occupancy decides which disclosure rules apply. An owner-occupied file, meaning a primary residence or second home, is a consumer mortgage and carries the standard consumer disclosure process. A non-owner-occupied rental is a business-purpose loan and is exempt from that process.

Investors: Asset Depletion or DSCR?

The tool depends on the property. Asset depletion tests your balance sheet, while a DSCR loan tests the rental. Investment properties are where the choice matters most.

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, and your personal income stays out of the picture. Lendmire’s complete DSCR loans guide walks through that structure.

The tradeoff shows up as you scale. Under asset depletion, every new loan adds to your DTI, and your debt load climbs with each purchase. Under DSCR, each property stands on its own rent. Select lenders in the network also review properties below 1.00 coverage, though leverage and terms adjust when the rent does not cover the payment.

Asset depletion fits best in three cases. One is a primary residence purchase. Another is a property with no rental income. The third is an investor whose assets are large but whose documented income is low or irregular. The 80% LTV ceiling above applies to a primary residence, and it should not be read as an investment-property figure. On investment properties, cash-out tops out around 75% LTV. Investment purchase leverage on bank-statement documentation varies by lender.

Common Misconceptions

“No income means no underwriting.” That’s not the case. The lender verifies what it relies on, computes a DTI, and reviews credit, equity, reserves, and the appraisal.

“I have to cash in my assets.” The calculation is a qualifying convention, not a withdrawal plan. You keep the accounts. Tax treatment varies; consult a qualified professional.

“Net worth equals qualifying income.” Discounts, reserves, and long divisors cut it down sharply.

“Asset depletion and DSCR are the same loan.” They test different things. One tests you, the other tests the property.

“Every asset counts at full value.” Retirement accounts are discounted, and some assets are ineligible.

“It is a conventional product.” It is non-QM, so terms follow each lender’s program sheet.

There is also a risk side. Balances can drop between application and closing, and a lower balance means lower imputed income. Treat the qualifying math as a floor to stress-test, not a promise.

If You Are Weighing Asset-Based Qualification

If you are asset-rich with uneven or low documented income and want to see how the numbers work, Lendmire can help you compare options based on your assets, the property, credit profile, leverage, and your goals. Lendmire is a mortgage broker that arranges these loans through select wholesale lenders. Its consumer mortgage licensing covers 16 states, and qualification is subject to lender guidelines. This is not a commitment to lend.

About Lendmire

Lendmire (NMLS# 2371349) is a DSCR-focused mortgage broker that helps arrange investor financing across 41 markets, including Washington, D.C., through wholesale and investor-lending channels. DSCR eligibility is generally reviewed by the lender around the property’s rental income rather than personal income documentation, subject to lender guidelines — which works for self-employed investors, LLC operators, and portfolios above four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.

References

1. eCFR, 12 CFR 1026.43

2. CFPB, Regulation Z 1026.43 with commentary