Asset Depletion Loans In Kailua-kona — The Quick Read: These loans let a borrower qualify using liquid assets instead of a paycheck. A lender divides eligible savings, brokerage, and retirement balances by a set number of months and treats the result as monthly income. Rental income is reviewed instead of personal-income documentation, no employment history required. The catch is that the divisor a lender picks changes the outcome more than almost anything else in the file.
Maybe you’re sitting on a large portfolio, but your traditional personal-income documentation understates what you actually earn. Maybe you’re a retiree, a business owner who sold a company, a founder with restricted stock, or an entertainer between contracts. If so, this is the tool built for you. It doesn’t replace income documentation with nothing. It replaces it with a different kind of proof: the money is already there.
Key Terms Defined
Asset depletion (also called asset utilization or asset dissipation): an underwriting method that turns a borrower’s liquid savings and investments into a monthly qualifying income figure, instead of using pay stubs or traditional personal-income documentation.
Divisor: the number of months a lender spreads an asset balance across to calculate monthly income. A shorter divisor produces a bigger monthly income figure from the same pile of money.
Haircut: a discount applied to certain asset types before they count toward the calculation — stocks and retirement funds typically get discounted; cash usually doesn’t.
Debt-to-income ratio (DTI): the share of a borrower’s monthly income that goes toward debt payments. Asset depletion income feeds directly into this ratio just like a paycheck would.
Reserves: money left over after closing, held separately from the funds used in the depletion calculation, proving the borrower can absorb a few months of payments even if something goes sideways.
How the Math Actually Works, Step by Step
The formula sounds simple: eligible assets divided by a fixed number of months equals monthly qualifying income. It is simple — but the inputs vary enormously depending on which program a lender is running, and the outcome for the same borrower can look wildly different from one file to the next.
Step one — the inventory. The borrower submits statements for every account they want to use: checking, savings, brokerage, retirement. Lines of credit don’t count — they’re borrowed money, not assets. Cryptocurrency, collectibles, and private company shares are typically excluded outright, because they’re either too volatile or too hard to verify.
Step two — the haircuts. Cash and depository accounts generally count at full face value. Brokerage assets — stocks, bonds, mutual funds — get discounted for market volatility. Retirement accounts get an additional discount tied to age, since pulling money out early can trigger taxes and penalties. Across the wholesale network Lendmire places files with, retirement accounts commonly count at 70% of value, stepping up to 80% once the borrower clears age 59½ — a meaningful swing for anyone close to that line.
Step three — the divisor. This is where programs diverge hardest. Some non-QM lenders divide by 120 months. Others use shorter windows — 36 months, 60 months, or 84 months — which produces a much larger monthly income figure from the identical pile of assets. Across the programs Lendmire’s network works with, a common structure runs a 36-month divisor when the borrower’s debt-to-income ratio is 60% or lower without counting assets at all, a 60-month divisor when DTI runs above that, and an 84-month divisor for files where asset depletion is the sole, stand-alone qualifying method — or for any loan size above $3,500,000. Shop two lenders with two different divisors and you’ll get two very different verdicts on the same balance sheet.
Step four — it feeds standard underwriting. The resulting monthly figure isn’t a separate track. It goes straight into the debt-to-income calculation, right alongside any documented income the borrower already has, like Social Security or a pension.
Step five — reserves stay separate. Whatever assets get counted toward income can’t also be the reserve cushion. Underwriters want to see money left over after closing, with the required reserve amount typically stepping up as loan size grows, plus additional months for each other financed property the borrower already owns.
Step six — no reliance on liquidation. Underwriters confirm the borrower isn’t planning to sell the asset to make the payment. The federal ability-to-repay standard requires lenders to weigh a borrower’s current income or assets and verify that information through reasonably reliable records — the documentation looks different in an asset-based file, but the verification obligation doesn’t go away.
The Structures and Variations That Actually Exist
Not every asset-based path looks the same, and the differences matter more than the marketing language suggests.
Asset allowance (supplemental income). This is the classic version — assets divided by a divisor, added on top of any documented income the borrower already has. Across Lendmire’s wholesale network, this structure is generally reserved for primary residences and second homes, capped around 80% loan-to-value, with the divisor set by DTI: 36 months when the borrower’s ratio clears 60% without assets, 60 months when it doesn’t.
Assets-only (no DTI developed at all). A different animal entirely. Instead of converting assets into a monthly figure, the lender checks whether the borrower’s liquid, U.S.-held assets equal the loan amount plus closing costs plus 60 months of any net loss carried on other residential property. If the liquidity is there, no debt-to-income ratio gets calculated at all. This path tends to suit someone sitting on a very large, very liquid balance sheet who doesn’t want a monthly-income conversion clouding the picture.
Business bank-statement income (a related but distinct method). For self-employed borrowers who’d rather qualify on cash flow than a frozen asset pile, 12 or 24 months of bank deposits — personal or business — can be averaged into qualifying income after an expense ratio is applied. Transfers from the borrower’s own business into a personal account count in full. This isn’t asset depletion, but it lives in the same non-QM neighborhood and often gets shopped alongside it for the same type of borrower.
Retirement-account nuance. A 45-year-old and a 65-year-old with the identical 401(k) balance won’t generate the same coverage figure. Age changes the haircut, because early withdrawal carries a tax and penalty cost the underwriter has to price in.
None of these paths count business funds, gifts, trusts other than a revocable living trust, unvested stock, or cryptocurrency. Those categories are excluded across the network, no matter which structure a borrower uses. That’s because the money either isn’t liquid, isn’t verifiable, or isn’t reliably the borrower’s own to draw on.
Where the General Rule Breaks
It’s usually a primary-and-second-home tool, not an investment-property tool. This is the edge case that trips up the most investors. Across the wholesale programs Lendmire places, the asset allowance path tops out at 80% and applies to owner-occupied and second-home purchases — not rental property. If the goal is buying or refinancing an investment property, the more natural qualifying method is DSCR underwriting, where the property’s own rent — not the buyer’s balance sheet — covers the payment. Investors sometimes assume any “no income doc” tool works interchangeably across every property type. It doesn’t, and confirming which product actually applies to the purchase in question saves a wasted application.
Above $3,500,000, the divisor tightens automatically. Regardless of DTI, loans over that size on this structure run through the 84-month divisor as a stand-alone method — a materially more conservative number than the 36- or 60-month options available on smaller files.
Loan sizing itself has its own ceiling logic. The wholesale network Lendmire works with carries a portfolio non-QM program to $6,000,000 and a separate bank portfolio program that handles 12-month-statement files all the way to $30,000,000 on its own leverage ladder — 65% loan-to-value to $5,000,000, stepping to 60% at $10,000,000, and 55% at $30,000,000, with interest-only capped at 60% or the size band’s ceiling, whichever is lower. Every file above $4,000,000 goes through case-by-case review before it’s even submitted — there’s no flat “up to” figure at that size on either program.
Leverage steps down with size, and by property type. On a primary residence through select wholesale programs, purchase leverage runs as high as 90% on loans up to $1,000,000, tapering through 85% and 80% bands as the loan climbs past $2,000,000, and down to roughly 75% at the top credit tier near $3,500,000-$4,000,000 before case-by-case review takes over above that. Second homes and investment properties run roughly five points lower at every comparable size — a distinction that matters when comparing a primary-residence quote to an investment scenario, since they are never the same number.
Credit floors move too. The general floor across the network sits at 660, but above the super-jumbo threshold — generally north of $3,500,000 on a primary residence — that floor rises to 700, alongside tighter housing-history and seasoning requirements on any past credit event.
Weighing DSCR Against Asset Depletion for the Same Investor
Here’s where the two paths genuinely diverge — and it’s worth thinking through before you shop either one. Asset depletion answers one question: can this specific borrower personally support the debt from their own savings? DSCR financing answers a completely different question: does the property itself generate enough rent to cover its own payment? That’s expressed as a coverage ratio, not a personal income figure. If you mix the two up when comparing quotes, you end up shopping apples against oranges. Final eligibility is subject to lender guidelines, credit approval, reserves, and property review.
Say you own rental property but want to buy a personal residence without using a paycheck. Asset depletion is a natural fit for that home purchase. It frees up your rental portfolio’s cash flow, so that can qualify separately through DSCR underwriting. If you’re buying a rental property outright, you’ll generally move straight to DSCR instead. There, the property’s income — not your balance sheet — clears the file. DSCR loans are built for non-owner-occupied investment properties. Because they’re business-purpose loans, lenders review them differently than a standard owner-occupied mortgage.
Here’s a pattern that shows up a lot in files like this. Some borrowers have strong assets but thin documented income. They assume their asset-depletion number alone sets their purchase power. But that’s not the whole picture. On top of that number sits a reserve requirement — often 3 to 9 months of payments, held completely separate from the qualifying assets. This reserve is what actually caps how much of the portfolio you can use. Figure out which dollars do which job before you shop lenders. That way, you avoid a late surprise in underwriting.
Cash-out refinance scenarios on either path also carry structure worth knowing upfront: on the bank-statement side of the network, cash-out proceeds run without a published cap below 60% loan-to-value, while the portfolio program caps cash-in-hand at $1,500,000 above that threshold. None of this touches asset-depletion income directly, but it’s part of the same broader non-QM toolkit an asset-rich borrower typically shops alongside it.
A Practical Decision Checklist
Before comparing offers, an investor working through this decision should nail down:
- Which property type is this for — primary home, second home, or rental? That single answer determines whether asset depletion even applies, or whether DSCR is the right door.
- What divisor is the lender actually using? A 36-month divisor and an 84-month divisor on the identical asset pile can be the difference between qualifying and not.
- How old are the retirement accounts’ owners? The 59½ line changes the haircut meaningfully.
- Are reserves coming from a separate pool of money, or from the same assets doing double duty in the calculation? They can’t overlap.
- Is the loan size crossing $3,500,000 or $4,000,000? Both trigger tighter review and different math.
For deeper background on the mechanics discussed here, see Fannie Mae Single Family Comparable Rent Schedule (Form 1007).
Frequently Asked Questions
Do I have to sell my investments to qualify this way?
No. Most programs only use the account balance as proof of capacity — the underwriter isn’t asking the borrower to liquidate anything before or after closing. The portfolio can stay fully invested through the entire loan term.
Can I use asset depletion to buy a rental property?
Generally no, not through the asset-allowance structure most lenders in the network use — that path is typically reserved for primary and second homes. Rental purchases usually move through DSCR underwriting instead, where the property’s rent covers the payment.
Why do different lenders give me different qualifying numbers from the same accounts?
The divisor. One lender dividing your assets by 36 months and another dividing by 84 months will produce very different monthly income figures from the identical balance — always confirm the divisor in writing before comparing offers.
Does my 401(k) count the same as my brokerage account?
No. Retirement accounts typically get discounted more heavily than a standard brokerage account, and the discount usually improves once the borrower passes age 59½, reflecting reduced tax and penalty exposure.
What if I have both a pension and a large investment portfolio?
Documented income and asset-based income can generally be combined in the same file, with the asset figure supplementing rather than replacing what’s already verifiable. The combined total then runs through standard debt-to-income underwriting.
Are you weighing whether your balance sheet or your property’s rent is the stronger qualifying path? Lendmire can help. We compare asset-based and DSCR options side by side, based on the property, the portfolio, and the numbers as they actually stand.
For current guidelines and terms, see Lendmire’s super jumbo bank statement loan programs page.
Self-employed borrowers can compare both super jumbo programs on Lendmire’s self-employed mortgages page.
About Lendmire
Lendmire — NMLS# 2371349 — is a DSCR and non-QM mortgage brokerage with investor loan programs in 40 markets, including Washington, D.C. DSCR eligibility is commonly reviewed by the lender around property-level rent rather than personal income documentation, subject to lender guidelines, and the brokerage helps arrange financing for LLC-owned portfolios beyond conventional financed-property limits. Recognized by Scotsman Guide as a Top Mortgage Workplace in 2025 and 2026.
Lendmire’s Top Mortgage Workplace recognition is documented by Scotsman Guide 2025 Top Mortgage Workplace and Scotsman Guide 2026 Top Mortgage Workplace.
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References
1. Fannie Mae Selling Guide B3-3.4-06 — Employment-Related Assets as Qualifying Income
2. Fannie Mae Single Family Comparable Rent Schedule (Form 1007)
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.
