Asset Depletion Loans In Los Altos Hills — The Quick Read: These loans let a borrower qualify using liquid assets instead of a paycheck, tax return, or W-2. An underwriter divides eligible savings, brokerage holdings, and retirement funds by a set number of months to produce a monthly qualifying income figure. No employer is required, no traditional personal-income documentation are required, and the borrower never has to actually spend the money down. Across the wholesale network Lendmire works with, this path shows up most often for retirees, recent business sellers, and high-net-worth buyers whose real wealth doesn’t show up on a 1040.
Key Terms Defined
Asset depletion loan — a mortgage where qualifying income comes from dividing liquid assets by a fixed number of months, rather than from employment or self-employment income.
Divisor — the number of months a lender divides eligible assets by to calculate monthly qualifying income; this number is set by each lender’s own guidelines, not by a single industry standard.
Debt-to-income ratio (DTI) — the share of a borrower’s monthly income that goes toward debt payments, including the new mortgage; most programs cap this somewhere between 43% and 50%.
Reserves — liquid funds a borrower must keep available after closing, expressed as a number of months of housing payments, used to prove the borrower can absorb a shortfall.
DSCR loan — a business-purpose loan for rental property qualified primarily on the property’s own rental income covering its payment, rather than on the borrower’s personal income or assets.
What Is an Asset Depletion Loan, Exactly?
An asset depletion loan takes a borrower’s balance sheet, not their pay stub, and turns it into an income number a lender can underwrite. The math is simple: total eligible liquid assets, subtract what’s needed for closing costs and reserves, then divide the remainder by a set number of months. Whatever comes out the other side becomes the borrower’s imputed monthly income for debt-to-income purposes.
Nothing forces a liquidation. The lender documents that the money exists and that the borrower can access it, then runs the arithmetic. A retiree sitting on a few million dollars in brokerage accounts and modest monthly distributions can look weak on a traditional income application and still carry plenty of real capacity to make a payment every month. Asset depletion is built to close exactly that gap.
There’s no single federal rule that defines this product. That’s the regulatory gap non-QM lenders have built asset depletion programs into.
How Underwriting Actually Calculates Your Income
Every file goes through the same six steps, whichever lender is running it.
First, the underwriter adds up eligible assets: bank and brokerage accounts, plus vested retirement funds. Second, retirement and vested accounts get discounted before they count. Early withdrawal comes with tax and penalty consequences, so lenders don’t count them at full value. Third, the underwriter subtracts anything already earmarked elsewhere in the transaction. Closing costs and required reserves come out before the division happens. Fourth comes the divisor — the number of months the remaining balance gets spread across. This one variable decides more of the outcome than almost anything else in the file. A shorter divisor produces a bigger monthly income number; a longer one produces a smaller one.
Fifth is documentation. Most files need two to three months of statements per account, proof the borrower actually owns and controls the funds, and — for any large or recent deposit — a paper trail showing where the money came from. Files move cleaner when the assets have been sitting in the same accounts for a while rather than assembled the week before applying. Sixth, the imputed monthly income gets combined with any other verified income and run through the lender’s standard debt-to-income or reserve test, right alongside credit, leverage, and occupancy.
The Two Structures: Asset Allowance vs. Assets-Only
Not every asset-based file works the same way, and this is where the naming gets confusing across the industry. In Lendmire’s wholesale network, two distinct structures cover most scenarios.
The asset allowance path divides liquid assets by 36, 60, or 84 months, depending on the borrower’s debt-to-income ratio and loan size. Files with debt-to-income at or below 60% typically use the shorter 36-month divisor as a supplemental income source. Above that threshold, or when a borrower needs the number to stand entirely on its own, the calculation stretches to 60 or 84 months — and 84 months is required outright on any loan above $3.5 million. This path applies to primary residences and second homes only, capped at 80% loan-to-value.
The assets-only path skips debt-to-income math altogether. It requires the borrower to hold U.S. liquid assets equal to the loan amount, plus closing costs, plus sixty months of any net loss the borrower carries on other residential property. There’s no income calculation to argue over — the assets simply have to be there.
Retirement accounts count at 70% of their value. That rises to 80% if the borrower is 59.5 or older, since they can access the money more easily without early-withdrawal penalties. Business funds, gifts, trusts other than a revocable living trust, unvested stock, and cryptocurrency never count toward either structure. There are no exceptions.
Where the Rule Breaks: Edge Cases Worth Knowing
The general math holds — until it doesn’t. A few situations change the outcome, and it’s worth knowing them before you apply. The CFPB’s Ability-to-Repay requirement is the framework that makes all this possible. It requires a lender to make a good-faith determination that a borrower can repay the loan. But it leaves the actual underwriting method up to each lender. The CFPB’s Ability-to-Repay/Qualified Mortgage Rule overview makes this clear: the rule sets an obligation, not a formula.
Joint accounts aren’t automatic. A jointly held brokerage or bank account doesn’t disqualify a borrower, but the eligible share isn’t always obvious. Underwriters review these case by case rather than applying a fixed formula, so two borrowers with identical joint balances can end up with different qualifying numbers depending on the rest of the file.
Recent, large deposits get extra scrutiny. Funds that just landed in an account — say, proceeds from a business sale or a home sale — typically need sourcing documentation before they count. Seasoned money moves through underwriting with far less friction than fresh money.
Agency and non-QM divisors are built differently, not just numbered differently. Fannie Mae’s conventional approach ties its divisor to the loan’s amortization term. That’s a conforming, owner-occupied mechanism — it has no bearing on the non-QM asset programs described above, but it’s worth knowing the agency world is moving in the direction of shorter divisors too.
“Asset depletion” and “asset utilization” aren’t interchangeable terms. Some lenders use the first term for a conservative, longer-divisor calculation and reserve the second for a richer program requiring a bigger post-closing cushion. Neither naming convention is universal industry-wide, which is exactly why it pays to work with a broker who can tell you which calculation a specific lender actually means before you commit to one.
The CFPB’s own assessment of the Ability-to-Repay rule explains why this variation exists. Creditors are explicitly allowed to build their own underwriting standards and adjust them as conditions change, according to the CFPB’s ATR/QM Assessment Report. There was never going to be one industry-standard divisor. The rule was written to allow variation, not eliminate it.
How Much Leverage Can Assets Actually Buy?
Loan sizes through Lendmire’s wholesale network run from $300,000 to $30 million, but that range isn’t one program — it’s two, stitched together. A portfolio non-QM program carries files to $6 million. A separate bank portfolio program carries twelve-month bank-statement files to $30 million on its own size ladder: 65% loan-to-value to $5 million, 60% to $10 million, and 55% up to $30 million, with interest-only capped at 60% or the band’s ceiling, whichever is lower. The two overlap between $4 million and $6 million; above $6 million, the bank program stands alone.
On a primary residence, leverage steps down as the loan size climbs. Purchase money runs as high as 90% under $1 million, easing to 85% through $2 million, 80% through $3 million, and 75% at the top credit tier through $4 million. Second homes and investment properties typically run about five points lower at every size band. Above $4 million, every file gets reviewed case by case before it’s even submitted — that’s not a soft caveat, it’s how the file actually moves through the network at that size.
Credit floors move with the size of the loan. The portfolio program works with scores down to 660; the bank program wants 680. Cross above $3.5 million on a primary residence, or $3 million on a second home or investment property, and the floor jumps to 700, alongside tighter housing-history and seasoning requirements. Reserves scale too — typically three months of payments up to $500,000 in loan size, six months up to $1.5 million, and nine months above that, plus two additional months for each other financed property a borrower carries, capped at twelve months total.
Cash-out works cleanly at or below 60% loan-to-value. The bank program has no published cap on proceeds. Above that 60% mark, though, the portfolio program limits cash-in-hand to $1.5 million. For rental collateral specifically, cash-out tops out around 75% for standard long-term rentals and roughly 70% for short-term-rental collateral, subject to lender guidelines and property type.
Files like this move fastest when the borrower’s documentation is clean from the start. That means statements that have sat untouched for months — not ones assembled the week before applying — and clear sourcing on anything recent. I see this pattern across the network on nearly every asset-based file, no matter the loan size: the strongest submissions are boring submissions.
Asset Depletion vs. DSCR: Different Tools for Different Balance Sheets
These two products solve different problems. People mix them up constantly. An asset depletion loan looks at the borrower’s personal balance sheet. A DSCR loan works differently — it’s reviewed mainly on whether the property’s rental income covers its payment, subject to lender guidelines. The borrower’s personal income and assets barely matter here. DSCR loans are built for non-owner-occupied investment properties. Because they’re business-purpose investor loans, lenders review them differently than a standard owner-occupied mortgage.
Investors sometimes combine the two rather than choosing between them — using liquid assets to satisfy a rental purchase’s reserve requirement, while the DSCR calculation itself carries the qualification. If you’re comparing the two head-to-head for a rental purchase, Lendmire’s DSCR loan vs. asset depletion loan breakdown walks through when each one actually fits. For the full mechanics of how rental-income review framework works on the DSCR side, Lendmire’s complete DSCR loans guide covers it in depth. Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
For deeper background on the mechanics discussed here, see CFPB — ATR/QM Assessment Report (PDF).
Frequently Asked Questions
Does an asset depletion loan force me to sell my investments?
No. The calculation is a qualifying formula, not a withdrawal schedule. The lender documents that the balance exists and that you have access to it, then converts that balance to a monthly income figure — your accounts stay exactly where they are.
Can I use retirement accounts to qualify?
Yes, at a discount. Vested retirement funds typically count at 70% of value, rising to 80% once you’re 59.5 or older, reflecting easier access without early-withdrawal penalties.
Do all lenders use the same divisor?
No, and this is the single biggest source of confusion in the category. Divisor length, eligible asset types, and what gets subtracted before the math runs all vary by lender — there’s no industry-standard number, which is exactly why the same balance sheet can qualify for different loan amounts depending on which guideline set reviews it.
Is this the same as a “no-doc” loan?
No. Employment and tax-return documentation get waived, but the file is still fully underwritten against written guidelines, with account statements, ownership verification, and sourcing documentation on anything recently deposited.
Can business funds or unvested stock count as qualifying assets?
No. Business funds, gifts, trusts other than a revocable living trust, unvested stock, and cryptocurrency never count toward either the asset allowance or assets-only structures, regardless of balance.
Are you trying to decide between an asset-based loan and a rental-income loan for your next purchase or refinance? Lendmire can help you compare options. We look at the property, your liquid assets, your credit profile, and your leverage goals. We review every scenario individually against current lender guidelines. Nothing here is a commitment to lend.
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
As a non-QM mortgage broker (NMLS# 2371349), Lendmire facilitates DSCR investor loans across 40 markets, including Washington, D.C. DSCR eligibility is generally reviewed around property-level rental income instead of personal income documentation, subject to lender guidelines, serving LLC-structured portfolios and self-employed borrowers who don’t fit conventional boxes. A two-time Scotsman Guide Top Mortgage Workplace (2025, 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. CFPB — Ability-to-Repay/Qualified Mortgage Rule overview
2. CFPB — ATR/QM Assessment Report (PDF)
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.
